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Internal Dutchie Communications Shine Light on Company Struggles, Questionable Behavior

Dutchie caught the eye of many with their voracious appetite for capital and steadfast commitment to becoming the leading POS in the US cannabis industry.

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Following the precedent set at Toast – and ironically led by Toast’s former CFO, who strong armed Dutchie to his whim – Dutchie would stop at nothing on its way to the top.

A few years later, the shine is wearing off.

Down rounds mount, taking much needed wind out of Dutchie’s sails.

Product roll outs stall or outright fail, leading customers to search for alternatives.

And wave after wave of layoffs are leaving people with a very bitter taste.

Which leads us to this article.

What follows are internal company communications, showing a clear rift between management and the on-the-ground personnel.

Like Toast, Dutchie’s business model was predicated on the notion that it would make money hand over fist on payment processing.

Unlike Toast, the product that Dutchie’s customers sell – cannabis – is not federally legal, and payments processing has not been sanctioned by the duopoly of Visa and Mastercard, thus making those lucrative payment margins rather elusive.

The theory, of course, was that Dutchie would acquire market share, sit on that market share like squatters, and wait for the Boomer-Sooner frenzy when payment processing was approved.

But time marches forward, and approved payment processing feels no closer to fruition. That must engender anxiety when you’re burning tens of millions of dollars annually and staring at a dwindling bank account.

There are two themes we’ll explore in this article.

The first is Dutchie’s commitment to rolling out payment modalities that it seemingly knows are neither compliant nor robust. 

The second is Dutchie’s alleged yet convenient ignorance as it relates to cutting costs through employee termination.

Both of these matters are deserving of further legal scrutiny.

We’ll start by saying that Dutchie is between a rock and a hard place. That’s not to give excuses for Dutchie, and certainly not to say that Dutchie finds itself in its current predicament through bad luck alone, but we imagine that Dutchie didn’t foresee US cannabis legalization taking as long as it has. Otherwise, what sane party would have poured so much money into this venture?

Dutchie’s leaders were given bad advice (or even worse sought no advice because they viewed themselves as smarter than everyone else) and now they’re really stuck.

We think Dutchie’s downfall is ultimately attributable to the second of the seven deadly sins: greed.

In an effort to make money on payments and close a fat, red hole in their income statement, Dutchie has aggressively pushed the envelope on payments. Some of their ideas were actually borderline-genius (like using crypto as the currency to move funds between a cardholder and dispensary) while others were flimsy attempts to grab as much money as possible, knowing full well that the solution wasn’t viable, in essence selling their merchants down the river.

In fact, one should legitimately ask this question: Did Dutchie peddle payment solutions that will prevent their merchants from partaking in any future payment processing?

If merchants appear as repeat offenders, the card schemes (Visa, Mastercard) can forever flag the merchant as high risk and prevent them from processing on their networks.

Mastercard has their MATCH list, and you can read more about that process here.

Talk about a class action opportunity.

At any rate, the following Dutchie Slack exchanges point out a few key things:

  1. Dutchie was very explicit in telling their teams to avoid putting anything in writing regarding compliance and timelines

  2. Sales people have quotas and are thus put in an impossible position. You can see the frustration and explicit fractioning of Dutchie’s personnel over the attempted obfuscation around compliance and timelines

  3. Dutchie’s products are not cohesive (e.g. see how integrated debit doesn’t work on all their POS softwares), thanks to their many acquisitions. This should serve as a warning for people thinking that they can buy themselves into market share without the very real consequences of technical debt

Identifying information has been sanitized and irrelevant information removed.

What’s clear is that the constantly-changing product lineup makes it impossible for salespeople to meet their OTE expectations. We think it’s very important that potential applicants look at this with open eyes.

From a previous Dutchie salesperson,

My OTE was $150K. I was a top performer and I only ever made $115K. It’s an impossible treadmill to climb. We sales people would do all the work to sell a product, thinking we were meeting quota, and then the product would get completely shut down. So in theory the bookings might have made me hit my OTE, but because the product never rolled out we spent all that time selling a solution that wouldn’t count towards our compensation.How is that our fault? We do our jobs then don’t get paid for doing what we were told to do? Dutchie salesperson

To put this into an analogy, imagine someone sells you a car wash. You pull up, and the people washing the car spend considerable time setting up the water, soap, towels, you name it. 

As they’re starting to lather the car, the bubble manufacturer comes out and says “actually we are changing the bubble recipe so no more car wash.”

You spent your time going to the car wash.

The people doing the work of washing the car spent time to sell you and set everything up.

The bubble manufacturer claps everyone on the back and thanks them for showing up and working for free.


It’s even worse when you hear that the bubble manufacturer knew that the bubbles didn’t work and was telling their salespeople to push a car wash anyway.

We moved to this product at Dutchie called ReThink and it was a big initiative. I’d summarize ReThink as a text-based, integrated way to pay with a debit or credit card. In principle the budtender would go to the POS, enter the customer’s phone number, and the customer would receive a text to complete the payment.It never worked. It took weeks to go live, had to live on secondary devices since we couldn’t get things integrated, but we couldn’t tell the customer that upfront or they would have never moved forward. So our leadership told us to lie to the customer and say it took 24 hours to go-live.Dutchie salesperson

ReThink launched the month after Dutchie’s crypto experiment was shut down and was shut down by November 2023.

With the continued failings personnel had to be culled, which gets us to the second part of the story.

One of Dutchie’s payments employees was a known autistic, and despite this a top performer. This employee asserts that their condition was known in the initial hiring process, documented by HR, and that all of the employee’s colleagues knew of their condition.

After the ReThink product failed the employee was fired. 

Which is understandable when you can’t stand up a product. But what, allegedly, Dutchie did next strikes us as morally reprehensible. 

As the employee sees it, to “muster cause as a way to avoid severance”, Dutchie told the employee that they engaged in “rude communication” to Dutchie’s onboarding team, thereby providing HR the reason to terminate on grounds of behavioral misconduct. 

HR further told the employee that they were unaware of the employee’s autistic condition and reiterated that the employee was terminated for cause: discussing pay too frequently and being generally insolent.

My gripe is with how I was treated, and Dutchie’s systemic efforts to eliminate people who speak honestly. I was at Dutchie both pre and post Tim (Dutchie’s controversial CEO who seemingly screwed over Dutchie’s founders to insert himself), and Dutchie is destroying the culture one person at a time.Dutchie payments sales rep

For the record Dutchie is a right to work company, this former employee is a Florida resident, and the former employee is seeking legal representation on claims of severance and lost wages. 

Personally, we think there’s compelling evidence to suggest that Dutchie is engaged in widespread fraudulent inducement, and this former employee might have the data to prove a class case for plaintiffs under whistleblower protections. 

Regardless, it’s not a good look for Dutchie.


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