Dutchie Archives - Green Market Report

StaffDecember 1, 2022
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The Daily Hit is a recap of cannabis business news for Dec. 1, 2022.

ON THE SITE

Colorado Cannabis Industry Enduring ‘Largest Downturn’ in its History

One of the most mature cannabis markets in the United States, Colorado, is going through a financial crisis. The statewide industry is suffering a major sales dip that has been trending downward for the better part of a year, and insiders expect business casualties in coming months. Read more here.

Dutchie Co-Founders Step Down, Board Names New Leadership Team

Cannabis tech company Dutchie underwent a major leadership shakeup this week. The co-founding duo of Ross and Zach Lipson stepped down from their leadership posts at the privately held Oregon business, and the board of directors has named a new chief executive officer, chief financial officer, general counsel, and a vice president of engineering. Read more here.

Radient Technologies Deep in Debt, Trying to Swim Upward

Alberta-based cannabis extract maker Radient Technologies Inc. (TSXV: RTI) posted second-quarter results showing it either needs more cash flow or financing to keep the ship sailing. The company said it has overdue liabilities concerning rent, wages, long-term debt, and leases. Read more here.

Can Publicly Traded Bonds Keep the Cannabis Industry from Getting Smoked?

In 2021, cannabis companies racked up $1.65 billion in debt; in 2022, it skyrocketed to more than $5.62 billion of issued debt financing. Alarms are now going off because these loans are maturing, and payments are coming due. Since bankruptcy is not an option, what is the solution? Read more here.

Nevada Doles Out Consumption Lounge Licenses

Nevada picked 20 independent lounge licenses for businesses looking to build out new facilities for consumption lounges and sell product from other operators, with half of those licenses designated for social equity applicants. Read more here.

IN OTHER NEWS

New York

New York’s equity-focused rollout of its legal marijuana market relies heavily on a $200 million fund to support the state’s first retailers. Yet the team picked to raise and manage that money – an NBA Hall of Famer and a shoewear entrepreneur – have repeatedly failed to deliver on their biggest and boldest claims, including investing in entrepreneurs of color with a $100 million fund. Read the NY Cannabis Insider investigation here.

Minnesota

The Minnesota Department of Health will add irritable bowel syndrome and obsessive-compulsive disorder to the list of qualifying medical conditions for participation in Minnesota’s medical cannabis program. Under state law, the new qualifying conditions will take effect Aug. 1, 2023. Read more here.

Jacksons BevCo

CordovaCann Corp., a cannabis-focused consumer products and retail company, has forged a deal with Midwest retailer Jackson BevCo Inc. to facilitate the opening and operation of cannabis retail stores within or beside Jacksons convenience stores starting in 2023. Read more here.


Debra BorchardtJuly 20, 2022
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Cannabis platform tech company Dutchie is jumping into the world of fintech with the launch of Dutchie Pay, a fully-integrated digital payment solution. Cannabis companies have faced huge challenges on the payment side of the business since the major banks and credit card companies refuse to work with cannabis. The product remains federally illegal and that is enough for these financial institutions to just say no.

While many see this as a huge challenge, that issue has created a chance for innovation and payment creativity. Dutchie Pay is designed to reduce reliance on cash by providing dispensaries and consumers with a convenient and secure way to pay. It is a closed-loop automatic clearing house (ACH) solution, in which Dutchie Pay allows consumers to purchase their cannabis products online while automating compliance for dispensaries.

“Cash creates too many safety risks and is inefficient. Our industry cannot meet its full potential without modern payment solutions available at scale,” said Dutchie Chief Product Officer and Co-Founder Zach Lipson. “Dutchie exists to create safe and easy access to cannabis. Dutchie Pay advances our mission by integrating a simple and secure product that makes cannabis purchases safer, easier, and more accessible for dispensaries and consumers alike.”

