These days, the North American legal cannabis industry is so massive and mainstream that major companies from every corner of corporate America are doing away with past taboos in attempts to grab their piece of the green rush pie. The latest global operator to express interest in the marijuana market is rideshare giant Uber.
Uber recently purchased the alcohol delivery startup Drizly, and with the app’s independent contractors around the world already shuttling people and meals across cities, a step into the world of weed is a logical next step in Uber’s quest for delivery domination. In an interview with CNBC on April 12th, Uber CEO Dara Khosrowshahi hinted that the company could soon contract cannabis delivery drivers – but not until the plant is legal nationwide.
“What are the types of deliveries that a high percentage of consumers are going to want delivered fast into their home and are quite frequent?” Khosrowshahi said. “We think, obviously, food, grocery, pharmacy, and alcohol are part of that category… When the road is clear for cannabis when federal laws come into play, we’re absolutely going to take a look at it. But right now with grocery, with food, with alcohol, et cetera, we see so much opportunity out there and we’re going to focus on the opportunity at hand.”
Delivery has been a major aspect of the cannabis market both legally and illegally for decades, with many consumers preferring the discreet, homebound access it offers. As legalization took hold across the states though, local regulations have disrupted the once-ubiquitous mobile weed dealer, with many locations confining all cannabis sales to licensed dispensary storefronts.
So far, California and Oregon have lead the way when it comes to legal cannabis deliveries, with licensing systems that allow for easy home delivery of all marijuana products. Still, major recreational weed hotspots like Boston and Denver have yet to update their laws to include delivery, creating uneven access for patients and adult-use users alike.
Marijuana delivery picked up significantly during the last year when COVID-19 kept many people at home while most legal cannabis businesses were deemed essential. In the Golden State, tech-forward delivery platform Eaze reported massive spikes in home orders corresponding with the pandemic.
“Covid-driven consumer demand drove massive spikes in the number of new deliveries and order size,” Eaze analysts documented in the company’s annual end-of-year consumer report. “Stay-At-Home requirements and cannabis delivery’s designation as an essential service dramatically shifted the narrative about weed, moving it beyond the definition of a wellness tool into the category of an essential product.”
As that narrative continues to change, companies like Coca-Cola, leading alcohol producer AB-Inbev, and one of big tobacco’s biggest names, Altria are all investing millions of dollars into long-term plays in the marijuana space. Considering Khosrowshahi’s statement about Uber’s potential turn towards weed, there is a definite possibility that your future Uber driver will be able to drop off a THC-infused Coke and an eighth before dropping you off at your local consumption lounge. Because many new cannabis consumers were introduced to the plant through delivery last year as delivery purchases of all products spiked through the roof, analysts saw a significant shift that is likely to stick, at least in part.
“In the 30 days after March 13, new Eaze customer sign-ups jumped by nearly 60%, first-time deliveries increased by 44%, and the average size and value of every order rose by 15% and 13% respectively,” the Eaze report detailed. “March and April 2020 were the year’s highest months for new deliveries and, overall in 2020, new customer sign-ups increased by 71%, and average order volume and value rose by 15% and 20%, respectively.”
But while many states have already structured licenses to favor deep-pocketed corporate entities making their way into the green rush, state-specific delivery laws have often been designed to specifically favor social-equity applicants and focus on strict regulations designed to protect the safety of the customer, business, and delivery driver. Uber has already faced significant backlash around the globe for its independent contractor model, and it is yet to be seen if those types of businesses will be allowed or encouraged in the cannabis market.
Eaze, the app-based cannabis delivery platform which operates in California, is currently the closest thing to an Uber-like model in the legal marijuana space, but thanks to Golden State regulations, all Eaze drivers are classified as W-2 employees, unlike their independently contracted rideshare counterparts.
With the Biden White House still digging its feet in on federal legalization, though, speculations about potential regulations, labor laws, and business initiatives under a nationwide legal weed program are still just that; speculations. Still, as billions of dollars continue to circle in the cannabis industry, you can bet that America’s corporate leaders won’t stop searching for their slice of the profits – no matter what’s standing in their way.
