The Priceline of Pot: WikiLeaf Offers Discounts to Marijuana Customers
Different strains of pot are displayed for sale at Medicine Man marijuana dispensary in Denver, Friday Dec. 27, 2013.
When you book a flight online, you’re unlikely to use American Airlines’s website directly. Like most money-conscious consumers, you’ll visit a price comparison site like Kayak or Expedia instead. Same goes for hotel reservations, rental cars, even consumer goods ranging from iPhone cases to toothbrushes.
Why not apply that same logic to pot?
That’s the concept behind WikiLeaf, a comparison shopping website for medical marijuana that launched Jan. 22. Created by Dan Nelson, a Seattle-based financial blogger and medical marijuana patient, the site allows medical (and soon, retail) marijuana users to locate nearby dispensaries in four states — California, Colorado, Washington and Oregon — and comparison-shop for the lowest rates on weed.
“I can step outside of my apartment and chuck a rock to three different dispensaries,” says Nelson. “But $60 will get me so many different amounts, depending on which dispensary I go to. I wanted some sort of tool that would shine a light on the best places.”
The site operates on a “reverse auction” model: Instead of consumers offering higher and higher bids to obtain a product, retailers must compete to give consumers the most bang for their buck. Visitors to the site set the price they want to pay (anywhere from $20 to $350), as well as a mile radius. The site then displays a list of dispensaries in that area, and the number of grams each location can offer for that price.
For example, within a 20-mile radius of downtown Seattle, $60 will buy anywhere between 4 and 13 grams of a given strain, depending on the dispensary.
A separate page provides information about popular strains of marijuana, stats for THC content and potency, and lists the most common medical uses. (Afghan Kush, for instance, is best used at night and can treat pain, insomnia and anxiety.)
“Any dispensary will have between 10 and 15 strains available and they group those based on price,” Nelson explains. “Sometimes dispensaries want to liquidate inventory, so they are extremely willing to drop the price. This is a perfect outlet for them to come off looking really competitive.”
According to Nelson, the WikiLeaf model is simply taking the cannabis market to its inevitable, consumer-driven conclusion, albeit a little sooner than expected.
“Most mature industries shift to a price-comparison model eventually: airlines, hotels, insurance,” he says. “Marijuana is still in its infancy, but I thought I might as well start the price comparison now, because someone’s going to do it eventually.”
On WikiLeaf, consumers set the dollar amount they’re willing to spend and provide a mile radius. The site then displays the best price-per-gram offers from marijuana dispensaries in their area.
Indeed, the cannabis industry is quickly maturing as it captures the interest of entrepreneurs and investors. The result is a consumer-driven market offering a breadth of choice: luxe brands of cannabis-infused sodas, chocolate bars and skin creams, high-tech smoking accessories, and websites and mobile apps geared exclusively toward pot smokers.
One of the more established digital enterprises in the space is Leafly, a sort of Yelp for the cannabis industry, which locates marijuana dispensaries and provides news and reviews on popular marijuana strains. It’s the flagship investment of Privateer Holdings, a private equity firm focusing exclusively on the cannabis industry.
Christian Groh, Privateer’s cofounder and COO, is confident the market will continue to expand as marijuana laws change and the concept of purchasing and smoking pot loses its taboo. He and his cofounders were eager to get in on the ground floor. (Privateer does not have any stake in WikiLeaf.)
“A year ago, if you went to a dispensary, 90% of the product sold would be dried flower,” he says, “You go to a dispensary today, it’s being replaced with edibles and consumables and waxes and oils. It takes away the stigma. That B-reel of someone smoking a joint in a park is replaced with a nicely branded bottle of cola that happens to be cannabis-infused , or a nicely designed cannabis-infused chocolate bar.”
Privateer has seized upon the fact that the marijuana business is an industry with immense potential for financial growth, but one that traditional investors are hesitant to touch and that banks are inclined to ignore all together.
“It’s a $40 to 50 billion industry in the U.S. alone,” says Groh. “Internationally, it’s north of $200 billion. The economics are already there. The problem is, there’s a black market, a gray market and a medical market, and it’s a matter of trying to get those dollars to a legitimized industry.”
The site displays information about particular strains of pot, including THC levels, medical uses and recommended time of use.
One of many challenges the cannabis industry faces as it moves forward is the problem of advertising. For now, marijuana businesses are prohibited from placing ads on major sites like Google and Twitter. Some of the larger dispensary-locating websites, such as WeedMaps, can therefore charge dispensaries inflated fees to appear on their maps.
In contrast, dispensaries listing on WikiLeaf can create accounts and update their price-per-gram offers for free. In the next few months, Nelson intends to roll out a sponsored advertising program, where dispensaries can pay to have their offers featured more prominently on the site. Nelson also plans to build mobile apps for iPhone and Android.
Meanwhile, WikiLeaf’s members number more than 900 dispensaries, and Nelson says the site has been adding between 5 and 10 new dispensaries each day.
By most accounts, Big Marijuana is inevitable (and to some, undesirable). But if the success of Leafly — which now brings in around $200,000 in monthly revenue, according to Groh — is any indication, WikiLeaf is taking root in extremely fertile soil.
A new website called WikiLeaf partners with medical marijuana dispensaries to offer smokers steep discounts on pot strains.