Dutchie said it launched the payment platform with alpha and beta testing in the first half of 2022. The company said that on average, order values have already increased by 30%. It decreased abandoned cart rates by an average of 32%. It also reduced customers’ cash management costs by at least 15%. Dutchie Pay also drives repeat purchases, with 82% of consumers making at least a second purchase since signing up.

Dispensaries have been bedeviled with figuring out how to accommodate customers who expect to have a normal e-commerce transaction experience while maintaining compliance with the companies who do not want to be associated with cannabis. Currently, roughly 90% of all dispensary transactions are handled in cash, creating inefficiencies in operations and added safety risks. Dutchie Pay is a one-click digital payment option for cannabis products online and for delivery via a direct ACH bank transfer. Dutchie Pay allows consumers to quickly connect their bank account and pay directly at checkout.

Behind the counter, Dutchie Pay fully integrates with Dutchie’s e-commerce and point of sale (POS) solutions, providing businesses with a single-vendor advantage to help streamline operations. Dispensaries no longer need to rely on multiple software providers and with this level of integration, retailers can significantly reduce human error, maximize sales, serve more customers, and generate more revenue.

“Our customers increasingly want to buy cannabis products without using cash and without paying ATM or other fees. Dutchie Pay has improved their overall shopping experience while resulting in higher basket sizes and customer loyalty,” said Joshua Kahn, Owner at Takoma Wellness Center. “With Dutchie Pay, I have a one-stop, one-click solution that is fully integrated with e-commerce and point of sale that provides a seamless shopping experience for my customers, a safer work environment for my team, and accelerated growth for my business.”

 

 


StaffOctober 15, 2021
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Privately-owned cannabis tech firm Dutchie  has raised $350m in Series D financing which is now placing a $3.75 billion valuation on the Oregon-based company. The company said it plans to use the money to keep expanding operations and invest in R&D investments to launch major products to support cannabis dispensaries. That includes hiring more top talent for the firm.

Dutchie is a behind-the-scenes company that charges dispensaries a monthly fee to create and run their websites and manage orders. With the pandemic, many dispensaries were pushed to create online ordering for pickup in-store. Plus, many customers don’t like waiting in lines and the convenience of online ordering and express pickup desks in dispensaries has added to the product’s popularity. The company said in a statement,

We have had a pivotal 2021 and will continue to expand our product suite and innovate solutions for cannabis retailers. As we strive to create safe and easy access to cannabis, we hope to open more hearts and minds to the good it can do.

Founded in 2017, Dutchie now has over 500 employees across 40 different U.S. states and in Canada. In the last fundraising round CEO Ross Lipson said,

“Dutchie’s mission is to provide safe and easy access to cannabis while helping power the positive societal change that cannabis is bringing to the world. We believe we have a responsibility to help contribute to the next evolution of the industry, help all sides of the market grow, and create opportunities and outcomes that benefit all of our partners and consumers.”

Dutchie’s Series D comes seven months after its last funding round — a $200 million Series C — one of the largest private funding rounds in the cannabis industry. The round was led by D1 Capital Partners, with participation from previous investors including Tiger Global, Dragoneer, DFJ Growth, Thrive Capital, Gron Ventures, and Casa Verde Capital, and new investors, including Willoughby Capital, Glynn Capital, and Park West Asset Management.

 

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Debra BorchardtMarch 16, 2021
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One of the fastest-growing cannabis tech platforms Dutchie said it completed its $200 million Series C, at a $1.7 billion valuation. The company’s latest funding round is led by Tiger Global, with participation from new investors Dragoneer and DFJ Growth, and from existing investors including Casa Verde CapitalThrive CapitalGron Ventures, and former Starbucks Chairman and CEO Howard Schultz. Dutchie also said it is buying Greenbits and LeafLogix, two enterprise resource planning (ERP) and point-of-sale (POS) software solutions serving the cannabis industry, to provide more value to dispensaries and consumers.

