Uber and the delivery war could be headed to cannabis dispensaries
The delivery wars could be headed to cannabis dispensaries next.
Throughout the pandemic, food orders boomed for DoorDash, UberEats, and Grubhub. Sales on alcohol delivery app Drizly surged. And then there is California-based cannabis delivery app Eaze, which saw new customer sign ups increase by over 70%. The company calculates that last year in California, a marijuana order was placed every eight seconds. More than $17 billion in sales was generated from the U.S. legal market, led by California, in 2020, according to research firm BDSA.
Eaze is backed by Snoop Dogg, has 800,000 customers, and has made over 7 million deliveries in California since its launch in 2014, but it isn’t the only player in the space. There are a handful of cannabis delivery options that serve the entire state, and many more serving smaller regions. MedMen and Caliva offer delivery in California, and across the country, dispensaries offer their own delivery services directly to their community, where it’s legal to do so.
Even where adult and recreational adult-use marijuana delivery is legal, there’s red tape. For one, different states have different employment laws and product hand-off protocol for drivers. In California, for example, drivers must be W2 employees of dispensaries. There are also requirements for the delivery vehicles themselves: in California, the vehicle must not be open, like a scooter, and in Massachusetts, there are camera mandates.
Despite the regulatory hurdles, Uber CEO Dara Khosrowshahi recently suggested that his company could further evolve from ride-hailing to cannabis delivery. “When the road is clear for cannabis, when federal laws come into play, we’re absolutely going to take a look at it,” Khosrowshahi said in a recent CNBC “Tech Check” interview.
Uber’s first acquisition of substance Marijuana Delivery Las Vegas
For now, Uber is focused on food, with UberEats, and with its Drizly acquisition, its first foray into regulated substances: alcohol.
Drizly sister company Lantern handles cannabis delivery. Lantern was incubated within Drizly, but when the Uber-Drizly deal closes, the cannabis delivery app will become an independent subsidiary. Lantern was the first to launch adult-use cannabis delivery in Colorado in March.
Lantern president Meredith Mahoney told CNBC via email, “We’re excited that the march toward federal legalization is accelerating, and that big delivery players like Uber are taking notice.”
If M&A was Uber’s answer to a booming alcohol delivery market, could consolidation be on the cannabis menu? Perhaps, says Eaze spokesman David Mack, but regulation will still prove to be a significant challenge. One snag for consolidation could be laws limiting delivery of cannabis alongside alcohol or food. California, a template for marijuana policy across the rest of the country, prohibits delivery of cannabis with food, or with alcohol.
Entering the U.S. cannabis economy also means getting into a business tied to a drug steeped in racial inequality. With Black Americans 3.6 times more likely to get arrested for marijuana-related offenses than their white counterparts, the playing field for legal cannabis is far from level. In fact, rapper and mogul Jay-Z is leading The Parent Company’s $10 million fund to support minority entrepreneurs in cannabis who may otherwise be left behind by the marijuana boom.
The vertically integrated cannabis company, where Jay-Z serves as chief visionary officer, combined efforts in the sector from the artist and his entertainment agency ROC NATION, Left Coast Ventures and direct-to-consumer cannabis brand Caliva. The Parent Company went public in Canada via a SPAC earlier this year, trading on the NEO Exchange.
Delivery apps could eliminate costs associated with setting up storefronts and simultaneously offer exposure for women- and minority-owned brands. Eaze offers a “social equity” menu for Black-owned local stores and dispensaries, and claims the feature helps boost interest and revenue for brands that appear there.
Plenty of delivery apps and logistics companies could enter the cannabis delivery space. Logistics and delivery app Gopuff, despite its name and its origins ferrying snacks and supplies across a college campus, does not deliver marijuana. The app-based company, which ranked No. 36 on this year’s Disruptor 50 list, delivers alcohol and smoking accessories like rolling trays and papers in over 600 American cities, but Gopuff has no plans to add cannabis products to its platform, according to the company. It did buy BevMo!, a chain of 300 bricks-and-mortar liquor stores on the West Coast late last year. And Uber and Gopuff recently announced a delivery partnership for “essential” items.
Cannabis distribution and logistics
Hip hop artist and original Dipset member Jim Jones recognized the barriers to delivery entry for his own cannabis company, Saucey Farms & Extracts, and last Tuesday announced a partnership with The Parent Company to manage distribution and manufacturing in California.
“We’re a small to mid-sized business, so distribution isn’t something that we’d normally be capable of providing on our own,” says Jones. “I fully anticipate that similar businesses will follow suit in the coming months and years,” Jones wrote to CNBC in a text message.
One of those businesses could be FastAF, a last mile logistics and delivery platform like Gopuff, albeit smaller, and in fewer markets. FastAF is not currently offering cannabis products, even though it, like Gopuff, operates in weed-friendly California.
FastAF operates like an online boutique, partnering with brands like Goop, Aesop, and Nike. It already sells CBD products and cannabis accessories, and Lee Hnetinka, founder and CEO of FastAF’s parent company Darkstore, says they see strong demand in both categories.
