With the onset of the COVID-19, lifestyles all over the world have changed in major ways. More than ever before, people are relying on delivery services to get their groceries, meals from their favorite restaurants, alcoholic beverages, and a whole lot of other things. However, for many reasons, some of which might be obvious, cannabis is a particularly tricky product to legally deliver.
Meredith Mahoney is facing these challenges head-on. She’s the president of Lantern, a cannabis business solely owned by Drizly. Currently serving customers in Massachusetts, Lantern helps people shop by dispensary, find cannabis products suited to their unique needs, and safely and legally purchase directly from shops from the convenience of their doorstep.
Today, Meredith joins the podcast to walk us through how Lantern got started, the challenges of building an online business in a highly regulated space, and what the company is doing to grow over the next several years.
KEY TAKEAWAYS
- Why Lantern, as a software company and not a delivery business, doesn’t need to be licensed on a state-by-state basis in order to operate.
- How a business like Lantern differs from food delivery vendors in terms of pricing structure.
- How Lantern finds partners, retailers, and dispensaries to work with – and how social equity and economic empowerment are part of the company’s mission.
- What makes using Lantern a better experience than most dispensaries’ own websites.
- Why Lantern hasn’t yet rolled out in states like Colorado – and how federal restrictions help protect the company from competitors.
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TRANSCRIPT
[INTERVIEW]
Rick Kiley: Hello, everyone, and welcome back to The Green Repeal. My name is Rick Kiley. I’m one of your co-hosts. I am again, of course, joined by Jeff Boedges. Hello, Jeffrey.
Jeff Boedges: Good afternoon, people. How are we doing?
Rick Kiley: I am doing pretty well in COVID-adjusted terms. As always, I judge I’m about a 7.8 on the 10-point COVID-adjusted scale.
Jeff Boedges: You’re on the right side of the dirt, man. That’s all that matters.
Rick Kiley: Yeah. It’s a sunny day. Things are getting better in Brooklyn. So, I’m really excited about our guest today. Today, we are going to be joined by Meredith Mahoney, who is the president of Lantern and she’s going to tell you all about what Lantern is, but it’s a really cool company in the cannabis industry. Hello, Meredith. Welcome to The Green Repeal.
Meredith Mahoney: Hi, guys. So, glad to be here. Thank you for having me.
Jeff Boedges: We’re very glad to have you.
Rick Kiley: Absolutely. So, before we just jump in, can you tell us a little about yourself and then how you got to be president of Lantern, which by itself just is a good title, President of Lantern like it has a lot of applications.
Jeff Boedges: I’m going to put that on my business cards.
Meredith Mahoney: If this doesn’t work out maybe, yeah, you apply it to something else.
Rick Kiley: I think it’s a good one. Yeah. Can you tell us a little bit about yourself, your background, and then maybe talk a little bit about what Lantern does?
Meredith Mahoney: Yeah, definitely. I live in Boston. I have spent my career building direct-to-consumer businesses. I’m old enough that in my early career, that meant brick-and-mortar and stores and catalog and all of those antiquated means of shopping.
Rick Kiley: I still get catalogs. They still send them down.
Meredith Mahoney: Yeah. I mean, they’re coming back.
Rick Kiley: Yeah, man.
Meredith Mahoney: About midway through my career, I’ve pivoted to digital. I was with Wayfair. Most of us now know Wayfair, big online furniture company, but at the time it wasn’t big. It was maybe a couple of years into its founding.
Jeff Boedges: That explains the very stylish glasses you’re wearing.
Meredith Mahoney: I guess, more of these look smart for you guys.
Jeff Boedges: Can you send us some of those? We could use them.
Rick Kiley: Yeah. You can’t see. This is radio but she’s got some cool glasses on. She does look smart.
Meredith Mahoney: Thanks. I got a face for radio I hear. Yeah. So, when I joined Wayfair, it was not even Wayfair at the time. And anyway, while I was there for eight years, I found it and grew up three of the portfolio brands for Wayfair so Joss & Main, Birch Lane, and then Well Studio was another. So, that was really fun and cool time in my career. I was learning all about digital marketing, about scaling a business, about technology, UX, like everything that goes into a direct-to-consumer e-comm business and met like the smartest people out there. It’s a phenomenal organization. Left there. I wanted to do something smaller and I went to run a small, clean beauty company based here in Boston, Follain. That was a great experience as well. I realized I’m probably not the right person to run a beauty company. It’s like beauty is a very specific industry. Lots like specific expertise but what I liked about it and is related…
Jeff Boedges: Yeah. We’ve had our own experience with that. Yeah. Sorry. Keep going.
Meredith Mahoney: Oh, no, no. This is related to Lantern, I promise.
Rick Kiley: Okay. Let’s get there.
Meredith Mahoney: What I did like about that role is we were trying to educate the consumer. We were trying to bring not in beauty is not new, but clean beauty is new. It’s like a newer category in the market, trying to figure how to talk to the consumer. And so, all of those things really were the things I liked about it and are the reasons I got excited to work in cannabis. And now my role at Lantern as president is to, we’re launching a cannabis e-comm marketing and delivery platform. I was very drawn to it because it’s a category that is a very old category, but not in terms of like being a legal business. Even obviously, the question of whether it’s legal is one that’s debated depending on who you talk to. Just really it’s the idea of bringing something to the mainstream that’s existed kind of in the shadows for a long time. And that is actually where the name Lantern comes from. It’s the idea of shining a light on a category that has operated in darkness for a long time.
Rick Kiley: Awesome.
Meredith Mahoney: So, I found my way to Lantern and here I am now.
Rick Kiley: That is cool. That’s great. So, one of the reasons we wanted to chat with you is because, and maybe you can explain a little bit about this relationship, but Lantern is part of Drizly, correct? Connected with Drizly.
Meredith Mahoney: Yes.
Rick Kiley: Drizly is an online e-commerce platform that’s for the alcohol beverage industry and Jeff and my agency is working with alcohol beverage since the beginning, for 15 years, and we’re very aware of Drizly. We’ve worked with Drizly through some of our clients’ programs before. So, could you explain how Lantern and Drizly are related? Is it a fully-owned subsidiary like a new business or is it a separate company? Like how did that come to be and how did that happen?
