Medical marijuana ordering app Nugg launched with unusual funding source

Starting at 4:20 p.m. Monday, patients in Los Angeles and Orange counties will be able to order medical marijuana and schedule deliveries or pickups through a new app called Nugg.

The Web-based app was developed by a trio of USC students who raised $100,000 not from friends and family, the usual way to get a business started, but by referring riders to the ride-hailing service Lyft. Lyft pays a commission of $10 to $20 each for rider referrals; Alex Milligan and two friends created a network of referral hunters, mostly on college campuses, and split the proceeds earned through signing up 30,000 riders.

Last year, Milligan, Collin Mann and Kam Babazade began putting their newfound wealth toward developing Nugg, an online ordering system for medical marijuana. Mann and Babazade graduated, and Milligan is in his last semester. Their company is launching April 20 — a worldwide day of celebration for marijuana enthusiasts — by offering a free pizza with deliveries.

Nugg, which doesn’t employ drivers or process payments, isn’t blazing a new path. But the co-founders hope that their marketing expertise from the Lyft endeavor supports them in weeding out competitors like Eaze and Nestdrop.

On Nugg’s website, users can search for nearby medical marijuana dispensaries, browse their offerings and request a pickup or delivery.

Users have the option of heading to the dispensary to pick up an order made through Nugg or having it delivered by drivers who work for the dispensary.

During sign-up, users must take a photo of their driver’s license or other ID along with a doctor’s note. Nugg checks with doctors to verify the document. Those without paperwork can request a doctor’s appointment through the service.

Milligan said Nugg is still rolling through the Lyft cash but that people associated with venture capital firms have already signed on as advisers.

The challenges now are keeping pace with quickly changing regulations and making the service attractive to users who range from college students to the elderly.

“They understand cannabis in different languages, so it’s a balance between providing too little introduction and too much information that it becomes too complex,” Milligan said.

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