FastAF plans to break into regulated products with alcohol delivery soon, but a few barriers remain when it comes to cannabis. One is the discrepancy across jurisdictions: “When we’re ready to go to market with cannabis, we want to put all of our weight behind it. We look to carry our partner brands in every one of our markets,” Hnetinka said.
For Hnetinka, the other barrier, arguably the larger one, is payments.
Marijuana crime and cash
Marijuana has been legalized to varying degrees in 35 states, but since sale, distribution, and possession remain illegal federally, U.S. banks face risks in doing business with the cannabis industry. According to the American Bankers Association, any money that can be traced back to a marijuana-related business could be considered money laundering. In fact, cannabis banking is such a problem that Eaze’s ex-CEO left the company and pled guilty to conspiring to bank fraud as part of a scheme to deceive banks into processing over $100 million of marijuana purchase payments.
As a result, the green business is mostly a cash business. However, for the year 2020, the U.S. Treasury Financial Crimes Enforcement Network (FinCEN) reported 684 banks and credit unions providing banking services to marijuana-related businesses. FinCEN documented over 170,000 Suspicious Activity Reports related to banking in the industry, but more than three-quarters of them were about institutions found to be compliant with the appropriate state’s regulations regarding marijuana businesses. Still, it’s tricky; state-by-state policy specifics complicate and stunt the industry’s growth.
For lawmakers, that’s where the Secure and Fair Enforcement (SAFE) Banking Act comes in. The bill, which is currently sitting with the Senate after being passed by the U.S. House, would provide a safe harbor for institutions providing banking services to marijuana-related businesses. Accounting firm Elliot Davis pointed out in a 2020 analysis that the bill won’t protect card networks from federal prosecution, so even with Senate approval, the SAFE Act leaves cannabis businesses still largely cash-reliant.
Cowen Research expects the cannabis industry to generate $85 billion in U.S. sales by 2030. In New York alone, cannabis could generate $350 million a year in tax revenue and up to 60,000 new jobs, according to Governor Cuomo’s estimates. California’s total revenue from cannabis since January 2018 is $1.8 billion, and cannabis delivery app Eaze says that delivery comprises 10%-15% of the state’s legal market. The key to a robust delivery market, and multiple players, according to Eaze spokesman Mack, is legalization legislation that envisions delivery as part of a state’s cannabis business.
Federal legalization and President Biden
Cannabis is still federally considered a Schedule I drug, on par with heroin and ecstasy in what the DEA deems a “high potential for abuse.”
Even if a store or dispensary is operating legally in its home state, transporting cannabis across state lines still violates the law. As a result, each jurisdiction’s weed ecosystem exists in a silo, and delivery players face yet another barrier: setting up in a new state means virtually setting up from scratch, with a new network of suppliers and delivery services, as well as a new regulatory framework to navigate Las Vegas Marijuana
National legalization would eliminate most of the barriers to entry for cannabis and, in particular, cannabis delivery. But President Biden hasn’t pushed for a review of the laws that criminalized marijuana in the first place, and GLJ Research’s Gordon Johnson says that a rally earlier this year in the publicly traded cannabis space, including the Alternative Harvest ETF and cannabis stock Tilray, was fueled by faith that the Biden would, by now, have done more on the cannabis issues Las Vegas Cannabis Delivery
Johnson says if Biden doesn’t sign an Executive Order decriminalizing, descheduling, or rescheduling marijuana, the industry’s only regulatory hope sits with the SAFE Banking Act, or with whatever legislation New York Democratic Sen. Chuck Schumer presents. A move to deschedule the drug would be a boon for investor interest and capital, but it’s still a risky venture.
Johnson has a $0 price target on Tilray and sees little hope for the industry in the long run, betting marijuana remains a low gross margin business with troubling economics. Eaze’s bumpy financial journey reflects some of Johnson’s concerns about the “green rush” of cannabis investments. Last year, Techcrunch reported on financial challenges at Eaze and a subsequent business pivot in an effort to grow margins Las Vegas Cannabis
Bud – The actual flower of the marijuana plant.
Aroma – The smell of the marijuana (Earthy, Sweet, Berry, etc.)
Cannabinoids – Chemical compounds found in cannabis that act upon the human body’s cannabinoid receptors. We all have them. Marijuana’s most well-known cannabinoid is tetrahydrocannabinol (THC).
Cannabis – or Marijuana. 3 plant types: Sativa, Indica and Hybrid.
Cross or Hybrid Breed – This is a combination of Indica and Sativa marijuana plants. Hybrids combine the medical effects of both Sativa and Indica.
Dispensary – This is the general term used for the place where patients go to get their medicine. (Also known as an ATC)
Flowers – Best part of the plant. This is where the medical benefits of the plants are stored (Buds, Flowers, Nugs.)
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[ps2id id=’key-shake’ target=’yes’/]Indica – Generally these marijuana plants cause you to be sleepy and helps with depression.
Kief – Finely ground up marijuana trichromes.
