Nugg, a telemedicine service that helps people obtain a medical-marijuana card, is launching a platform in New York that will enable patients to order from various dispensaries for home delivery.
Starting July 18, getnugg.com will begin listing the medical marijuana purveyors along with menus of their offerings. The dispensaries will perform the actual deliveries to approved marijuana users and will require either a minimum order or a delivery fee. The Department of Health allows dispensaries to handle only cannabis products.
Nugg runs a similar marketplace operation in California. Its extensive listings, accessible through a mobile app, feature product photos, prices and reviews of dispensaries. Nugg takes a slice of revenue from each order, similar to the business model of Grubhub, the restaurant delivery platform.
The Los Angeles–based company, which set up shop in New York a little more than a year ago, expects to have enough local dispensaries on its marketplace platform to provide coverage across the five boroughs within a month of the service’s launch.
“The delivery is going to be a bit of a challenge, so we’re working with our partners to figure out exactly where it makes the most sense to get started,” Nugg co-founder Alex Milligan said. “Ultimately we expect to be able to cover every part of the metro area.”
The company is expanding in New York just as conditions are changing in its home state. Under California’s old program, which required only a brief phone call with a doctor, Nugg provided medical cards to some 200,000 patients through its NuggMD service, which grew out of a delivery marketplace the company launched in L.A. in 2015.
But ever since legal recreational use rolled out in California early this year, the medical market has plummeted, said Tom Adams, a managing director of cannabis research firm BDS Analytics.
“The regulations that were put in place for medical patients and the retailers were so onerous that the market is just evaporating,” he said.
Other experts say the market has merely shifted to recreational use, but either way, the new regulations have created uncertainty for medical industry players.
Nugg—which Milligan insisted is still doing well in California—saw an opening in New York, where few doctors are qualified to approve cannabis use. The company has built up a network of 20 to 30 certified practitioners, who conduct interviews via video chat after viewing downloaded records that show that the patients meet the state’s strict requirements for treatment.
To Read The Rest Of This Article By Matthew Flamm on CRAIN’S New York Business
Published: July 18, 2018