last year, Rose fly partnership with Uber Eats offers cannabis delivery Directly to customers’ homes in Canada. This collaboration marks a significant milestone as it was the first time that cannabis has been delivered on a leading third-party delivery platform.
In the Benzinga Cannabis Capital Conference in Miami Beach On Tuesday, Ryan MacIsaac, an attorney at Uber Technologies Inc. (Uber), and Yoko Miyashita, CEO of Leafly Holdings Inc (LFLY), shared some of their experiences.
According to Miyashita, the primary hurdle for a company like Leafly is customer acquisition. It’s not just about convincing those who haven’t used cannabis before to try it, it’s also about finding ways to convert clients who operate in the illegal market into the legal one.
Since most consumers prefer to shop on their mobile devices, Leafly’s collaboration with Uber has enabled the company to reach its target audience where they’ve already shopped. This made buying products as convenient as possible for customers.
The rationale behind Uber’s venture into the cannabis industry may not be obvious to a company of its size, but according to McKizack, it’s a natural extension of the Uber platform. The platform allows users to order anything delivered from anywhere, so offering cannabis delivery came naturally.
Leafly’s experience in Canadian retail and understanding of the regulatory environment make it an excellent partner for Uber. And Uber’s big data resources are the valuable assets they brought to the table in collaboration with Leafly.
A positive start to a long-term partnership
Leafly’s Miyashita expressed her excitement about the partnership. She stated that by combining Uber’s delivery expertise with consumer demand and Leafly’s knowledge of cannabis selection and the science behind it, there are many possibilities for growth and success.
Uber and Leafly have been partners for about six months. Executives from both companies expressed excitement about their collaboration and the possibilities for the future. They also mentioned that they encountered some unexpected developments along the way.
During her speech at the Benzinga Cannabis Conference, Leafly’s CEO expressed her amazement at how hard it is to explain the intricacies of cannabis to those unfamiliar with it. MacIsaac agreed with Miyashita’s observation, stating that it would be unwise to assume that everyone has prior knowledge of the cannabis industry.
However, he was pleasantly surprised by how open and receptive the sector was to Uber. Looking at the audience, MacIsaac appreciated the warm and welcoming nature of the cannabis community. He said the cannabis industry is a very inclusive and supportive community and culture, and it’s been a great experience.
Leafly and Uber’s prospects depend on how the regulatory framework evolves in various countries around the world. However, companies are embracing the challenge and remaining positive about the opportunities that lie ahead.
The origin of the Leafy-Uber partnership
In October 2022, the food delivery platform owned by US tech giant Uber Technologies Inc. announced a collaboration with the online cannabis market Leafly. The partnership includes processing cannabis orders for retailers such as Minerva Cannabis, Hidden Leaf Cannabis and Shivaa’s Rose.
This partnership will be Uber’s first project to facilitate the delivery of cannabis anywhere in the world. Customers 19 years of age or older can place orders through the Uber Eats app. Orders will be received and processed by stores using the Leafly software. The retailers will then send employees certified under the CannSell Ontario program to deliver customer orders. Customers age and sobriety will be checked upon delivery.
Uber introduced the partnership as a way to combat The illegal cannabis market, which marijuana producers have accused of impeding their sales. While the Leafly collaboration marks Uber’s first venture into facilitating cannabis delivery, the company isn’t entirely familiar with the marijuana industry. Uber Eats users were able to order cannabis products exclusively from Tokyo Smoke stores. However, unlike the new Leafly deal, the partnership did not allow for delivery.
Uber’s decision to enable cannabis delivery coincides with the company’s diversification strategy beyond restaurant deliveries. Uber has also flown items for fashion and home goods and personal care retailers, including Dollarama Inc. and Indigo Books & Music and Body Shop. Moreover, the transportation services giant has ventured into the highly competitive grocery delivery market.
Founded in 2010, Leafly operates an online marketplace where customers can browse and purchase cannabis products from legal retailers. The company also serves as an educational resource for cannabis enthusiasts. Its revenue stream is largely dependent on the monthly subscription fees that cannabis retailers pay to list their products on the platform and access Leafly’s e-commerce tools.
Earlier last year, Leafly went public through a SPAC deal. In the second quarter, the company reported revenue of $12.1 million, an increase of 13.8% over the prior year’s revenue. However, the company saw its average monthly active users drop 28% to 7.9 million year-over-year, and decline 3% in total retail accounts from the first quarter.
Leafly attributed the decline to challenges in less mature markets and signs that customers are being more conservative with their ad spending. As a result, the company lowered its full-year revenue forecast.
The partnership between Uber and Leafly marks an exciting new chapter in the cannabis industry, as two major players team up to address the challenges of legalizing and regulating marijuana. Uber’s entry into the cannabis industry may have surprised some, but it’s a logical expansion of its technology, which allows users to buy almost anything for delivery.
The partnership between Leafly and Uber allows the company to grow its customers and enter new territories. Leafly could make it easier than ever for customers to purchase cannabis items on legal markets and areas where the black market still thrives by leveraging Uber’s vast user base.
Undoubtedly, there will be challenges along the way, such as navigating the complex legal environment and figuring out how to convince a larger audience of the advantages and disadvantages of cannabis. But both Uber and Leafly seem to be up to the challenge, and their shared view of the future of the cannabis industry is encouraging and fascinating.