Meredith Mahoney: Yeah. So, officially, we are a separate company. We’re solely owned by Drizly, Inc. But we have the Drizly Company, the Drizly, LLC which is the bev/alc side and then Lantern is the cannabis business. One of the co-founders of Drizly is the founder of Lantern. We share office space. We share expertise across the two companies. While they do operate financially, independently, as a team we’re pretty closely connected. And the technology that Drizly built over eight years was the founding technology for Lantern.
Jeff Boedges: From a legal standpoint, is it a state-by-state organization? Because most of the cannabis companies we deal with they’re all state organized for obvious reasons. So, I’m curious, Drizly, I don’t think is a state-organized organization but now Lantern is. Is that accurate?
Meredith Mahoney: No. We’re not a state-by-state organization. Because we’re a software company, we are not a licensed-holding cannabis business and so there’s a bit more flexibility in how our corporate governance is setup.
Jeff Boedges: Okay, cool. That’s great.
Meredith Mahoney: Yeah.
Rick Kiley: I know we may not have talked about this ahead of time, but maybe you could walk us through like what’s the consumer experience of using Lantern? So, if I am someone who’s interested in buying a cannabis product, I go to the website and what happens? Maybe you could just like walk me through that.
Meredith Mahoney: Yeah. So, we are a team of e-comm veterans and so our approach to the way we want you to experience that transaction is for it to feel really familiar as if you’re shopping for a pair of pants or towels. You can browse and shop without entering an address but to get the best customer experience, we were really putting the address capture first because we want to understand which dispensary service your address. You enter your address. It will show you the products and the dispensaries that you can receive delivery from. You can either shop via dispensary. So, if you have a dispensary you love, you can start there. If you want to shop product first, you can do that. You go through a very typical online shopping experience where you can filter, you can shop by extreme, shop by product type, whatever, add product to your cart.
At that point, you’ll be shown the payment options that the dispensary offers. You’ll see the delivery fee that the dispensary charges. We don’t charge our own fee. So, you’re just seeing the fee that the dispensary charges and you’ll then “checkout” and I kind of use air quotes for checkout because we don’t do any of the financial transaction. But you essentially place your order through Lantern. The order goes to the dispensary. If you’re a medical patient, they check your medical information, your patient number, are you still under your cap for the month, and then they pack the order, and then in Massachusetts, the medical dispensary employees are doing the delivery. It’s kind of state-by-state who does the delivery. Lantern does not do any of the deliveries. So, in Massachusetts, the dispensary employee shows up at your house with your product. You do the financial transaction there, either through cash or like cashless debit and then they’re on their way and you have your product.
Rick Kiley: Got it. All right. So, you answered one of my questions that came up later. You do not actually provide delivery services. So, that’s interesting to know. I’m curious like on the Drizly side, is the ability to select your own store there is that new for the Lantern piece? Because I felt like Drizly it was just you ordered the product and you didn’t even see the back end as sort of who was fulfilling it.
Meredith Mahoney: Yeah. So, Drizly’s had obviously many, many years of testing different features and different paths and then is optimized for what the way customers want to shop and so we haven’t been through that yet. In some states, actually, you have to shop dispensary first so we built that functionality from the beginning.
Rick Kiley: Got it.
Meredith Mahoney: I’m going to keep talking about Massachusetts so apologies to all your non-Mass listeners but in Massachusetts, you can shop either way but, yeah, we also just want to make sure that it’s a worst customer experience for you to start adding things to your cart that come from different dispensaries that’s going to end up like creating a bunch of orders so we really want to try to get you matched to a dispensary pretty upper funneling the experience.
Rick Kiley: Okay. That makes sense. So, I guess, kind of the big question, I have a little question but I’m going to find a different time to ask it but what sort of caused Drizly to want to get into the cannabis industry, to begin with? Like today just seize the opportunity where you feel like their technology applied like how did that come to be?
Meredith Mahoney: Well, I think early on they realized that they had a really powerful combination of flexible technology products. They had created really strong regulatory relationships across the country. They just had figured out how to do a lot of the right things in a regulated category. And so, they’ve got asked all the time why they were not doing it in other regulated categories and cannabis being the top one. But they were really focused for many years just on building that bev/alc brand. And then in 2018 when cannabis really kind of hit the scene in Massachusetts, it became obviously that they wanted to pursue it. I say [Beck’s – 12:08] joined the company at that point but they saw the opportunity. It was the right time. They took on, that was around the time they were doing their Series C. One of the Series C investors also had investments in cannabis technology. So, this looks like the timing worked out very well. I think they also realized in early 2019, they kind of had the bandwidth at that point to peel one of the founders off and have him focus on that fully full time.
Rick Kiley: Got it.
Jeff Boedges: Do you mind if I ask which states you’re operating in right now besides Mass?
Meredith Mahoney: We’re only operating in Mass right now but we will be operating in Michigan this summer.
Jeff Boedges: Okay. Is it adult-use in Michigan now? Or is it medical?
Meredith Mahoney: Yes.
Jeff Boedges: Okay.
Meredith Mahoney: It’s both and I think another thing we have to think about obviously is even in some states that are adult-use, delivery is not legal. So, Michigan is the next place that makes sense for us from it’s medical and adult-use, and delivery is legal on both of those. There’s a couple of municipalities where delivery is not legal yet, but it’s enough. There’s enough there in Michigan for us to go there.
Rick Kiley: Got it. So, the plan to get involved in cannabis was in the works for a while. It wasn’t like, “Hey, COVID’s here. No one could go get this stuff. Delivery is really like going to be the thing so let’s do this now. That wasn’t like part of the decision-making process?
Meredith Mahoney: No. I get asked that question a lot and I laugh because I’m like, there is no way a cannabis business could have gotten stood up in eight weeks, 10 weeks.
Rick Kiley: I think you should just talk about your nimbleness.
Meredith Mahoney: Yeah. Those thing is like…
Rick Kiley: It’s the opportunity we have on. We got the best team of developers out there, man.
Meredith Mahoney: Man, it doesn’t matter what we did. The regulatory landscape in Canada is like glacial. So, no, it’s been in the works for about a year-and-a-half.
Rick Kiley: Yeah. Okay. I’m curious, is there any plan to get involved in the medical use states because like in New York here, it’s medical but delivery now is okay like because it’s medicine like I think delivery with medical piece seems to be happening more. Is that in your plan?