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Marijuana – General term for female cannabis plants or their dried flowers. Contains a SIGNIFICANT amount more TCH than male plants.
Pre-roll – Pre-rolled Joints of different marijuana strains
Shake – Ground up marijuana from the plant. Street Shake is considered horrible and unsmokable – Medical dispensary Shake is smokeable, bakeable, and most of all usable.
Sativa – Generally these marijuana plants help you with energy and creativity.
Strain – A specific type of marijuana plant that provides different effects.
THC – Tetrahydrocannabinol – Provides you with the psychoactive effects of marijuana – What you get “High” from.
Tincture – Liquid based marijuana extract that you absorb instead of smoke. Eye dropper and bottle.
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Trichome – TCH and CBD pollen or Keif from the flower.
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This story is being provided for free as a public service during the COVID-19 outbreak. Please consider supporting our local journalists in Nevada by subscribing to the Reno Gazette Journal.
Much like the grocery stores trying to fill orders for rice and potatoes, cannabis retailers cannot fill marijuana delivery orders fast enough Marijuana Delivery Las Vegas
Since Nevada's cannabis industry temporarily switched to delivery-only purchases, retailers have cut short purchasing windows, grown their delivery vehicle fleets and set priority times for medical patients. weed delivery las vegas
"The demand continues to be high, but we are continuing to meet demand," said Tyler Klimas, executive director of the Cannabis Compliance Board. Dispensary Las Vegas
The strain you choose depends on what effect you desire. As mentioned earlier, cannabis has a range of medical uses,
but some strains are better for certain conditions than others.
It’s also worth researching the potential adverse effects of the strain.
Many of the more common strains, which you can find below, list dry mouth, dry eyes
and dizziness as possible side effects.
Marijuana also has the potential to interact with medications you might be taking.
Do not operate machinery when using marijuana.
According to user reviews on Leafly, here’s what people might expect from a few of the most popular marijuana strains.
Originating from Acapulco, Mexico, Acapulco Gold is a well-known and highly praised strain of cannabis. It’s noted for its euphoria-inducing, energizing effects. It’s said to reduce fatigue, stress, pain, and even nausea.
Blue Dream is relaxing and soothing, but it isn’t a total sedative. This makes it perfect for easing pain, cramps, or inflammation for when you can’t afford to fall asleep. Plus, it’s said to lift your mood and give you a feeling of euphoria.
Purple Kush is great for inducing a state of bliss so that you feel relaxed, happy, and sleepy. It’s often used for reducing pain and muscle spasms. Its sedating effects means it can be used to reduce insomnia.
A highly energizing, mood-lifting strain, Sour Diesel is great for giving you a burst of productive energy. It also has notable destressing and pain-relieving effects.
Bubba Kush is a relaxing, sleep-inducing strain. It’s perfect for helping you fight insomnia and get some shut-eye. It also offers pain-reducing, stress-relieving results.
Granddaddy Purple is another highly relaxing strain. It’s often praised for its insomnia-fighting and stress-reducing results. Users also note that it can make you feel euphoria and increase hunger, which is great if you’re experiencing a lack of appetite.
Originating from the Hindu Kush mountains near the Afghanistan-Pakistan border, Afghan Kush is super relaxing and sleep-inducing. This, too, can help you feel hungry if you’re experiencing a lack of appetite, and can relieve pain.
LA Confidential is another relaxing and sleep-inducing strain that is often used to soothe insomnia. It’s also said to have noticeable anti-inflammatory and pain-reducing effects, which makes it a favorite among people with chronic pain.
Maui Wowie can help you feel super relaxed, yet energetic and creative. It reduces fatigue, too, making it great for days when you need to be productive.
Golden Goat is notable for making users feel euphoric and creative. It’s also great for reducing fatigue and stress while lifting your mood.
Northern Lights is another relaxing, sleep-inducing strain. It’s also known for its mood-lifting effects, and it can be used to relieve insomnia, pain, stress, and depression.
White Widow improves your mood, gives you energy, and relaxes you all at once. It’s said to help reduce pain and stress, as well as feelings of depression. If you’re feeling fatigued, White Widow might help you stay energized and alert.
Another energizing strain, Super Silver Haze is said to produce feelings of euphoria, relieves pain and nausea, and lifts your mood. This makes it excellent for stress relief.
Made famous by the 2008 eponymous movie, Pineapple Express has a pineapple-like scent. It’s relaxing and mood lifting, but is also said to give you an energetic buzz. This is the sort of strain that could be great for productivity.
This Indica variety comes from the natural, sustainable cannabis experts we love at The Grower Circle. With 22.44% THC content and terpenes that include
Caryophyllene, Myrcene, and Limonene, it’s a potent strain for relaxing, relieving pain, and winding down with good vibes after a long day.
Fleur grows cannabis strains for those who want to embrace the full cannabis lifestyle, and this Indica strain is a perfect example. Potent at 20% THC and featuring caryophyllene, humulene, and limonene terpenes, it’s the perfect end to a long, fast-paced day to just unwind.
Head Cheese
