How Reefer's cannabis loyalty platform is a game changer for marijuana dispensaries

Written by John Siegel
Published on Mar. 23, 2017
How Reefer's cannabis loyalty platform is a game changer for marijuana dispensaries

With all the buzz surrounding Prop 64, it’s easy to forget that medical marijuana dispensaries have been operating in California for years. While cannabis enthusiasts count down the days until they can use marijuana recreationally, local businesses are still struggling to gain a foothold in a growing industry.

Reefer, a startup founded by three USC students, has developed a customer loyalty platform designed to help these businesses. 

Originally conceived as a project for one of his classes, Co-Founder and CEO Brian Zatulove started researching the pain points dispensaries encountered. After working with a number of local dispensaries and surveying customers, Zatulove and his two co-founders, Zach Wise and Jordan Wise, were able to identify churn as one of the major problems companies were facing.

“We noticed pretty early on that patients were really disloyal, and that's because of the standard that had been set in the industry,” said Co-Founder and CEO Brian Zatulove. “Dispensaries give out first-time patient deals, which actually do more harm than good. They destroy their margins and also leads to a disloyal customer base, because they're incentivized to visit other dispensaries, rather than just the one that they're used to going to.”

The platform acts like other consumer rewards applications implemented by stores like Macy’s, Best Buy or even Sharky's Woodfired Mexican Grill. After a customer makes a purchase, they input their information on a tablet and receive a text message prompting them to finish their registration. After registering, they can earn rewards for their purchases and even earn points for referring friends, something the team has found to be the platform’s strongest asset.

“We found that the average customer has five or more friends with a medical marijuana card," Zatulove said. "So we're not just focused on increasing loyalty on a customer-by-customer basis, we want to increase the loyalty amongst their group of friends as well.” 

With Prop 64 set to go into effect in California in 2018, Reefer is bracing for a flood of new business. Though he said he doesn’t expect to see a new crop of dispensaries opening overnight, Zatulove said he’s excited about the opportunity to reach more dispensaries and more consumers.

“Marijuana dispensaries are extremely unique, so we expect new consumers to visit multiple locations to start to understand the market,” he said. “As the competition increases, the need for marketing solutions does as well.”

Currently, Reefer is enrolled in the USC Incubator program. To date, they have raised $100,000 in pre-seed funding from LA-based Sidebench and other local investors, and Zatulove said he anticipates the company will begin raising additional funds in the upcoming months.  

With a team of seven employees boasting experience from Amazon, Morgan Stanley and Salesforce, the opportunity to be a first-mover in the cannabis tech industry is something that excites the co-founders. 

"This is a really unique opportunity because we're one of the few tech companies in the marijuana space," he said. "A lot of our action at the moment will dictate the future of the industry, which is really exciting."

Images via Reefer and Shutterstock.

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