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When Free Weed Doesn't Work - By - November 25, 2015 - SF Weekly
SF Weekly

When Free Weed Doesn't Work

It's a good time to be one of California's roughly 1.1 million marijuana users. Yes, cannabis is legal for recreational purposes in Oregon, Colorado, Washington, and elsewhere — but so what? In the Golden State, weed is also widely available — and for free.

For years, medical cannabis dispensaries have offered promotional gimmicks like a free joint or edible for first-time patients. This year, as the state's biggest cash crop inched towards $2 billion in legal sales at storefronts, several outfits started offering free eighths (worth about $50) — and they have gone to great lengths to make sure that patients are aware of the offer of free pot.

Case in point: About a month ago, I renewed my doctor's recommendation for medical cannabis (Yes, friends, good news: I am still sick). On my way out of the doctor's clinic, I was met by a “brand ambassador” for one of the new, well-funded weed delivery startups. He handed me a coupon for $50 off my first order — and then handed me a few more, “to give to your friends.”

Large and small, many cannabis companies are trying to entice users to their services by promising free cannabis. Eaze, the year-old company founded by a software tycoon — and the firm with the biggest and most consistent presence at the New West Summit cannabis conference at the Parc 55 Hotel this past weekend — is in on this, as are newer entries like delivery service Quil (which is offering, after an initial $49 credit, “$7 off your next 7 orders!”).

Historically, the medicine offered as part of a promotion is low-quality, like the aforementioned prerolls (notorious for their harshness, but appreciated for their freeness). Not so now: While you won't score an Emerald Cup-winner for free, you can apply the discount to the service's main menu.

This is done for several reasons. One, for startups backed by venture capital, growing the user base is initially more important than turning a profit. And two, free weed apparently entices the beneficiaries to buy more. In this way, each new user enticed to a service is worth much more than the $50 up-front investment — even, in some cases, if nothing further is purchased (since growing the user base rather than sales is what pleases some VC funders).

Free weed hasn't worked for everybody. “Cannabis of the month club” Marvina — which delivered a different selection of top-shelf bud every four weeks, and allowed you to offer one free trial delivery to a friend — ceased operations in October, just a month shy of its one year anniversary.

Despite interest around the country in the seemingly-unbeatable offer of free weed, Marvina “had trouble attracting new customers,” founder Dane Pieri told me recently.

Marvina was bootstrapped and had a limited marketing budget, he added, and since it's a cannabis business, it was not allowed to advertise on platforms such as Facebook and Google (Silicon Valley is conservative on weed; Facebook-owned Instagram still shuts down cannabis-related accounts).

However, free cannabis is working for established players as well as high-tech newcomers. One storefront dispensary operator seeking to promote a new delivery service has offered a promotion for $25 off a first delivery. The service is now selling $100,000 of cannabis a month — just off of delivery.

DOJ HANDS OFF TO CONTINUE — and BEYOND

U.S. District Judge Charles Breyer's affirmation last month that a Congressional amendment limits the Justice Department's ability to enforce federal marijuana law was one of the biggest-ever victories for legal weed. In fact, as Breyer ruled, the Farr-Rohrabacher amendment to the DOJ budget means that, in states where cannabis is legal and the cannabis activity is following state law, the DOJ cannot enforce federal marijuana law at all.

The amendment in question is set to expire with the next omnibus spending bill. But the amendment's chief authors, U.S. Reps. Dana Rohrabacher (R-Huntington Beach) and Sam Farr (D-Carmel) have pledged not only to renew it, but to expand it. In all, 56 members of the House of Representatives have signed a letter calling for the limitation of the feds' reach to be renewed.

The omnibus bill could be final as soon as Nov. 30. And while it's not a rescheduling of cannabis or a repeal of prohibition, it's the next best thing.

WHAT DOES WILLIE WANT?

One more tidbit for you as you pick through leftovers: Assemblyman Rob Bonta (D-Alameda) was one of the principal authors of the Medical Marijuana Regulation and Safety Act, which Gov. Jerry Brown signed into law in October (after Brown's people rewrote the thing in August, but: details).

The rules are some cause for concern, as — among other things — they insert into the cannabis supply chain a “distributor,” to whom cannabis must be sent from a producer before it can reach a dispensary shelf.

Addressing concerns from industry operatives, Bonta spoke at the New West Summit on Saturday, pledging that “clean-up” language would be introduced in the next legislative session.

Minutes afterpromising this to the marijuana industry at the Parc 55 Hotel, Bonta was seen having a spirited discussion with former San Francisco Mayor Willie Brown at the hotel's bar.

Brown, keep in mind, has done lobbying for industry powerhouses like Harborside Health Center — whose CEO, Steve DeAngelo, wrote a recent book for which Brown provided the foreword.

What does Willie want this time around? We'll have to take a look at future “clean up” bills to find out.