Eaze Cuts Staff as CEO Steps Down

California cannabis delivery giant Eaze sent out a company memo yesterday announcing layoffs and a new CEO.

According to multiple sources, 36 staff members were let go early Wednesday, a number that represents about 20% of Eaze’s overall workforce.

The announcement was sent out Wednesday by new CEO, Rogelio Choy, who previously served as Eaze’s COO. Before his time with Eaze, Choy was CEO at file-sharing behemoth BitTorrent. He officially departed BitTorrent’s new parent company, Tron, last December, after their $126-million-dollar acquisition of BitTorrent in the summer of 2018.

Choy will be replacing former CEO Jim Patterson, who led Eaze through the company’s transition to the legal market in California after founder Keith McCarty stepped down in 2016. Patterson will remain on the board of directors.

In the statement, Choy noted that the cuts affected every department within the company and were not a reflection of the work being done by those leaving, but a need for realignment within the company. An all-hands meeting was set to take place today at noon, where Choy will update staff on the plan forward.

It’s been an action-packed month for Eaze, as their legal battle heats up with Canadian distribution platform company, DionyMed. As noted by Green Market Report, DionyMed used one of its dispensaries to claim Eaze was using shell accounts to create fraudulent charges and payment processing. DionyMed then terminated a three-year contract based on the allegation. But the problem some are seeing with that claim is Eaze doesn’t process payments in-house — it just facilitates the transaction between the consumer and dispensary.

Eaze countered in their complaint that DionyMed and its subsidiaries “have resorted to unfair business practices to harm Eaze and beg, borrow, and steal Eaze’s partners and consumers for their alternative platform.”

Eaze also pointed to the fact DionyMed has poached a number of their employees in an effort to gain a foothold in the delivery space.

Things will likely continue to heat up as the case moves forward.

At the request of our source, here is the full letter from Choy to Eaze’s employees.

Team,

By now everyone is aware that we’re undergoing significant changes in our company.

Today we had to part ways with 36 of our friends and colleagues across all teams and offices. This was an incredibly hard decision to make, and of course is enormously difficult for our departing colleagues, who are among the best and hardest working in this industry. Their departure is not a reflection of their excellent work.

These changes are because we need to realign Eaze operations to match market realities. Today’s very difficult action will best allow Eaze to continue providing our services to customers, retailers, and brand partners across California and Oregon.

Also, as of today, Jim is stepping down as CEO and I will take over the CEO title and responsibilities effective immediately. I want to thank Jim for leading us through our formative years and the dawn of legal cannabis in California.

We will gather together for an all hands meeting at noon where I will provide additional company updates, fundraising news, outline our path forward, and answer any and all questions you have.

As of today, we have completed more than 4.65 million deliveries, and there is no question Eaze has an incredibly important role in serving customers and helping build a sustainable, legal cannabis market. It is also true that our entire industry is experiencing significant and unique shocks as we continue to emerge from prohibition and convince adults to choose legal cannabis over illicit options.

The Eaze team, and our network of extraordinary retail and brand partners, have endured and overcome enormous challenges together. And we have significant challenges ahead. But we also have a tremendous amount to be proud of and we will ultimately do our best to build a world class, legal cannabis market for the people of California, Oregon, and beyond.

I want to close by thanking each and every one of you for your hard work and commitment to Eaze’s mission. I see you and appreciate you.

Ro

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