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Thursday, Feb 2, 2023

Pot Delivery Firm Crowdfunds for Legal Defense

Hollywood startup Nestdrop has launched a fundraising campaign. But unlike most fledgling technology firms, the app-based provider of alcohol and medical marijuana delivery services isn’t trying to fund a new project or expansion plans: It’s soliciting cash to pay its legal fees.

Nestdrop hopes to raise $70,000 in donations through crowdfunding website GoFundMe. The company, founded last summer, is asking medical marijuana patients, dispensaries, delivery services and other tech firms nationwide for financial help as it appeals a preliminary injunction against its medical marijuana delivery service.

“It’s hard enough starting a business as it is without a lawsuit, and we want to use our dollars to make the best product we can,” said co-founder Michael Pycher, explaining why the firm is seeking donations.

Los Angeles City Attorney Mike Feuer filed a lawsuit against Nestdrop in early December claiming the company and its co-founders were facilitating the illegal delivery of marijuana to homes and places of business throughout Los Angeles, in conflict with the city’s Proposition D. The ordinance reduced the number of medical marijuana businesses that may operate in the city, though it exempted some existing dispensaries if they complied with certain criteria.

Nestdrop countered that it wasn’t a dispensary, collective, grower or even a delivery service, but rather a technology platform connecting patients with local dispensaries.

A judge granted a preliminary injunction to Feurer’s office, and Nestdrop has since suspended its medical marijuana delivery services, though it is still handling alcohol deliveries in Los Angeles with plans to launch that part of the business soon in Orange County.

The company filed an appeal in Los Angeles Superior Court last month and sent a letter to Feuer seeking to open a dialogue and mend their relationship. Pycher said when Nestdrop didn’t receive a reply, it decided to raise cash for legal expenses.

The city attorney’s office could not be reached immediately for comment.

“We’re going up against the city with tax payer dollars to go against us,” Pycher said. “We’re not Uber and Airbnb. We’re not as well established as those companies.”


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