Meredith Mahoney: For sure. We were actually in pretty regular talks with operators in New York, some of the regulators in New York. So, New York is definitely something on our minds. I think for us, I’m always thinking about what’s the right mixture of ease of entry, providing an additive service to the customer. There’s no sense to go into a market where they already have a lot of delivery options. There’s just like a number of things. I think New York for sure would be a great place for us to be from a medical delivery standpoint.
Jeff Boedges: I know some states. I think New Jersey, in particular, where I happen to live is that there is some issue with they don’t allow delivery and they only allow certain people, caregivers, like registered caregivers for a certain individual to go pick up their prescriptions. I feel like especially now at a time of COVID when you can’t leave and where people maybe even in more need of this type of service that it makes a lot of sense for you guys to be in places like this.
Meredith Mahoney: Yeah, definitely.
Rick Kiley: Yeah. Cool. So, wait, you said the delivery fee and everything is going to the dispensary. So, how are you monetizing your business right now?
Meredith Mahoney: Yeah. We charge the dispensary. It’s essentially a percent for the merchandise value that goes through our platform. We’re also a marketing engine so we’re doing all of our own customer acquisition. The idea I think is that we drive new customers to the dispensaries, customers that are incremental to their business, and then we share the customers so then they’re free to market to those folks and like create that relationship directly with that customer. With our partner we have right now live in Boston, it’s been a really beneficial relationship on both sides.
Rick Kiley: Cool.
Jeff Boedges: That’s great. That’s very different than the food delivery industry right now, which I think is really under fire for taking too much. It seems like you guys have a better relationship. Is that accurate?
Meredith Mahoney: When we were small, I think, like, yes, there’s for sure predatory and kind of advantage being taken probably of some of these small restaurants. I think though, one of the misconceptions about technology companies is that there’s no overhead or like low to no overhead and particularly, consumer brands. Customer acquisition is very expensive. And so, the value that I’m not going to probably want to comment on like Uber Eats and DoorDash and all those guys because they have, I don’t know what their profitability models look like but for us, we want the dispensaries to see the delivery business through Lantern as profitable for them and incremental to their business. It does not make sense for them to partner with us if they lose money. So, we’re really careful about making sure that our fees reflect that, that we only work with people where we think we can drive significant volume. And again, like, do we provide an incremental service to the customers in those communities?
Rick Kiley: Right. Would a cannabis brand be allowed to like advertise with you? I mean, I think allowed is one question from a regulatory standpoint, but also then just like, is it something that you guys are doing?
Meredith Mahoney: We’re not doing it now but again, we’re so early in the live part of our lifetime, of our business. I think that when I think about what are the things we’re doing in the next 6, 12, 24 months, right now, our focus is like very operational, and then we’ll move into this phase of kind of like advertising innovation and that question will definitely be on the table.
Rick Kiley: Awesome. Well, then let’s go talk about some of those painful operational things. So, one of the things that even in the alcohol beverage industry, which you’ve built out, maybe people don’t know but different laws exist in every single state and any sale of any alcohol beverage product needs to be fulfilled by a licensed retailer that’s in that state. So, I know that you guys have had to undergo the painstaking process of building out a retail network state-by-state across the country and every state that Drizly operates.
Jeff Boedges: Yeah. It’s not just the network. It’s the logistics that changes state-by-state. It’s a massive undertaking.
Rick Kiley: Yeah. And I know because I remember when Drizly was in its infancy, you launched in only a few states. I think you were working like only New York and DC at the beginning and people were coming and it’s like, “You got to try Drizly. They’re great. They’re just in those areas,” and so obviously, you took a patient approach there with that business. You’re able to build it out and grow it. I’m guessing you’re using that same sort of blueprint in the way you’re building out your retail network state-by-state one at a time and looking to grow incrementally?
Meredith Mahoney: Yeah. I mean, I don’t think there’s any other way to do it responsibly. I think that we’re not the first cannabis delivery company to go out and try to do this. And so, we’ve seen what happens when you move fast, if you operate kind of fast and loose. And so, anytime we enter a market, we meet with the regulators first. We get to know them. We say, here’s what we’re doing. Is there anything we should be thinking? We obviously get very educated on the regulations, but we make sure that…
Rick Kiley: So, like, you’re talking about the governing agency of the state?
Meredith Mahoney: Yeah. So, like we know the folks in Michigan. We have local council there. And, honestly, to get very granular, we run our advertising by them. Through our attorney, we say, “Are the language good?” And honestly, we probably don’t have to hold ourselves to that standard because we’re not a licensed business but we do. So, that’s not your question. Your question was just state-by-state strategy. Yes, we’re doing that because we want to make sure that, yeah, we’re doing it in the right way.
Rick Kiley: Yeah. So, what’s your approach then to finding partners, retailers, and dispensaries? Is it a free-for-all? Anyone’s welcome to play? Are you trying to identify certain specific retailers that you think will represent the brands well in certain communities?
Jeff Boedges: Have you thought about having a contest? Let’s make it interesting.
Meredith Mahoney: If I could do a contest and get anyone’s attention this week, with adult-use going live again next week in Massachusetts, I would do it in a second.
Rick Kiley: Maybe we can solve that by the end of this.
Meredith Mahoney: Yeah.
Jeff Boedges: I’m on. I’m on.
Meredith Mahoney: Also, we’re a startup so I have nothing to give away except…
Jeff Boedges: T-shirts. All you need is t-shirts.
Meredith Mahoney: I do have t-shirts.
Rick Kiley: We’ll just have to come up with a creative slogan for the t-shirt.
Meredith Mahoney: Yeah. Startups may have no cash, but they’ve got swag.
Rick Kiley: Yeah. Alright.
Meredith Mahoney: I think a couple of things. We need to obviously make sure they’ve got the bandwidth to take on delivery, which is not hard but we got to make sure that they’ve got kind of technical expertise to integrate with us and that they have the appetite to do it. We are talking a bigger kind of multi-location folks right now not because that’s a preference as much as it is. It’s just we’re a small team and it helps the business development conversations be a little bit more productive. But if we’re going to throw up advertising all over a city and work, we’ve got coverage and three quarters in the city and maybe a couple of neighborhoods, we’ll definitely work with some single operators. We got to make sure we’re having a targeted approach versus there’s just not enough. We don’t have enough bandwidth right now to kind of hit like every dispensary in the city. Maybe one day. Like Drizly has thousands and thousands of liquor stores on their platform. We’re going to have tens for a while.
