Exclusive Interview with Dutchie Co-Founder and CEO Ross Lipson
When New Cannabis Ventures last spoke with Dutchie Co-Founder and CEO Ross Lipson in 2018, the company had less than 20 employees, and it was just about to launch in the Canadian market. In 2020, Lipson checked in to discuss how much the team has grown, the ecommerce provider’s North American market share and the company’s recent Series B. The audio of the entire conversation is available at the end of this written summary.
Team Growth at Dutchie
Team is important to Dutchie. As a part of its operating principles, it emphasizes the team over the individual. Over the past two years, Dutchie’s employee count has grown to 110 full-time workers, and the company currently has job openings across all of its departments, according to Lipson. Dutchie is continuing to recruit top talent in order to keep up with the rapid growth of the industry.
The Ecommerce Core of the Company
Since the company launched in 2017, ecommerce has remained its core focus. While Dutchie remains committed to its lane, innovation and flexibility within the ecommerce space are an important part of its strategy.
When the COVID-19 pandemic hit, cannabis dispensaries found themselves in need of a curbside pick-up solution. Dutchie rolled out a curbside arrival feature on its online ordering platform within just a couple of days to accommodate its customers.
North American Market Presence
In 2018, Dutchie was in a handful of U.S. states and just on the cusp of launching in Canada. Today, it serves 1,450 dispensaries across 25 states and Canada, accounting for approximately 25 percent of all retailers in North America, according to Lipson.
Continuing to grow that market share is a priority for the company. Thus far, it has achieved growth through organic means, but it is open to M&A opportunities in the future. The company is also open to further pursuing international expansion should the right opportunity arise.
Accelerated Adoption of Technology in Cannabis
The pandemic has accelerated the adoption of technology in the cannabis industry, as companies realize the importance of having online ordering and curbside pick-up solutions for their consumers. As an ecommerce provider, Dutchie is well-positioned to take advantage of this trend. Lipson has seen heavy adoption of contactless ordering on the retailer and consumer side in cannabis, a trend he expects will shape cannabis and many other industries.
Funding, Investors and Capital Allocation
Dutchie completed its Series B in August, raising a total of $35 million. The funding round attracted a diverse group of investors led by Thrive Capital. Other key investors include Casa Verde, Gron Ventures, Thirty Five Ventures–all three early investors in Dutchie–and entrepreneur Howard Schultz.
It is important to bring investors with unique experience and vantage points to the cap table, according to Lipson. For example, Gron Ventures and Casa Verde have extensive knowledge in the cannabis space, while Thrive Capital brings a long track record in understanding tech at scale, and Howard Schultz is a notable business leader with vision.
When considering its funding runway, the Dutchie team looks at its 18 to 24-month objectives and determines how to leverage capital to meet those goals. The company also makes an effort to ensure its goals are aligned with the goals of investors.
Following this latest capital raise, further building its team is a primary target for the company. It is aiming to attract talent from both within the cannabis industry and outside of it. Dutchie plans to double the team, reaching more than 200 employees, over the next year, according to Lipson.
While Lipson is often asked about IPO plans, Dutchie does not have any intention of going public in the near future. Down the road, Lipson will explore that option if it makes sense for the company.
At this point, Dutchie is focusing on growth over revenue. While it is eager to expand market share and add more dispensaries to its platform, the team is cognizant of the importance of reaching profitability. At this stage, the company does not have an exact target date for reaching that goal.
With market share being such a priority, dispensary count is naturally one of Dutchie’s important metrics. The leadership team also prioritizes tracking employee and customer satisfaction.
Dutchie faces all the challenges of any tech company, like ensuring smooth integrations on its platform, as well as the challenges of the cannabis industry. These obstacles create a big barrier to entry in the ecommerce space, which means Dutchie does not have many competitors, according to Lipson. The company is prepared to find opportunities in its challenges and to continue its growth trajectory.
To learn more, visit the Dutchie website. Listen to the entire interview: