Posted on 09/17/2017 7:02:45 AM PDT by Wolfie
Eaze is moving into recreational marijuana delivery with $27 million in new funding
The cannabis industry has lit up in the last year, including weed delivery startup Eaze, which just raised $27 million in Series B financing and claims a 300 percent year-over-year increase in gross sales.
But the weed delivery startup has come under scrutiny recently for burning through at least $1 million in cash per month. In contrast, other software-based pot delivery startups like Meadow have played it lean, focusing more on improving the software and logistics.
Eaze has gone hard on marketing spend, using aggressive growth tactics and burning through the $24.5 million it had previously raised in VC cash.
New CEO of the company Jim Patterson, who took over the role in December 2016 explains his approach as just part of the Silicon Valley cycle to get ahead, “We are a tech startup…we’re investing in growth,” he told TechCrunch when asked about the high burn rate. “We’re investing the money now in what’s clearly going to be a very big market.”
Part of the pop in the pot delivery industry is due to tech finally meeting the needs of the medical marijuana community in the state of California, where Eaze operates. Eaze uses its proprietary software to help consumers with a medical marijuana license in the state buy pot from local dispensaries and then delivers those purchases to their door.
However, California is set to begin issuing licenses for the cultivation and selling of the plant for recreational use at the beginning of 2018, which will open up a whole new revenue stream for Eaze and others in the space.
Colorado, a state where recreational use of the drug has been legal for a couple of years now, is reportedly pulling in nearly $100 million in pot sales per month and the marijuana industry is slated to balloon to a $24 billion dollar business by 2025.
Eaze is making the bet on high growth now to cash in on a good piece of those profits later, telling TechCrunch this was the reason for the Series B raise.
We should note that its conceivable other larger tech companies in the delivery logistics space like Amazon could just as easily decide to get into the space, crushing little startups like Meadow and Eaze in the process.
Patterson admits that’s not a far-fetched scenario but doesn’t think it will happen. “If you’re doing anything in retail and not thinking about Amazon at this point you’re crazy,” he said. “But the reality is [weed delivery] is still complicated at the federal level.”
Medical marijuana is now legal in 29 U.S. states and the District of Columbia. Laws recently passed for Arkansas, Florida and North Dakota have yet to become effective. Recreational use is legal in eight states, though, as mentioned above, certain licensing provisions don’t take effect in California until the new year.
It may not be so complicated as more states adopt marijuana legalization for both medical and recreational use in the years ahead and Patterson doesn’t count out future competition from the Everything Store.
“But I do think we have a couple of years and hopefully Eaze will be a lot bigger by then and by then maybe it will be less scary than it would be now with only 80 employees,” he told TechCrunch.
Bailey Capital led the round, with participation from DCM Ventures, Kaya Ventures and FJ Labs.
Should team up with Grubhub and 30 minutes after your pot delivery, they show up with food.
[But the weed delivery startup has come under scrutiny recently for burning through at least $1 million in cash per month.]
“Dave?!, Dave?!........Dave’s not here!”
What’s going to happen when people realize that the best pot to be had can be grown in the closet?
The last Uber eats deliveries I’ve gotten have been suspiciously low on fries.
Because if you want some weed, you probably don’t feel like going anywhere to get it!
And 5 minutes after that, you have to read a note that you ordered MJ and food.
For your interest.
First off, no, you really can't. Not the stuff these days, unless you're a dedicated horticulturist who doesn't mind investing in a halogen lighting system, among other things, and your house reeking as the buds develop. And second, you can make your own beer, too. There are stores and websites dedicated to showing you how. And it can be pretty good, too. And yet people still overwhelmingly prefer to buy it because it's just way more convenient.
There will be a run on closets?
Industrial growers in Holland and the USA are already learning that huge indoor facilities with 1000s of Gavida double ended lights which is the industry standard today make it nigh impossible to grow 30% tier weed
Which is the new benchmark of super high end
Mites and mildew is just super hard to control at that size plus it takes an army of trimmers
You can’t machine trim that high a grade ...I sure wouldn’t....you lose too much cash weight
Max factory size is maybe 100 light isolated sectors
Pot delivery is iffy to me
Most states control booze delivery for a reason
Another business opportunity born of new freedoms. I love it!
Hopefully we will live to see the day that cannabis is legal to have, produce & use in all 50 states.
One pot shop in our area does deliveries, $25 extra IIRC. Maybe drones will come into play eventually, high as a kite.
“What’s going to happen when people realize that the best pot to be had can be grown in the closet?”
that’s “legal” right now in Colorado, but doesn’t provide instant gratification: requires research, investment, and a LOT of attention sustained on a daily basis over many weeks before there’s a payoff. the great majority of potheads are incapable and/or unwilling to engage in such a demanding activity as indoor farming. it’s pretty much like making your own beer: 99% would rather just tootle on down to the local liquor store than make their own.
“The last Uber eats deliveries I’ve gotten have been suspiciously low on fries.”
ROTFLOL!
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