Rick Kiley: And a lot of the conversations we’re having with some other folks who are trying to like were working this industry and I think we talked about this earlier, is trying to make sure that some of the communities that have been affected by some of the laws that have been in existence for a while, a little commitment towards social justice in particular. Does that enter into your evaluation matrix at all to try to support like minority-owned or anything like that?
Meredith Mahoney: Yes. Social equity and economic empowerment was a key part of the way that they rolled out adult-use in Massachusetts and the founder of Lantern, co-founder of Drizly, he provided public comment. He’s been very involved in that initiative here in the state. We run an incubator program actually for third-party delivery companies that are being started by those business owners as applicants.
Rick Kiley: Interesting.
Meredith Mahoney: Yeah. It’s a six-week program. We’ve actually turned out I think seven or eight graduates, three of which have actually gone on to really go very far in creating their businesses. One of them is actually delivering for Drizly right now and has built like actually a huge business here in Boston.
Rick Kiley: So, wait. This is like a company that’s dedicated to delivery of products like these? So, they’re being trained to handle…
Meredith Mahoney: Yeah. We met him through some of the EE Networking here in the state, economic empowerment networking, and he will run a cannabis delivery company but those licenses haven’t been issued yet. So, in the meantime, he started his delivery company and is doing bev/alc delivery for Drizly and has grown that business like crazy. So, yeah, and then I think the other thing to say about that is we believe so strongly in delivery being a very kind of low obstacle way for disenfranchised groups to get access to this industry. It’s probably the lowest capital way to start a business.
Rick Kiley: Sure. Interesting.
Meredith Mahoney: So, we really advocated for that.
Jeff Boedges: Is the regulatory easier than…?
Meredith Mahoney: It’s easier. It’s obviously not easy, but it’s easier compared to – well, I would say it’s easier but like, really, it’s less capital intensive and starting to grow or opening a dispensary. And so, we’ve really been vocal out there in other states and cities that are thinking about how to roll out social equity programs and we think delivery is a great way to do it. And putting guardrails around it like Massachusetts did for the first two years, all third-party delivery for adult-use has to be businesses run by social equity candidates.
Rick Kiley: Got it. It’s great for Massachusetts as well. Wow.
Meredith Mahoney: Yeah, it’s a great program.
Rick Kiley: You don’t have to be licensed to deliver alcohol beverage. Do you? I mean, I don’t know if you know but I like my grocery delivers…
Meredith Mahoney: Yeah. I do not know the answer to that question.
Rick Kiley: So, there’s a specific licensing process by the state for someone that wants to deliver cannabis.
Meredith Mahoney: Yes, exactly.
Rick Kiley: Got it. I know there’s special like delivery like cases or they just bring in bags like with prescriptions?
Meredith Mahoney: They’re bringing in bags.
Jeff Boedges: That’s saying black grocery, black plastic trash bag we used to get it in in college.
Rick Kiley: Yeah. Well, I worry about safety of like a delivery person in this industry because it’s carrying a lot of cash, number one. It’s still cash business for the most part?
Meredith Mahoney: Yeah. I mean, I don’t know the ratio of cash versus debit, but there’s certainly a robust debit component to this and there’s also regulations around how much cash they can carry, how many orders they can have out there going out. In Mass, the delivery drivers have to wear body cameras.
Rick Kiley: Wow.
Jeff Boedges: Do they have that big lighted sign on top of the car like Domino’s?
Meredith Mahoney: They do not.
Jeff Boedges: Fast and friendly.
Meredith Mahoney: Your neighbors can see cannabis delivery.
Rick Kiley: It’s like a version of that dashboard of hula girl that’s like a cannabis that goes back too, right?
Meredith Mahoney: Yeah.
Jeff Boedges: It’s a little more discreet than that I’m guessing.
Rick Kiley: That’s so funny. All right.
Meredith Mahoney: Yeah. I mean, the delivery piece and I hope this is where we can come in and advise is a little clunky still, like, you’re still kind of like dealing with cash in front of your house, in front of your apartment. And there’s no way that like in Mass you get to sign a manifest. There’s like a lot of regulatory stuff that makes it somewhat clunky, but like we’re doing all we can on the technology side to try to alleviate as much of that as possible.
Jeff Boedges: So, it’s not touchless in the time of COVID.
Meredith Mahoney: Not yet, unfortunately. Not totally touchless.
Rick Kiley: Even if you’re not running the delivery service, do you think you might build a delivery software platform that a delivery company might license and use?
Meredith Mahoney: Yeah. Drizly has one that some of their partners use it. Others use a third-party. Yeah, we can certainly do that. One thing I think about is, like, while we’re very versed in compliance, it’s not our whole job. And so, if we were to build that platform, we would have to make sure that we were like experts in compliance technology, the technology around delivery compliance and is that the time we have to spend on that right now?
Rick Kiley: Yeah. Cool. So, I guess you kind of touched on, it’s early, but how do you feel it’s all going right now? You guys hitting your marks? You feel good?
Meredith Mahoney: Yeah. We’re doing great. Actually, I think the benchmarks to how we’re doing that I think about do we have good partners? Yes. Do we have a good team? Yes. Do we have a good roadmap? Yes. Do we have a good competitive mode? I think we do. I think that we have a great brand. I haven’t really talked about the brand beyond delivery but our branding is very much about personalization and education and helping the consumer kind of figure out what the right product is for them. So, yeah, I think looking at all the things that matter when you’re starting a business even before you have huge volume that we’re hitting all those marks and I’m really happy about it.
Rick Kiley: How are you doing that… Sorry, Jeff. Go ahead.
Jeff Boedges: No. I was just going to say so you guys are creating your own menu pages there for these dispensaries so they don’t have to use theirs so you have a consistent sort of look and feel?
Meredith Mahoney: Exactly. So, they’re often using white label front ends like a dutchie or an I Heart Jane and that’s great for that purpose. That serves kind of if you are a customer and you just want to go to the dispensary page and you know you want one specific product, that serves that purpose fine. We are building again that very familiar, typical e-comm kind of journey through the site that feels like you’re shopping any other e-commerce site, and they feed their menu through our backend, and we show their product, their pricing, but all the product information, we get testing data from the dispensary, so you’ll be able to see like…
Jeff Boedges: The terpene mix, the whole…
Meredith Mahoney: Yep. When they have it, we show it and we’re always pushing them to give us more because that’s becoming more and more top of mind as people learn about cannabis. They’re learning about terpene profile and cannabinoid profile and how that works for their bodies.
