What you need to know

• For a medicinal cannabis health provider like Alternaleaf, building trust with patients through great customer experience is essential. Which is why the choice of Stripe and Shopify was a no-brainer. But then the lawyers got involved.
• Both companies had strict rules around the kinds of medical drugs Alternaleaf was helping to distribute - it puts doctors and patients together - and facilitates the distribution of medical cannabis. 
• Shopify was given 48-hours' notice to knock Alternaleaf off its platform.
• Cue almost 18 months of negotiation, but thanks to what Alternaleaf CTO Myles Lawlor calls goodwill on all sides, the solution eventually emerged.
• But not before the business had invested considerable resources on software development to operate in the interim.

Australia first legalised the cultivation of cannabis for medicinal and scientific purposes in 2016 with the first licences issued a year later. Initially, patients could access medicinal cannabis products through the Special Access Scheme (SAS) and Authorised Prescriber Scheme (APS), though access was initially limited and highly regulated.

Demand increased and as more doctors became authorised prescribers, the government streamlined access to medicinal cannabis, allowing more patients to receive prescriptions.

The growing demand also led to the rise of businesses such as Alternaleaf, which operates as online clinic, offering medical consultations and access to medicinal cannabis products. It is a subsidiary of Montu Group, a prominent player in the medicinal cannabis market

It’s hard enough to launch a business into an established market, let alone one with restrictive regulations such as the medicines market. That’s something Myles Lawlor, GM of Technology & Product at Montu & Alternaleaf understands well, having had to overcome hurdles helping the business to establish a seamless ecommerce experience for their patients.

But it wasn’t bureaucrats who caused delays. Instead, it was large ecommerce payment and platform providers like Stripe and Shopify whose own rules hadn’t kept up with regulation.

The first Lawlor knew about was when a lawyer's letter arrived on his desk.

Crisis management

When he joined the company in January 2023, Lawlor quickly recognised the need for a reliable ecommerce platform to enhance patient experience. That meant creating a trustworthy checkout process for patients, who are often navigating sensitive health issues. And that had to be done in such a way that it adhered to the regulatory complexities surrounding medical cannabis transactions.

Initially, Alternaleaf opted for Shopify as its ecommerce solution. Lawlor was familiar with the platform, having worked with Shopify during his stint at YouFoodz.

"Youfoodz was one of the largest ShopifyPlus customers in the world," he said. "When I came into this business, it certainly was a component part of the business, which was very ecommerce focused. From a transactional point of view, for this type of business where there are new types of medications - and you're a virtual business - you need to build trust with patients. Not only do we want to look trustworthy, but we have to be trustworthy, everything from our security systems all the way through our transactional systems.

"So for me bringing in something like Shopify was super important. Everyone is familiar with their checkout. I joined on a Monday and I called them Monday morning."

However, Lawlor soon learned the platform was not equipped to handle the unique requirements of medical cannabis transactions, particularly concerning the storage of sensitive patient data.

"They told us they couldn’t deal with us because holding medical patient data on their platform had never been done before," he said. Moreover, Alternaleaf's partnership with Stripe, which provided payment infrastructure for Shopify, was also fraught with challenges.

Alternaleaf already had a relationship with Stripe prior to Lawlor joining, but no problems had been raised. That changed as the business started to scale.

"We were dealing with Stripe for a while, but we reached a size where Stripe kind of flagged us."

The issue actually originated with credit card companies. "Because of the way the credit card providers are unable to transact for some of these control subsidies at a global level,  they told Stripe, you've got 48 hours to get these guys off the platform," Lawlor explained. 

"Thankfully now we had a great relationship with our local banking partner, so we were able to set up some commerce solutions with them."

Alternaleaf's leadership was determined to overcome these challenges. The company embarked on a year-and-a-half-long journey of negotiations and technical restructuring.

"We went through a process for a year and a half of us explaining who you were as a business to Shopify and to Stripe. It was a year and a half of us trying to figure out an architecture which dislocated patient data away from the commerce components," said Lawlor.

The solution ultimately involved Alternatleaf obfuscating the patient away from the transactional component. "We spent a year kind of trying to figure out data architecture."

It helped though that Stripe was willing to do the hard yards to make the deal work, Lawlor said. "Stripe had to basically create an Alternaleaf clause within Stripe to be able to deal with us."

Ultimately, Stripe brought on-board a local banking partner who could deal with Alternaleaf from a risk management perspective.

"It was an uphill battle, but now we are only a few weeks away from switching on the payments component," said Lawlor.

The experience has made Alternaleaf something of a pioneer.  "We've laid the foundation for a lot of the industry that's going to utilise these mechanisms."

Seamless experience

As of now, Alternaleaf is on the verge of launching its enhanced payment processing capabilities, which Lawlor believed would not only bolster patient trust but also improve overall business operations. "The seamless checkout experience will give patients confidence in our services."

Despite the early hiccup, he had praise for both Shopify and Stripe "The great about Shopify and Stripe was they understood what the business ultimately was trying to do. They understood that this was not only our business, but the sizable industry. And it's only going to grow from here and they wanted to be able to facilitate these sort of transactions for these types of industries."

As the new system comes online and develops it promises to spare Alternaleaf significant development resources. When the legal problem first emerged, the option of waiting for the solution simply wasn't available.

"The development resources just keep us going has been absolutely incredible. We had to build scalable systems.  We're dealing with 1000s of patients on a weekly basis, so the idea of just hanging on and waiting for Shopify wasn't going to work," Lawlor said. "We spent significant resources, just being able to service our customers."

Luckily for Montu Group it has an award-winning development team, and late last year it became the first business to win Deloitte’s Technology Fast 50 awards TWO years in a row (previous award winners include Atlassian and Afterpay.)

Ultimately the solution to the payments issue is a win not just for Alternaleaf but also for its customers, Lawlor believed.

"It's a trustworthy checkout experience, and very seamless. These patients are already dealing with enough challenges, without them having to work out if we are legitimate."

Data governance

Of course, given the nature of the business, it's not simply ecommerce data that needs careful attention.

Lawlor's colleague Fran van Heerden, Head of Data & Analytics at Montu and Alternaleaf told MI3, "There are definitely challenges in terms of managing patient data compared to traditional kind of ecommerce data. If you're purely talking about analytics capabilities, ecommerce analysis uses more aggregated data formats.

"However, the metrics and measurement individual patient-level data so practitioners can help patients, as well as and optimise the business."

There also needs to be strong governance around who can see the data, when, and why. "For example, it's appropriate for a doctor to have access to medical notes. It's not appropriate for an analyst to have access to medical notes. We need to make sure that we kind of have the right level of governance," van Heerden added.