Rejection of Marijuana Startup at Tech Competition a Case of ‘Cannabias’?

By Tony C. Dreibus

The cannabis industry has taken great strides towards entering the mainstream business world in recent years, but it apparently still has a ways to go.

Case in point: MassRoots, a publicly traded company that runs a popular social media app for cannabis consumers, was told this week it cannot advance in a prominent competition for tech startups because its technology and user community are “not significant” enough, the company’s chief executive officer told Marijuana Business Daily.

MassRoots presented at TechCrunch’s Startup Alley competition in New York, where entrepreneurs show an audience their ideas for tech products. Voters then cast their ballots for the company they think is the best startup.

Traditionally, the top vote-getter moves on to a larger competition called Startup Battlefield, where companies vie for a $50,000 prize.

MassRoots CEO Isaac Dietrich, who applied on the TechCrunch website and was told he qualified for the event, said his company earned about 5,000 votes – more than five times the next closest competitor.

It therefore stands to reason that it should have moved on to the Battlefield event. The company, however, was told by a TechCrunch editor that it would not be given a presentation spot at the Battlefield competition, providing little explanation.

TechCrunch – which runs a popular technology website – didn’t respond to several contact attempts by Marijuana Business Daily.

But Dietrich said he believes TechCrunch dismissed MassRoots because it’s a small company that doesn’t have the backing of large funds and fully embraces the marijuana consumer culture. TechCrunch is looking for “MBAs in suits” and didn’t like how he represented the industry since he’s young, a college dropout and a cannabis consumer, Dietrich said.

While the technology industry has shown great willingness to fund and work with cannabis companies – investors from the tech industry have invested millions of dollars in marijuana ventures – TechCrunch’s denial is a sign of continued inequity against some businesses within the nascent industry, Dietrich added.

“All MassRoots was asking for was an opportunity to compete in the Startup Battlefield,” he said. “Had we lost Battlefield based on our merits, that would have been fine, but to deny us the chance to tell our story on the main stage because I’m an unabashed cannabis smoker is nothing more than thinly veiled discrimination against the cannabis community.”

TechCrunch doesn’t seem opposed to the marijuana in general, though.

Brendan Kennedy, the CEO of Privateer Holdings – a private equity firm that operates several cannabis companies – was a speaker at the conference alongside Geoff Lewis, a partner at Founders Fund, which recently invested in Privateer.

Regardless, MassRoots won the competition and should’ve been given a chance to present in front of the Battlefield panel, which this year includes notable names such as Dennis Crowley of Foursquare, Alfred Lin of Sequoia Capital and Rich Miner from Google Ventures, Dietrich said.

“Brendan and Geoff are awesome and are definitely welcome in the cannabis community, but that doesn’t give TechCrunch a pass to completely ignore the votes (we) received,” Dietrich said. “We were stoked because this was the opportunity of a lifetime. It was our chance to tell our story to every Silicon Valley executive in the room.”

Voters at the Startup Alley event expressed their displeasure through – where else – social media. Comments on TechCrunch’s Instagram account were heavily in favor of MassRoots, with some chastising event organizers for ignoring the ballot and awarding the Startup Battlefield spot to the second-place competitor.

“It is a shame that you have decided to come out on the wrong side of history here,” one user with the handle Uncle_Buck13 said on Instagram. “Your condescension and dismissal of MassRoots not only demonstrates ignorance but also a sense of hypocrisy. If your platform, and event, are designed to find companies and technologies pushing the boundaries and filling a need for technology solutions, MassRoots entirely fits that bill.”

TechCrunch editors can exercise editorial discretion, something Dietrich said he doesn’t dispute. But with such an overwhelming victory, he figured MassRoots would be allowed to compete.

Instead, the spot was given to the second place competitor, which he said earned less than 1,000 votes.

The Disrupt events, held in Las Vegas, New York, San Francisco and London this year, are designed to find “disruptors” — companies that design and build products that challenge conventional wisdom, Dietrich said. That perfectly describes MassRoots, which earlier this year fought with Apple after the company removed its app from the Apple Store, and won.

“The point of TechCrunch Disrupt is to discover companies who are pushing boundaries, creating new markets and, ultimately, changing the world,” he said. “By any objective standard, MassRoots should at least have been given the opportunity to compete.”

Tony C. Dreibus can be reached at [email protected]

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 10 Comments

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