Ubers of Marijuana Stick Workers with the Risk

At about 2:30 p.m. on June 10 last year, San Francisco police pulled over Cathy Smith while she was driving on Bryant Street in SoMa, just a block away from police headquarters at the Hall of Justice. It was bad timing. Smith, who at 5-foot-2 and not quite 60 years old has the bearing of a favorite, fun aunt, had just smoked a joint in her Honda hatchback, which also had expired registration tags.

After sniffing the odor of burned pot, the cop, in his first year on the force, asked Smith if she had any more cannabis on her. She did. A former operator of a SoMa medical marijuana dispensary, HopeNet, which was shut down under federal Justice Department pressure in 2012, Smith was out that day doing deliveries to her former patrons. In various forms — hash, edibles, and individually wrapped bags — she had about 8 ounces, the legal limit for medical marijuana patients in San Francisco under SFPD policy.

That didn't matter. After police found the delivery stash in the Honda's hatch, Smith was handcuffed and put under arrest. Along with the marijuana, police seized Smith's cellphones — full of text messages from her next customer, wondering about her ETA — and $2,700 in cash. According to the police report, not once did police inquire as to whether Smith was a legal medical cannabis patient or provider. Neither did District Attorney George Gascon, who saw fit to charge Smith with three felonies for possession of marijuana for sale (plus one misdemeanor for the expired registration tags).

After seven months of wrangling in court, Gascon's office dropped the felonies and settled for Smith entering a plea of no contest for driving with an expired registration. Police returned the phones and the cash, but kept the marijuana (which has presumably been destroyed).

Smith's situation is not unique. Medical marijuana has been legal in California for 20 years, and San Francisco has licensed and regulated storefront dispensaries for 10. And while it's legal for an adult to provide cannabis for another adult, and take money in exchange, there is no “permit” for a medical marijuana delivery service — and no police training to see if someone with a bag of pot in the trunk has the paperwork that separates lawful conduct from drug dealing.

Her ordeal is also a warning that workers in a fast-growing sector of the cannabis industry should heed. As marijuana continues to boom, eager tech-savvy entrepreneurs are using delivery models as their entry point into this multibillion-dollar market. There are now at least four startups that tout themselves as either the “Uber of marijuana” or the “Grubhub of cannabis,” all of which promise a bag of pot delivered to your door in minutes, by a driver dispatched via smartphone.

But in the same way that Uber does not employ professional livery drivers — their workers are independent contractors — nether do these startups employ cannabis delivery drivers. They are quick to say that they are “software companies” and not cannabis companies. That makes them much more attractive to venture capital, but it also means that the drivers hailed via Eaze or Meadow, the two most prominent “Ubers of marijuana,” assume all of the legal risk for the cannabis riding in the trunk.

These are jobs that pay between $15 and $20 an hour. In today's gig economy, that can sound like good pay for a job that doesn't require a degree — but just like other jobs in the gig economy, all of the risk involved is squarely left with the contractor. And unlike other jobs in the gig economy, the risk here is immense. It's not an unlicensed, possibly underinsured taxi alternative you're providing: you are trafficking a Schedule I controlled substance that even San Francisco cops are happy to bust.

Delivery drivers are possibly in one of the riskiest situations of anyone in the marijuana economy. Driving around San Francisco traffic for eight hours a day with a bag or suitcase full of cannabis “exponentially increases your chance for contact with law enforcement,” said attorney Derek St. Pierre, who handled Smith's case.

“I don't think most marijuana delivery drivers know what they're getting into,” he said. “Is it worth the assumption of risk?”

In Smith's case, her brush with law enforcement — which, to be fair, could have been avoided had she been vigilant with her vehicle registration — resulted in months of legal fees and the loss of several thousand dollars' worth of cannabis. It is unlikely that the average person chasing after an $18 an hour job can afford over $10,000 in legal liability.

Despite significant venture funding from the likes of Snoop Dogg and its own bootstrapping — Eaze founder Keith McCarty was an early employee of Yammer, which sold to Microsoft for $1.2 billion — it does not appear that the “Ubers of marijuana” have the drivers' backs.

McCarty did not respond to emails seeking comment. A spokeswoman for Meadow, which is now delivering via drivers who use the Sidecar app, said that any protocol for dealing with police — or shelling out for legal fees — rests with the dispensary that's contracted to use Meadow's software. Again: not the app's problem.

Calling the worker a contractor and sticking him with the risk while reaping the reward is a tried and true Silicon Valley tactic. It has made Uber CEO Travis Kalanick a rich man. And true to their names, it appears the “Ubers of marijuana” are entering the cannabis industry — which, from seed to sale is a labor-intensive undertaking — while following his lead

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