Even for Eaze, Compliance Remains a Struggle

Director of Compliance Jeremy Siegel breaks down the process of getting up to code.

Since 2014, Eaze has been a powerhouse in the emerging field of technology-driven cannabis companies. Billed as an interface to connect consumers with dispensaries that deliver to their door, Eaze is careful to note that the company never touches the plant — but of course, it’s that plant that has become the company’s medicated bread-and-butter.

Positioning itself as a conduit linking manufacturers, dispensaries — who, in turn, are responsible for the deliveries themselves — and consumers, Eaze’s model has appealed to investors, leading to $27 million in Series B financing. However, like every other facet of the cannabis industry, the onslaught of regulations posed by the passage of Proposition 64 meant new challenges for the Bay Area start-up.

That’s where Jeremy Siegel comes in. Three months ago, he became Eaze’s director of compliance. He now oversees a team that makes sure not only that Eaze adheres to the law, but that its 60-plus partners get up to code, too.

The latter effort has become Siegel’s primary project.

“We can’t survive or operate if our partners aren’t fully compliant,” he says. “We’re not giving legal advice, but I’ve turned my team into a resource for them.”

In essence, Siegel carefully vets every partner affiliated with Eaze — both product manufacturers and dispensaries — to ensure they were above-board regarding the laws that went into effect on Jan. 1.  Not everyone made the cut. At first, Siegel’s focus was on making sure these partners obtained the new temporary licensing Prop 64 requires, but more hurdles soon followed.

“There were issues with packaging and with products not being compliant with the laws, which are complex and not easy to digest,” Siegel says. “These are things that were just not under consideration for the last 10 to 20 years.”

One area that Siegel found particularly troublesome was California’s child-resistant packaging requirements, which are unquestionably more stringent than those in other states with a regulated market. For example, in both Oregon and Colorado, a customer’s entire order must be contained in approved child-resistant packaging. In California, each individual product must also be encased in similar packaging.

“That’s probably taken the most effort,” Siegel says. “Just trying to find solutions to that for our partner brands.”

Another interesting area is advertising. Most Bay Area residents have seen an ad for Eaze on a billboard or stamped across a Muni bus. The company has more publicly visible advertising than any other local cannabis-related enterprise, and to ensure its advertisements are compliant requires adhering to matters of wording, imagery, and location. It’s a constant game of catching up to the law, and a situation where predicting what changes may come next can be nearly impossible.

In order to stay on top of compliance in these various areas — in addition to rules governing cannabis delivery, which remains the cornerstone of Eaze’s platform — Siegel has a team closely monitoring the seemingly endless array of bills being considered on the local, state, and national level.

Many people have rightly noted that, as California’s regulated cannabis industry takes baby steps, big companies flush with venture-capitalist money are not necessarily the future most envisioned. The idea of the small farmer able to make an honest living cultivating marijuana has been revealed as a fiction, but there are reasons to support Eaze.

For one, many small dispensaries lack the resources to comply with the law. From expensive child-resistant packaging to full branding redesigns and beyond, having the support of a compliance team at Eaze could be the difference between thriving and shuttering your doors for good. While for now, that knowledge is reserved for Eaze’s partners, the concept is something other larger businesses in the cannabis space could and should implement as well. If companies with the assets required to fund a team capable of providing accurate and timely information on current marijuana regulations partnered with the smaller businesses in this evolving sector, it would assuredly benefit all involved.

Another valuable asset is the statistics Eaze offers for public consumption as part of two surveys the company conducts with consumers. The 2016 and 2017 editions of  “The State of Cannabis” offer insights into the demographics of cannabis consumers — or at least, consumers who use Eaze. It’s a powerful source of evidence for when demanding regulators and lawmakers act in the public’s true interests.

For example, of the 10,000 people Eaze surveyed for its 2017 “The Modern Marijuana Consumer” report, one in five respondents were parents, and 91 percent were fully employed. Keeping in mind that someone without gainful employment would likely be unable to take advantage of Eaze’s services, these numbers still strongly combat any idea that the typical cannabis consumer is jobless or unable to handle adult responsibilities.

It may be that in order for the regulated market to flourish, small players and big companies will need to play nice and work together. That may sound a tad utopian, but if the result is a legalized cannabis industry that works from the bottom up, it’s likely a necessary course of action.

Zack Ruskin covers news, culture, and music for SF Weekly.
feedback@sfweekly.com |  @zackruskin

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