Last year, Leafly partnered with Uber Eats to offer cannabis delivery directly to customers’ homes in Canada. This collaboration marked a significant milestone as it was the first time cannabis delivery was made available on a leading third-party delivery platform.
At the Benzinga Cannabis Capital Conference in Miami Beach on Tuesday, Ryan MacIsaac, a lawyer at Uber Technologies Inc (UBER), and Yoko Miyashita, the CEO of Leafly Holdings Inc (LFLY), shared some of their experiences.
According to Miyashita, the primary obstacle for a company like Leafly has been acquiring customers. It’s not only a matter of persuading those who haven’t used cannabis before to try it, but also of finding ways to convert customers who operate in the illegal market to the legal market.
Since most consumers prefer shopping on their mobile devices, Leafly’s collaboration with Uber enabled the company to reach its target audience where they had already shopped. This made purchasing products as convenient as possible for customers.
The rationale behind Uber’s venture into the cannabis industry may not be apparent for a company of its size, but according to MacIsaac, it’s a natural extension of Uber’s platform. The platform enables users to order delivery of anything from anywhere, so offering cannabis delivery was a natural fit.
Leafly’s experience in the Canadian retail space and understanding of the regulatory environment made them an excellent partner for Uber. And Uber’s vast data resources are the valuable asset they brought to the table in collaboration with Leafly.
A Positive Start to a Long-term Partnership
Miyashita from Leafly expressed her excitement about the partnership. She stated that by combining Uber’s expertise in delivery and consumer demand with 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 approximately six months. The executives from both companies expressed enthusiasm 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, the CEO of Leafly expressed her surprise at the difficulty of explaining the intricacies of cannabis to those who are not familiar 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 accepting the sector has been towards Uber. Looking at the audience, MacIsaac expressed his appreciation for the warm and welcoming nature of the cannabis community. He said that the cannabis industry is a very inclusive and supportive society and culture, and it has been a fantastic experience.
The prospects for Leafly and Uber depend on how the regulatory framework develops in different countries worldwide. Nonetheless, the companies are embracing the challenge and staying positive about the opportunities that lie ahead.
Origin of the Leafy-Uber Partnership
In October 2022, the food delivery platform owned by the American technology giant Uber Technologies Inc. unveiled a collaboration with the online cannabis marketplace Leafly. The partnership entails processing cannabis orders for retailers such as Minerva Cannabis, Hidden Leaf Cannabis, and Shivaa’s Rose.
This partnership will be Uber’s first venture into facilitating the delivery of cannabis anywhere globally. Customers 19 years or older can place orders through the Uber Eats app. The orders will be received and processed by stores using Leafly’s software. The retailers will then dispatch employees certified under Ontario’s CannSell program to deliver customer orders. The age and sobriety of the customers will be verified upon delivery.
Uber presented the partnership as a means of combating the illegal cannabis market, which licensed marijuana producers have accused of hindering their sales. While the Leafly collaboration marks Uber’s first venture into facilitating cannabis deliveries, the company is not entirely unfamiliar with the marijuana industry. UberEats users have been able to order cannabis products for pickup exclusively from Tokyo Smoke stores. Nonetheless, unlike the new Leafly deal, the partnership did not permit deliveries.
Uber’s decision to enable cannabis deliveries coincides with the company’s diversification strategy beyond restaurant deliveries. Uber has also transported items for fashion, home goods, and personal care retailers, including Dollarama Inc., Indigo Books & Music, and the Body Shop. Furthermore, the ride-hailing giant has ventured into the highly competitive grocery delivery market.
Leafly, established in 2010, 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 largely depends on a monthly subscription fee paid by cannabis retailers for listing their products on the platform and accessing Leafly’s e-commerce tools.
Earlier last year, Leafly went public through a SPAC deal. In Q2, the company reported revenue of $12.1 million, a 13.8% increase from the previous year’s revenue. However, the company experienced a 28% decrease in average monthly active users to 7.9 million compared to the previous year and a 3% drop in total retail accounts from Q1.
Leafly attributed the decline to challenges in less mature markets and signs that customers are more conservative with their ad spending. As a result, the company has lowered its full-year revenue projections.
The partnership between Uber and Leafly marks an exciting new chapter in the cannabis industry, as two major players team up to tackle 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, enabling users to purchase almost anything for delivery.
The partnership between Leafly and Uber allows the company to grow its clientele and enter new regions. Leafly can make it simpler than ever for customers to buy cannabis items in legal marketplaces and areas where the black market is still thriving by utilizing Uber’s extensive user base.
Undoubtedly, there will be difficulties along the way, such as navigating the complicated legal environment and figuring out how to convince a larger audience of the advantages and disadvantages of cannabis. But Uber and Leafly both seem up to the challenge, and their shared outlook on the cannabis industry’s future is encouraging and fascinating. (Full Story)