Jeff Boedges: I think that in and of itself is it’s a cottage industry because between states, between dispensaries, between brands, there’s almost no consistency whatsoever in the information that you’re able to get. So, if your dispensary happens to be out or you happen to go to another state, and you have a real genuine medical need, and you need your brand, it’s very hard for a lot of these people to do and I would think like having you guys coming in, adding that level of consistency, even without delivery would be a huge push. I’m not trying to change your model, but you know.
Meredith Mahoney: No. It’s part of our model honestly like we have a vision of one day having and this is a vision at this point, but of having full cannabinoid and terpene data on every single thing we sell. And as we get to know you as a customer and you give us feedback on what you have liked and what effects you have had from different products, we can then say, “Hey, Jeff, when you want to feel energized, you should look for this cannabinoid and terpene profile,” and, “Hey, here are products that match that. Try these.” So, I think that’s something’s really missing right now from any shopping experience.
Rick Kiley: Sure. Yeah. It’s a big education gap. You’re kind of answering this question that I had already because when I think about Drizly’s business and your business like when I use Drizly, there’s usually only like one or two specific occasions. It’s when I go to my local store and I can’t find what I’m looking for because Drizly has access to everything so I can always find that or when I’m gifting to someone. And so, I’m curious as to sort of the value proposition that you offer. I think both the customers and the end-users, the customers, I feel like you’ve answered pretty clearly already by saying you’re going to bring them new consumers, you’re going to help drive people to their site and add incremental business. But on the consumer side, I think the question is, why would I go to Lantern rather than just like a dispensary website itself? And so, I think you’re talking about educating the consumer in a really meaningful way. Maybe you could talk about like how are you going to do that in a really interesting and meaningful long-lasting way?
Meredith Mahoney: Yeah. I mean we have a few different value props. The first is as much as I’ve talked about just delivery, our true value prop is on-demand delivery and so our goal is to be in enough dispensaries that we can service you in under 60 minutes loosely like we’re not the Domino’s like at all costs we’re going to get it to you 15 minutes or less.
Rick Kiley: Well, but you place that order and then 30 minutes later you place the Domino’s.
Meredith Mahoney: Yeah.
Jeff Boedges: There’s an integration play there for sure.
Rick Kiley: Hey, Domino’s, I don’t know if you’re listening right now but I think we got a good partnership.
Meredith Mahoney: So, we show like very clearer SLAs to the customer but the goal is get cannabis delivered now on-demand. Place your order now, you’ll get it sometime in the next 60 to 75 minutes. One thing that’s different between alcohol and cannabis is that this is pre-COVID. The dollars that go through online sales and alcohol are like 2% or 3% and in cannabis in mature markets, it’s like 40% to 50%. So, because of the way that cannabis has kind of grown-up and you would get your cannabis delivered to you from your dealer.
Jeff Boedges: I got a guy.
Meredith Mahoney: I got a guy.
Rick Kiley: But he usually doesn’t have a website.
Meredith Mahoney: Yeah, people are used to getting it delivered. I think that the key thing here is like a lot of the – so actually, let me take a step back. When I think about who’s in our competitive set, like who can you use to get your cannabis delivered today? You have Lantern like we’re trying to position ourselves as this very easy, e-comm, familiar experience, and you get it now. You have the Leaflys and the Weedmaps of the world. They’ve done a really great job of owning all of the SEO eyes on the web like they’ve produced particularly Leafly like anytime you want to learn something about anything in cannabis and you search it, you’re going to land on a Leafly page. You learn. It’s great and they’re building out transactional paths but if you think about another category like travel, I think about them as like the TripAdvisor of cannabis. If you want to research your trip, you go there but if you want to book your flight, you go to KAYAK.
And then the third is going directly to the dispensary website. Right now, most of the solutions for can’t afford dispensary e-comm platforms are not user-friendly. Don’t have images. You don’t get a lot of product information.
Rick Kiley: They’re not up-to-date. Like they’re not out-of-stock after you order it. Yeah.
Meredith Mahoney: So, like there will be customers that want to shop the content first. So many customers that want to shop dispensary first, but we think there’s going to be enough customers that want to shop marketplace first, which is really what we are. We’re a marketplace and that’s our value prop.
Jeff Boedges: It sounds like a really good value proposition for both consumer and for dispensary. I’m curious, are people clamoring outside of Massachusetts and Michigan to have you guys there? It’s California and New York for sure. Colorado for sure.
Meredith Mahoney: Yes.
Jeff Boedges: So, what’s the holdup? Sorry, I don’t mean…
Meredith Mahoney: No. It’s okay. Colorado actually is tricky because while they have delivery legal at the state level, the municipalities have to opt-in and only Boulder and another tiny town there have opted in. So, we are really deep in conversations and relationships in Colorado. It’s actually Drizly’s third-biggest market is Denver. So, Colorado will, you’ll see us there. I think on the West Coast there’s already players that are entrenched there that are doing what we do. The black market is really, really strong there and I think it’s just hard to make money out there. So, I don’t think our offering is quite there yet. We’ll go to the West Coast at some point, but it’s not on the immediate roadmap.
Jeff Boedges: Because you’ll have to because people will be like, yeah.
Meredith Mahoney: Yeah. I mean, there’s going to be absolutely no leeway for anything but the best, like the best experience we could provide because there’s already competition there.
Rick Kiley: Cool. And then I’m just curious like, is cannabis gifting something that’s allowed?
Meredith Mahoney: Unfortunately, no.
Jeff Boedges: If anybody listening wants to send us something?
Rick Kiley: Yeah, something from Massachusetts.
Jeff Boedges: Yeah, something nice. Not expensive like $300 or $400.
Rick Kiley: You’re not allowed to send booze across state lines either but people do it so I’m just saying FedEx…
Meredith Mahoney: I probably wouldn’t send it through the Federal Postal Service.
Rick Kiley: Maybe FedEx, I don’t know, private company? Who knows? It might get there.
