On Nov. 8, California voters approved Proposition 64, which legalized recreational marijuana and made it possible for individuals to grow and sell cannabis in the state. USC students Brian Zatulove, Zach Wise, Jordan Wise and Shaun Edalati quickly seized on the opportunity, launching a startup named Reefer that acts as a marketing suite for cannabis dispensaries.
“Reefer focuses on two components: loyalty and referrals,” said Zatulove, a junior majoring in business administration. “We allow patients to earn points from their purchases and from the purchases of their friends. This essentially creates an incentivized social network around each dispensary that we are partnered with.”
Jordan Wise, a junior majoring in cinematic arts, film and television production, said that people who visit marijuana dispensaries can sign up for the service offered by Reefer. Due to the simplicity of the signup process, Reefer does not do any marketing.
“Once the patient inputs their phone number into our platform in-store, we send them a text leading them to the website, and they can complete their account from there,” Wise said. “The virality of the application does its own marketing.”
Zatulove said that his own illness built the foundations of Reefer’s business model. As a Crohn’s disease patient, Zatulove had early exposure to marijuana in a medical capacity, which helped him to understand the market. The high-tech startup class he took at USC worked as an impetus to transform his ideas into a reality. According to Zatulove, he and his team saw the potential in the fastest-growing industry in the country.
“I was diagnosed with Crohn’s disease when I was 8 years old. I was sick in high school and had to choose between prescription painkillers and marijuana,” Zatulove said. “I chose marijuana, and this gave me the industry exposure I needed to recognize the fact that dispensaries have very limited ability to market themselves or make data-based decision. Reefer solves both of these pain points.”
Reefer recently launched a beta version with 10 marijuana dispensaries around Los Angeles, and is now in the process of making small product adjustments to improve the user experience, Wise said. He eventually hopes to get a Reefer tablet in every nearby dispensary.
“The beta [version] immediately gained a lot of traction, and the patients are loving it,” Wise said. “Our product is very unique, so we are focusing on proving the model and making the virality portion of the product work as smoothly as possible.”
Reefer recently received investment funding from Sidebench Studios, a firm that builds technology solutions for larger companies such as Facebook, Sony and Red Bull. Mike Lee, a senior lecturer in the digital entrepreneurship and enterprise systems program, is an adviser for Reefer, and said he is looking forward to seeing what the company can do.
“It is always great to see students apply what they learn at USC to their new business ventures,” Lee said. “What is great about [the Reefer team] is that they have already shown traction at such an early stage with their beta customers. Their social approach to loyalty programs is a first in the rapidly expanding cannabis industry, and they have the potential to become the OpenTable of the cannabis industry.”
The national marijuana market is currently worth around $7 billion, and is expected to grow in the coming years. As a result, the Reefer team hopes to expand the company by operating in at least a quarter of Los Angeles’ several hundred dispensaries by the end of 2017. They also plan to expand nationwide within the next year.
“We are currently at the forefront of what will be, very shortly, one of the largest industries in America, and we want to be part of that growth and sort of the pioneers of an industry that will change the country,” Wise said. “Obviously, we feel accomplished to get our product out there and have people using it, but right now, we are making very small paint strokes to what could be a very large painting, and we are trying to fill in the whole canvas.”