Marijuana delivery rival sues Eaze over credit card payments
By Nico Savidge
It’s been called the “Uber of weed,” but a competitor’s new lawsuit alleges that Eaze became the marijuana delivery giant it is today by fraudulently hiding customers’ cannabis purchases when they use credit and debit cards.
The suit filed Tuesday claims payments for cannabis delivery on Eaze are routed through phony businesses to get around credit card companies’ rules against using their services to purchase pot, making it look like customers instead bought pet supplies or outdoor gear, not joints or edibles.
The practice allows the San Francisco-based company to offer the option to pay with plastic, while other marijuana delivery firms are cash-only, giving Eaze an unfair advantage, the lawsuit alleges.
Herban Industries — a subsidiary of the Canadian cannabis firm DionyMed, which runs the delivery service Chill — filed the civil lawsuit in San Francisco County Superior Court, claiming Eaze’s actions violate California’s unfair competition law and amount to criminal fraud.
Eaze rejected those allegations and said individual cannabis dispensaries, not Eaze itself, are responsible for handling customers’ payments. Spokeswoman Elizabeth Ashford said the lawsuit was an attempt by DionyMed “to gain an advantage through litigation, prop up their failing stock price and publicize their new delivery platform.”
“The allegations are false and their attempts to hide their true motives are obvious,” Ashford added.
Although California’s recreational marijuana market has been open for a year and a half, many banks and credit card companies don’t allow their services to be used for cannabis because the drug is still illegal under federal law — meaning many delivery service customers and those at dispensaries have to pay with cash. But Eaze gives its customers the option to pay using a Visa card.
Herban Industries says Eaze can only do that by committing fraud.