Meredith Mahoney: No. There’s like the gifting piece, yeah, there’s a lot of like address match and name match things, unfortunately.
Rick Kiley: So, just shifting to our topic of the moment, do you feel that the health crisis is impacting your business? We know like in booze off-premise sales, way, way up. Nobody can get it in the on-premise because a lot of them are closed like, is it helping things? I’ve heard that a lot of cannabis dispensaries are selling more because people are more anxious and more anxious. I can’t come up with another word because it’s anxiety.
Jeff Boedges: They’re bored.
Rick Kiley: Yeah, bored and anxious.
Jeff Boedges: TV sometimes sucks and you need some way to make it better.
Rick Kiley: Yeah. There’s Laser Floyd special on there. But, yeah, curious how it’s impacted you. If you feel like it’s impacting your business positively or negatively or not?
Jeff Boedges: It’s Massachusetts, especially because you guys should know,
Meredith Mahoney: Yeah. It was both. I would say pre-COVID dispensaries had maybe like two or three things that they thought were important priorities and they would like every week get pushed to the bottom of the list and say delivery was one of them and then COVID hit and then delivery just pops the top of the list like in a very aggressive way. So, where we were having kind of initial conversations just getting to know people, they were like knocking down our door like how quickly can we get going? And so, that was a positive thing. In Massachusetts, you’re correct. The reactions and closing and opening of adult-use and all of that has been very hard on the dispensaries and they’ve had to address a lot of problems around their supply chain, around inventory, getting overstocked in inventory, having to service customers and I don’t blame them. They haven’t really been able to engage in the delivery conversation in a meaningful way because they’re like scrambling to figure out how to run their business in a different way.
But I do think going forward, I mean, we’re going to be living in a different world. Delivery is going to be very, if nothing else, consumers have been on this track toward delivery in a lot of categories for the last few years and this situation in the world has just accelerated that. So, I think that probably will be a net positive for us long-term, which feels weird to say.
Rick Kiley: Yeah, I know.
Jeff Boedges: There’s a lot of places who have positive stuff from it.
Rick Kiley: Yeah, sure. Scotts Miracle-Gro is doing very well because everyone’s gardening at home. I didn’t expect that.
Meredith Mahoney: I wouldn’t either, but it makes sense now that you say.
Rick Kiley: We’re doing this on a Zoom platform, which is doing very well. So, yeah, there are winners.
Meredith Mahoney: Yeah.
Rick Kiley: So, I’m curious, you’re an e-commerce vet and I’m…
Jeff Boedges: Not.
Rick Kiley: Not one. Thanks, Jeff.
Jeff Boedges: Yeah, that’s what I’m here for to tell you the things you’re not good at. All right, I got a list here. Hold on everybody.
Rick Kiley: Oh, boy. It’s very short. That’s a whole episode.
Jeff Boedges: I’m teasing. He’s good at everything.
Rick Kiley: Can you talk about like, what are some challenges building a brand totally online? I think consumers people we kind of understand what a brick-and-mortar experience is. You go in. You see how the brand presents itself. You’re immersed in retail, packaging, that you can touch feel. But online feels a little ethereal and a little weird sometimes. So, I’m curious if so like what you find to be the most challenging aspect of it are some challenges I’m sure we could go about an hour on this but maybe like a minute or two.
Meredith Mahoney: I mean where do I start? I think the thing is when you buy a domain name and you put your site up, no one can find it. No one can find it. If you search Lantern delivery today it will be on like the 18th page.
Rick Kiley: Wow.
Jeff Boedges: Top 20. It’s not bad.
Meredith Mahoney: There’s no search engine juice yet.
Rick Kiley: What’s number one? I’m going to do this right now. Is it like a picture of Paul Revere and bringing a pizza?
Jeff Boedges: You can actually order probably…
Meredith Mahoney: I mean it’s like a picture of a bunch of lanterns you can order.
Jeff Boedges: On Wayfair.
Meredith Mahoney: I know. All my worlds colliding.
Rick Kiley: Order lantern from the FoodBoss all the top food. What? Uber Eats.
Meredith Mahoney: So, the way that brands get around this when they start is they pay for their brand terms.
Jeff Boedges: They pay for the clicks.
Meredith Mahoney: Well, you can’t do that in cannabis because Google won’t allow you to have a cannabis company…
Jeff Boedges: That’s big insight.
Meredith Mahoney: So, things like this are very important to get the word out. Press is very important, just partnerships and meeting the community. It’s very grassroots from an advertising standpoint. But even outside of cannabis, it’s just when you start a business, making sure that people know where to find you and what you do in getting that messaging nailed like you need to be able to say to a customer what you do in like five words or less, and that’s not always easy. But the brands that do it, those are the ones that win.
Jeff Boedges: Are you guys developing your own content? It would seem like I mean, honestly, you should have that authority, that sort of credibility to go out and talk about cannabis to a community. And if you guys are doing the data capture and doing the consumer acquisition, I mean, that would seem like a really easy place to start.
Meredith Mahoney: Yeah. We are doing that. So, we have some content online and we started with content topics that we think they’re relevant to the products we sell, and kind of like of the moment and we’ll continue to build out that content platform and all of that education. I think, again, like specific to e-comm content, you have to make sure is additive to the consumer experience and not like something you create and bury in the back of the site because if no one looks at it, it’s not helpful. So, the really good content, the really good brands, they get content are the ones that like weave it into your shopping experience. Because otherwise, like no one’s just going to like go read a bunch of stuff that we have to say about.
Jeff Boedges: Sure. I mean, I want to do the online cannabis tasting. I just can’t figure out how to do it. It’s not like you can just have a little like you can with wine. It’s, “Oh, that tastes wonderful.” That’s really all you get.
Rick Kiley: I think you got to extend it over a number of days.
Jeff Boedges: Wanted online for a week.
Rick Kiley: No. You tune in. You got to tune in like once a day for 20 minutes and for over a five-day period.
Jeff Boedges: What time of day would that be in? 4:20. Sorry.
Rick Kiley: Four o’clock these days. I think we move up timeline in the COVID era. I think it’s 3:20.
Jeff Boedges: Yeah, that’s right. That’s good. 3:20. I love that. What’s better than 4:20? 3:20.
I think we need to copyright that now.
Rick Kiley: Sure.
Meredith Mahoney: I know. Get ahead of that.
