Logistics Trust Seeks $5 Million for Doobster Development


On Sept. 30, 2015, Logistics Trust Inc. issued a private placement memorandum, seeking up to $5 million in equity investment from accredited investors under SEC Regulation D Rule 503(c). The funds are to be used for further marketing and development of its Doobster on-demand mobile platform, which it touts as a multi-purpose cannabis ordering and logistics app.

As of Nov. 7, 2015, according to Darryl K. Henderson, J.D., Chief Operations Officer and Legal Counsel, the company has 12 licensees in Colorado, California, New York and Washington, D.C., and looks forward to developing license relationships in Nevada, Oregon and other states in the Midwest and East Coast.


It’s Not Just Delivery

In correspondence with MJINews, Scott Abadjian, founder and Chief Executive Officer, took care to stress that Doobster is more than a delivery app,

Not only does the app enable consumers to order products from their mobile devices for either pick up or delivery; it includes a dispensary locator and inventory menu for subscribing dispensaries. The Doobster website includes a social media feature to enable users to exchange information and opinions about cannabis products.

The full Doobster platform became operational in late August. It is HIPAA-compliant and users may register only from geographic locations within the U.S. that have legalized cannabis for medical or adult use.

In addition, as a service to dispensary clients, Doobster will pre-screen a pool of delivery drivers, conducting criminal background and other checks, to ensure that each applicant for dispensary employment is authorized to handle medical or recreational marijuana under state law.

Doobster’s licensee model is another unique aspect of its business proposition. It offers both state and district licenses of its technology. Licensees have support from internal customer support and sales teams, but are largely responsible for developing their own relationships with dispensaries, regulators and the local cannabis community.

Licensees share in revenue generated by dispensary subscriptions, per-transaction revenue and also receive an equity share in the company, the value of which will ultimately be realized when the company goes public or is acquired.

With its focus on logistics and compliance, Doobster does not grow, produce, process, distribute, or sell marijuana products, thus seeking to reduce risk to investors and licensees. It also seeks to enable wider participation in the economic benefits of an industry that can be expected to expand as support for legalization grows.

Much in the spirit of Uber or Airbnb, the secret for Doobster may be in positioning itself as a source of comprehensive disruptive technology, as opposed to simply another dispensary registry, delivery service, social media site, employment screener or patient registry.

According to Michael Watorski, Vice President of Licensing and Sales, “We’re a technology, logistics and compliance facilitation company that delivers value to multiple stakeholders in the cannabis industry.”


But It’s Not All Roses Either

Considerable competition already exists on the delivery side of the business, including Eaze and Canary. Many jurisdictions, like Washington State, severely restrict or outlaw advance ordering and marijuana delivery. In Los Angeles, Proposition D prohibits mobile businesses, even though the L.A. city attorney’s office has yet to prosecute any. Even after the passage of California’s Medical Marijuana Safety and Regulation Act, local restrictions may persist.

Also at issue is the availability of the Doobster app. Google Play has declined to list the Android version although it can be downloaded from the Doobster website. Abadjian assured MJINews that the company anticipates being able to offer the IOS version of its app through the Apple App Store in the near future. He added that the company will decide whether to list the Android version with Google Play or simply continue to allow downloads from the website.


Life on the Ground

Khalid Malik, the authorized Doobster licensee for D.C., is making the rounds. At the Nov. 5 meeting of Women Grow DC, he described the process of engaging dispensary operators and meetings with the D.C. mayor’s office and members of the City Council. “Doobster,” he told MJINews, “is committed to the community, safety, privacy and market growth.”

A technologically sophisticated product, adaptable to a number of business needs, may be able to make a compelling case. An entrepreneur-oriented business professional who is well-established in the community can be a powerful force and may provide a valuable counterweight to the usual growing pains of new marijuana businesses. “That is what we are banking on, and so far so good,” says Watorski. At two-months into its tenure, Doobster projected 18 license sales. They have 12.

Anne Wallace is a New York lawyer who writes extensively on legal and business issues. She also teaches law and business writing at the college and professional level. Anne graduated from Fordham Law School and Wellesley College.

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