Ross Lipson arrived in Bend at the tail-end of an aimless romp across the Pacific Northwest. It was 2011, he was in his mid-twenties, and had just sold the online food ordering business he’d cofounded for around $30 million.
His days were spent snowboarding, drifting from one mountain to the next, until he landed at Mount Bachelor and fell in love with the Central Oregon city.
Lipson’s timing was impeccable: On October 1, 2015, Oregon became one of the first states to legally sell recreational marijuana to anyone 21 and older. While waiting in line alongside scores of other people just to buy a little weed that day, he had an idea: what if you could simply order it online?
The model would be similar to his former online food business, only this time people would be requesting buds rather than fries. Lipson mentioned the new business idea to his brother Zach, and in 2017, after a few years in development, the brothers launched Dutchie, a software platform that allows customers to order cannabis online. It’s now the rarest of things, an Oregon-based so-called “unicorn,” which means a privately-owned tech start-up with a value of over $1 billion.
Early investors include the likes of rapper Snoop Dogg, basketball player Kevin Durant, and Starbucks CEO Howard Schultz; among others, they’ve poured in millions of dollars to help finance the company. Still headquartered in Bend, Dutchie now works with over 5,000 dispensaries across the United States and Canada and has around 600 employees who work remotely from various locales.
“We currently process roughly $14 billion a year in cannabis transactions. It's been a fun and wild ride in the last four and a half years. We've grown up pretty quickly, but it’s fun to say that we feel like we haven't scratched the surface and we have a really long way to go,” says Lipson.
The company takes its name from the 1982 song “Pass the Dutchie” by British-Jamaican band Musical Youth. Its well-chronicled goal: To become as ubiquitous for online pot shopping as Shopify and Square are for online ordering of everything from clothes to food. Profiled in publications such as Forbes and The Wall Street Journal, Dutchie has raked in its fair share of national attention.
The national notice and the unicorn status are well-deserved and something of an anomaly for Oregon—with a little right-place-right-time luck thrown in too, says Rick Turoczy, the co-founder and manager of the Portland Incubator Experiment, which helps start-ups get off the ground.
Dispensaries can purchase a monthly subscription of Dutchie’s software products, which according to Lipson, focus on point-of-sale, e-commerce, and payments. And while the payment transactions for cannabis are still mainly conducted via cash due to federal restrictions, the company has recently rolled out its own payment scheme called Dutchie Pay. “Dutchie Pay is a closed loop ACH [Automated Clearing House] solution. It's the first fully compliant and very safe payment solution that’s fully integrated into the cannabis space,” Lipson says.
Cannabis is a growth market: In Oregon, pot sales were up 6.5 percent in 2021, and with new rules passed by the Oregon Liquor and Cannabis Commission on December 28, 2021, customers can now purchase two ounces of weed in a single transaction, double the previous limit.
However, the industry is still in its infancy. Weed is illegal at the federal level, so selling and delivering cannabis remains untouched by other online shopping giants like Square or PayPal, which has conveniently provided a window for Dutchie to experiment and keep building its cannabis ordering platform—for 2022, the company has allotted over $100 million towards research and development.
At the moment, recreational marijuana is legal in 18 states and all of Canada. If Congressman Earl Blumenauer, D-Portland, has his way, the other 32 states will soon follow suit. A proponent of federally legalizing marijuana, Blumenauer strongly supports the SAFE Banking Act, which means cannabis businesses would no longer be limited to operating on a strictly cash basis—theoretically, paving the way for Shopify and other online shopping behemoths to move into Dutchie’s territory.
Lipson says he’s not afraid of the competition that federal legalization would bring: “We would love that. Our mission is to create safe and easy access for cannabis, and we don't need to do it all ourselves.”