Rick Kiley: Yeah. Man, I’m disappointed by the way that Lantern says they cannot deliver in my area just so you know, Brooklyn. Got to make that happen.
Meredith Mahoney: Yeah.
Rick Kiley: So, I’m curious, we know that there’s legal murky status for cannabis, right, federally legal in the States. Does that impact you at all in any way? Or because you’re not really touching the product, is it not really influenced you at all?
Meredith Mahoney: It does. It influences us in the same way it influences anyone in this industry. Because everything is happening at the state level, you can’t create any uniform policy or product or tech experience or anything. So, I think right now, it actually is helpful to us because just anyone can’t go do what we’re doing.
Jeff Boedges: That’s pretty significant barriers, yeah.
Meredith Mahoney: There are significant barriers to this and not to say that we don’t think federal legalization is the way that the country should go because I would say I do believe that It should be legal. But for the time being, we’re operating in a world, in a country where it’s not legal and we’re building all the solutions for that.
Jeff Boedges: What about the tax and financial implications? Again, because you guys are kind of in a gray area. Are you subject to the same sort of penalties that the rest of the supply chains are?
Meredith Mahoney: We’re not subject to the same penalties but a lot of financial institutions just take a blanket approach to not wanting to do business with any cannabis-related company, whether it’s a plant-touching entity or not. So, it did take us some time to find the right banking partner, the right insurance partner. The ones that we’re working with are fabulous and like are very supportive, but it’s not like…
Jeff Boedges: Anybody you want to give a shout out to?
Meredith Mahoney: No. I think I’ll keep that to myself.
Jeff Boedges: Okay. All right. All good. I’m good.
Rick Kiley: We’re worried about competition and trade secrets more.
Meredith Mahoney: No. but I mean, it’s very hard for our dispensary partners like it’s hard.
Rick Kiley: Yeah. I know. We’re aware. We’ve been talking to a lot of them. Okay. So, also curious, we talked delivery huge part of your platform. Is there anything you guys are doing to help, I don’t know, help keep people safe in this time? Are you taking any steps to deal with that? I’m curious as to what you’re doing. Are you helping arm the delivery people with PPE or is there training? What what’s going on?
Jeff Boedges: Branded masks.
Rick Kiley: Like branded lanterns.
Jeff Boedges: Oh, Lantern masks.
Meredith Mahoney: Again, the dispensaries do the deliveries themselves. However, we were pretty active in making sure that our partner here in Boston was taking the right steps according to CDC, and even here in Mass. As in you know, in New York, same thing has been very effective and so there’s been additional guidance given by the governor and the mayor of Boston. And so, our partner rep clinics were very, very proactive in making sure that they could do anything they could to make it as touchless as possible. Obviously, there are regulations around a live signature and around an ID check and all of that. So, yeah, we’re just trying to do all of those things as far away from the customer as possible and making everyone feel safe.
Rick Kiley: Yeah. Well, like it’s funny because one of my wife’s germ bugaboos for years has been actual cash. She’s like, “Cash carries a lot of germs. Wash your hands. Wash your hands.” And so, because it’s a cash business around in this time like that’s the thing that I keep thinking of is how are we handling cash or like people dropping it in bags and sealing it? No, I mean, that wouldn’t seem crazy to me. I’m just wondering.
Jeff Boedges: There goes Maytals delivery business right down the drain.
Rick Kiley: For this?
Jeff Boedges: Yeah, for this. Right.
Rick Kiley: There’s a lot of stuff where you don’t have to have cash. Piano delivery for instance. Very different business.
Jeff Boedges: Yeah.
Meredith Mahoney: I will say that the cash thing has accelerated some of the new payment options for our partners like they’re looking at there’s a lot of actually like really cool payment stuff coming down the pipe for cannabis that are legally compliant that aren’t cash. And so, that just kind of put that conversation at the forefront.
Rick Kiley: Yeah, that’s cool. I mean, we’re getting kind of towards the end here. I guess the last one is like how are you promoting yourself right now? So, like how are you trying to get acquire…
Jeff Boedges: I was going to ask you, how do you find these because you’re additive to the dispensaries by bringing in new customers?
Rick Kiley: Are you mining the Drizly database?
Jeff Boedges: Yeah. How do you figure out who’s a cannabis guy or girl?
Rick Kiley: Or do you just assume everyone?
Jeff Boedges: Is this a trade secret? If it is, it’s cool.
Meredith Mahoney: No, I was just going to say it’s the question how are we finding…
Rick Kiley: She’s very reluctant.
Meredith Mahoney: No, I was trying to understand is it the how are we finding customers?
Jeff Boedges: How are you finding new customers?
Rick Kiley: And how are you promoting your own brand? I think those are the two questions.
Meredith Mahoney: We’ve kind of gone slow and steady so far because we’re serving a pretty small area in our beta period, which was just a portion of Boston with one partner. So, we’ve been doing a lot of co-marketing with rep clinics. We’re partnering with some of the telehealth physician networks that are issuing that doing the like, they’re not in – the state issues medical cards, I got to be careful. They’re doing like that initial consultation. We’ve been working with some of the local patient advocacy groups. I think that once we’re on board, we have another partner launching in another city and Massachusetts up in the next month or so. We’ll expand our footprint. We’ll start doing some out-of-home advertising. We’ll start doing it’s like a little bit of digital advertising we can do. We’re doing a lot of press like we’re doing actually a Reddit AMA this afternoon with the Boston, actually, just both cannabis community in Boston. When we get into other areas where we are also doing adult-use, then the customer base is a lot bigger and we can put more money into market around. Like out-of-home advertising, you’ll see a lot of Lantern billboards, you’ll see like digital billboards, that kind of stuff.
Rick Kiley: Right. I’m curious since you said like education is such a big part of your platform, do you have any? Are you planning to hire anybody who is like basically an ambassador, someone who’s an educator in cannabis, someone who’s worked creating it, cultivating it, being a doctor who has prescribed it, as part of your team like to engage people directly? Is that part of the model?
Meredith Mahoney: We’re actually putting together an advisory board. And so, we’re at the early stages of that in early conversation that we propose.
Rick Kiley: Got it. You got any slots open?
Meredith Mahoney: We do. Want to apply?
Jeff Boedges: Yes.
Meredith Mahoney: Tough interview process.
