Business

San Jose lifts ban on cannabis delivery, allowing startup to start up

SAN JOSE — Add marijuana to the list of items San Jose residents can order and have delivered to their door without ever leaving their couch, starting this week.

San Francisco startup Eaze launched its on-demand medical marijuana service in San Jose on Tuesday after the city removed its ban on cannabis delivery. The app, which lets customers order everything from pre-rolled joints to cannabis-infused mints, now serves the entire Bay Area.

“We’re excited that it finally came to fruition,” CEO Jim Patterson said.

San Jose was one of a number of California cities that banned the delivery of medical marijuana in January of last year, after Gov. Jerry Brown signed the Medical Marijuana Regulation and Safety Act— a slew of bills designed to regulate the burgeoning industry in the state. The act permitted delivery but also gave individual cities the freedom to ban or regulate it— an option many, including San Jose and Emeryville, took. Both have since rescinded their bans after what Patterson described as a misunderstanding was corrected, making it clear that a city wouldn’t lose its right to regulate delivery if it didn’t immediately crack down on the industry.

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The change is something that was supported by community members like Rev. Jethroe Moore II, president of the San Jose Silicon Valley NAACP and pastor at the Rehoboth Christian Center in San Jose.

“I’m thinking about those who can’t get out of their homes,” he said, adding that Eaze is like Meals on Wheels for patients with cancer and other ailments who are too sick to drive to a dispensary.

The company mascot at Eaze stands guard at the front window of the on-demand marijuana delivery startup in downtown San Francisco. (Karl Mondon/Bay Area News Group)

Eaze will work with The Guild, a San Jose-based dispensary, to delivery marijuana products to patients’ doors. Customers must have a doctor’s recommendation, which they can obtain through the EazeMD app. The marijuana is delivered by a Guild employee — Eaze’s app facilitates the transaction, but the startup never touches the product.

Guild is one of just two dispensaries licensed to deliver medical marijuana in San Jose— the other is Elemental Wellness. Any other business caught delivering cannabis in the city could face fines of up to $50,000 per offense per day.

Patterson said Eaze, which operates in about 100 California cities, worked with the San Jose Police Department to launch its service in the city. Patterson said allowing delivery can be a good way to meet the demand for medical marijuana without the neighborhood controversy opening a new dispensary can cause.

“Most people actually are in favor of legalization,” he said, “but almost no one wants to live right next to a dispensary.”

San Jose, a city of 1 million people, has just 16 licensed dispensaries — and the city isn’t considering new applicants. Most of those dispensaries are clustered within a few blocks of two areas, either near the Santa Clara County Fairgrounds or the Bayshore Freeway.

Patterson said dispensaries often are pushed into industrial neighborhoods that can be inconvenient for customers. Adding delivery options can reduce the need to open dispensaries in new neighborhoods, Patterson said.

“You can kind of just do the math and see that there’s no way that 16 dispensaries can actually supply the demand for a million-person city,” he said.

California legalized recreational marijuana in November, opening up a new regulatory battlefront as companies like Eaze expand into that market. The rules that will allow businesses to sell and delivery recreational cannabis are still in the works— meaning Eaze will stick to medical delivery for now— but Patterson said he doesn’t expect much pushback against the eventual delivery of recreational cannabis.