“Since dutchie was founded in July 2017, we’ve always been hyper-focused on our retailers. We’ve taken pride in being there when they need us and building a product that’s designed to solve the unique challenges they face in this industry. As technology in the space has evolved, the relationship between point of sale and e-commerce has taken center stage, and continuously investing in these partnerships has long been a top priority for dutchie,” read the company statement.

The company also announced that Tim Barash, former CFO and Chief Business Officer at Toast, will serve as the company’s new Executive Chairman. Barash said, “Dutchie is powering a new generation of entrepreneurs driving one of the most disruptive consumer trends of the last century. This is a once-in-a-lifetime opportunity to join a team focused on accelerating an industry that has a wide range of positive societal impacts, from better health and wellness outcomes to reversing a stigma that hampers criminal justice reform to supporting communities by enhancing state and local tax revenues.”

Dutchie went on to say, “LeafLogix and Greenbits have always been great partners. As we grew closer we found that these companies, in particular, shared our passion for customer success and our beliefs around the benefits cannabis can have on society. Over time it became clear that officially bringing our teams and technology together would create unparalleled opportunities to build solutions for our retailers. Thus, the decision was made for dutchie to acquire both companies. With point of sale and e-commerce systems playing a central role in the tech stack, we believe it’s important to enable retailers to choose the technology that best suits their operation. As such, we look forward to continuing our contributions to a healthy partner ecosystem in cannabis. For dutchie, LeafLogix, and Greenbits, investing in our API’s and integrations will remain a top priority, staying true to our commitment to provide a platform that puts retailers first.”

John Curtius, Partner at Tiger Global said, “We work with companies that have the potential to reshape major parts of the global economy. Our investment will help dutchie extend its platform and deepen relationships with merchants, consumers, and brands to drive better outcomes for all in this ecosystem. We look forward to supporting this world-class team as they hit a new phase of growth.”

Dutchie said the Series C funds will go toward continuing to add and attract top talent, assist with expansion into new markets, and launch major product developments to support cannabis dispensaries while meeting evolving consumer demand and expectations.


StaffNovember 17, 2020
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Cannabis e-commerce company Dutchie,  has launched  “Dutchie Plus,” a fully customizable online shopping experience. Dutchie Plus will allow dispensaries to create seamless online shopping experiences through open APIs and powerful back-end tools, including access to deep analytical data to drive sales and a messaging platform to connect directly with customers. Dutchie’s latest solution extends its innovative product suite to meet the needs of large dispensaries and multi-state operators (MSOs).

“The cannabis industry is one of the fastest-growing in the world, yet even the largest businesses are still fighting with one hand behind their back with outdated technology tools,” said Zach Lipson, CPO, and Co-founder at Dutchie. “For the first time ever, dispensaries will now have full control over their online presence down to every line of code and design choice without limitations to give consumers a completely unique, seamless experience. By giving businesses this unprecedented level of customization, Dutchie Plus brings our vision to redefine the modern cannabis consumer experience to life.”

Dutchie processes 10% of all legal cannabis sales worldwide, and powers 25 percent of all legal dispensaries across 30 markets and 301 cities in the United States and Canada. Dutchie recently announced its $35M Series B funding round from investors including Snoop Dogg’s Casa Verde Capital, Kevin Durant’s Thirty Five Ventures, Thrive Capital, Gron Ventures, and Former Starbucks Chairman and CEO, Howard Schultz, bringing its total funding to $53M to date. The investment will continue to drive team growth, assist with expansion into new markets, and launch major product developments to support cannabis dispensaries while meeting consumer demand and expectations across North America. Dutchie was also recently named one of LinkedIn’sTop 50 Startups 2020,” reflecting its market leadership and exponential trajectory in just three years since its founding. To learn more, visit: https://dutchie.com/home.