Rick Kiley: Is it? All right, I’m down.
Meredith Mahoney: I assume. We haven’t really gotten there.
Jeff Boedges: Tougher than this interview? This interview is all about the hard questions.
Meredith Mahoney: Yeah. So, we should have a group of people across the industry across like patients and brand and consumer. We want to have some customers on there. Yeah. So, that’s I’d say in the early stages, but we will have that.
Rick Kiley: Good. All right. Jeff, do you have anything else on your mind?
Jeff Boedges: No, sir. I’ve been asking my questions as they occur. I think it’s crystal ball.
Rick Kiley: Crystal ball. So, this is our final question for everyone who comes on this podcast. I think you touched on it. We call this The Green Repeal because we do believe cannabis is marching towards federal legalization. And curious if you agree. And if you do agree, when do you think it will happen? Tell us. Give us your…
Meredith Mahoney: I agree. Cannabis will be federally legal at some point in the future. I think it is highly dependent on what happens in November.
Rick Kiley: What’s going on in November?
Meredith Mahoney: And I am not going to try to predict that one. My girl, Elizabeth Warren, yeah.
Rick Kiley: All right.
Jeff Boedges: Is not in the race anymore so I’m going to not comment on that one.
Rick Kiley: I’m a big fan. I don’t think her days on the stage are done. So, we’re going to see her doing something great soon.
Meredith Mahoney: Yeah.
Rick Kiley: Cool. Yeah. One thing I think this recession that we’re heading into, do you think that might impact the timing?
Meredith Mahoney: Yes.
Rick Kiley: You seem to have a little bit of the pulse of some of the governance. Do you think people are looking for the revenue on the tax?
Meredith Mahoney: I 100% do. I think you’re going to see the revenue reaction more at the local level. That’s going to accelerate the appetite to legalize adult-use I think and also kind of delivery and potentially social consumption. I think at the federal level, if we get a democrat in office, that could be an easy win early. That would be more than half of the population wants it. So, it could be like an easy win to put up early.
Jeff Boedges: Certainly, would put a big dent in the deficit.
Meredith Mahoney: Yes. It’s not far off.
Rick Kiley: The only thing I’m curious about, do you think you talked about the black market in California a little bit and I think part of that is because the taxation on it is actually so high. I mean, I think part of the reason it’s so high is because, federally, those companies can’t write off any of their business expenses, too. So, there’s a lot of things there. I’m just curious as if the economic model will allow for the pricing to be priced properly so that a black market won’t undercut it. I think that’s fine.
Jeff Boedges: Can’t undercut it. Yeah.
Meredith Mahoney: Yeah. I mean, I think whoever leads up the Department of Cannabis, I don’t know if that will exist, but there is going to have to be some really smart thinking around if there is like a federal tax rate or what kind of regulations get implemented at the federal level. All those questions are going to have to be answered in a very smart way or you’re going to get into a California situation. But to your point, it’s going to remove a lot of the barriers around the administrative and business and G&A part of cannabis that are eating up a lot of time and thinking and dollars, right? So, hopefully, those dollars can go back into like providing a better price for the consumer. Yeah.
Jeff Boedges: Does that keep you awake at night though? Like, oh, crap, we just went from two markets to 50.
Meredith Mahoney: Yeah. I mean, I definitely think like our Amazon drone is going to be delivering cannabis in a year like it could happen.
Jeff Boedges: Yeah. That would definitely increase the paranoia though for a lot of people.
Meredith Mahoney: I wouldn’t say it’s like the thing I think most about but we’re building a model that is around a highly regulated category. You know what, alcohol is still highly regulated, and everyone can enter that. So, I think we have a lot going for us even in a world where it’s legal at the federal level.
Rick Kiley: Yeah. Cool. So, finally, before we go, though, especially since you said lantern shows up on the 18th page of Google, let’s tell people if they want some information about Lantern, where should they go get some information?
Meredith Mahoney: Okay. Pay Attention, everyone. We’re at LanternNow.com. Two Ns. LanternNow.com
Rick Kiley: Cool. Who owns Lantern.com?
Jeff Boedges: Coleman.
Meredith Mahoney: One that wants a lot of money for it.
Rick Kiley: That’s like can’t be reached.
Jeff Boedges: Oh, it’s one of those speculators.
Rick Kiley: Oh, man.
Meredith Mahoney: Yeah. But on a side note, Lantern.co is owned by a lovely founder in the end-of-life service business and I spoke to her recently and she’s got a really cool concept. So, you end up at Lantern.co, that’s not us but it’s a great business and please go to LanternNow.com.
Rick Kiley: That’s funny. Someone did try to get our company, Soho Experiential, and they asked us if we wanted to buy Soho.com and we asked them how much. What was the answer, Jeff?
Jeff Boedges: I don’t know. It was like $50 million or some ridiculous number.
Rick Kiley: It was $5 million. I was like no.
Meredith Mahoney: Yeah. Domain ownership and brokerage is a world that I didn’t know anything about until recently and now I do.
Jeff Boedges: Well, congrats on having LanternNow.com. I like that one.
Meredith Mahoney: Thank you.
Rick Kiley: Yeah. Very good. Meredith, thank you so much for joining us today. And we’re thrilled you’re here and I hope the business goes really well. And I look forward to using your service when you come in New York.
Meredith Mahoney: Thanks, guys, I had a blast. Yeah.
Jeff Boedges: I’m going to rent a mobile home in Massachusetts, just go up there once in a while.
Rick Kiley: Just to order?
Jeff Boedges: Just to order.
Rick Kiley: You’re going to drive Massachusetts just to order.
Jeff Boedges: I got to go through it all the time to get up to the in-laws so I’ll just try. The 60-minute delivery, I can’t beat that.
Meredith Mahoney: Going to the in-laws you might need it.
Rick Kiley: Parked in a Walmart parking lot. It’s Section A7.
Jeff Boedges: Exactly. It’s the green 77 Power Wagon with a camper top on it.
Meredith Mahoney: I’ll be calling the dispensary, “Please do not deliver to that mobile home. We will get shut down.”
Jeff Boedges: Not to these guys for sure.
Rick Kiley: All right. Thank you, Meredith. You have a great day.
Meredith Mahoney: Thank you. Appreciate it.
Jeff Boedges: Thanks, Meredith.
[END]