According to IBM’s U.S. Retail Index, the COVID-19 pandemic has accelerated the shift away from physical stores to digital shopping by roughly five years. The cannabis industry is one of the fastest-growing in the world with the global cannabis market expected to reach $73.6 billion by 2027. Yet even the largest dispensaries and MSOs are currently unable to create fully customized online shopping experiences with the current tools on the market. Dutchie’s latest enterprise-level offering is a breakthrough for the industry, giving dispensaries the tools and expertise afforded to other mainstream industries to ensure their brand is represented on their terms, effectively navigate changes in the market, increase their bottom line, and retain more customers.

“Cookies has a discerning fan base that collectively demands and deserves world-class experiences, paired, of course, with the dankest bud on Earth. Dutchie Plus enables us to bring our polish and magic to digital, where innovation is sorely needed in the cannabis space,” said Sam Gammon, Director of Technology at Cookies, a preeminent international cannabis lifestyle brand. “We’re beyond excited to realize a truly seamless digital expression of cannabis commerce, and these new tools will allow us to channel our creativity without limitation. Technology and cannabis can be powerful equalizing forces, and Dutchie Plus is a big step toward something truly fresh and new that works great for operators while meeting customers where they are: the free and open internet.”

 

 


Debra BorchardtAugust 19, 2020
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It’s one of the least known cannabis companies for people outside the industry, but e-commerce company Dutchie is quickly making a name for itself. The company just completed a $35 million Series B funding round, bringing its total funding to $53 million to date.

Since it is still private company, it has managed to fly below the radar but insiders were already jumping on board. Dutchie’s investors include: Snoop Dogg’s Casa Verde Capital, Kevin Durant’s Thirty Five VenturesThrive Capital, Gron Ventures, and Howard Schultz, Founder and Chairman Emeritus of Starbucks Coffee Company. “In one of the fastest-growing industries in the world, Dutchie is defining how the modern cannabis consumer experience should look and feel for dispensaries and customers alike,” said Ross Lipson, CEO and Co-founder at Dutchie. “We have spent three years building the largest online ordering service in cannabis and now is the time to take Dutchie to the next level. We will accelerate in every aspect, from building a world class team, to delivering the industry’s best product, and continuing to push the boundaries with innovative and exciting ways to connect consumers and dispensaries.”

Dutchie Founders, Ross and Zach Lipson

The company was launched in 2017 in Bend OR with three dispensaries. By 2018, it was in 50 stores and closed a $3 million seed round from Casa Verde Capital and high profile angel investors. In 2019, the company had grown to 245 stores in nine markets and raised another $15 million. It is now in 1300 stores and 32 active markets. Lipson added, “We’re excited about the opportunities our new funding round gives us to continue recruiting top talent and developing innovative technology and products to meet the evolving needs of dispensaries and customers while helping the legal market mature and grow.”

Grabbing Market Share

To get an idea of how big Dutchie is getting consider that this company processes 10% of all legal cannabis sales worldwide, and powers 25% of all legal dispensaries across 30 markets and 301 cities in the United States and Canada. Dutchie said in a statement that it processes approximately 75,000 orders a day—a marker that continues to increase—and is facilitating over $2.4 billion in annualized sales. The e-commerce solution equips dispensaries of any size with the necessary tools to meet surging market demand for online ordering, curbside pick-up, digital payments, and deliveries.

“Since leading their first round of financing in 2018, the Dutchie team has continued to impress us with their maniacal focus on execution,” said Karan Wadhera, the Managing Partner of Casa Verde Capital. “Under Ross’ leadership, the business has achieved unprecedented growth across every critical metric.”

COVID Opportunity

While the pandemic has proven to be a challenge for many companies, Dutchie was actually in a position to capitalize on market disruption. Since the company provides cannabis retailers and consumers a socially distant and compliant way to shop and order online, it was able to quickly solve many owners problems.  The company offers tailored software that streamlines operations by automatically updating a retailer’s online menu, and can give customer support with an average response time of less than one minute.

This latest investment reflects the company’s exponential trajectory in just three years and firmly establishes Dutchie as the clear market leader. The company is also hiring for several remote jobs that can be found on its website.


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