Order weed from Leafly and have it delivered by Uber?

Last year, Leafly partnered with Uber Eats to offer cannabis delivery directly to the home of customers in Canada. This collaboration represented a significant milestone as it marked the first time cannabis delivery had been made available on a leading third-party delivery platform.

At the Benzinga Cannabis Capital Conference in Miami Beach on Tuesday, Ryan MacIsaac, an attorney at Uber Technologies Inc (UBER), and Yoko Miyashita, the CEO of Leafly Holdings Inc (LFLY), shared some of their experiences.

According to Miyashita, the main obstacle for a company like Leafly was attracting customers. It’s not just about convincing those who have never used cannabis to give it a try, but also finding ways to bring customers who are in the illegal market to the legal market.

Since most consumers prefer to shop on their mobile devices, Leafly’s collaboration with Uber allowed the company to reach its audience where they had already shopped. This made buying products as convenient as possible for customers.

The reason for Uber’s entry into the cannabis industry may not be obvious for a company of its size, but according to MacIsaac, it’s a natural extension of Uber’s platform. The platform allows users to order delivery of anything from anywhere, so offering cannabis delivery was a natural solution.

Leafly’s Canadian retail experience and understanding of the regulatory environment made her an excellent partner for Uber. And Uber’s vast data resources are the valuable asset they’ve brought to the table in partnership with Leafly.

A positive start to a long-term partnership

Leafly’s Miyashita expressed her excitement about the partnership. She explained that by combining Uber’s expertise in supply and consumer demand with Leafly’s knowledge of cannabis selection and the science behind it, there are many opportunities for growth and success.

Uber and Leafly have been partners for about six months. Executives from both companies expressed excitement about the 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 surprise at the difficulty of explaining the intricacies of cannabis to those unfamiliar with it. MacIsaac agreed with Miyashita’s observation, stating that it is unwise to assume that everyone has prior knowledge of the cannabis industry.

However, he was pleasantly surprised by the industry’s openness and acceptance of Uber. Looking at the audience, MacIsaac expressed his appreciation for the warm and welcoming nature of the cannabis community. He said 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 environment develops in different countries around the world. Nonetheless, companies are embracing the challenge and optimistic about the opportunities that lie ahead.

Origin of the Leafy-Uber partnership

In October 2022, American tech giant Uber Technologies Inc.’s grocery delivery platform announced a collaboration with 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 venture into facilitating the global delivery of cannabis. Customers 19 and older can place orders through the Uber Eats app. Orders are received and processed by stores using Leafly’s software. The retailers then send employees certified under Ontario’s CannSell program to deliver customer orders. The age and sobriety of customers will be checked upon delivery.

Uber presented the partnership as a way to combat the illegal cannabis market that licensed marijuana producers accuse of stifling their sales. While the Leafly collaboration marks Uber’s first venture into facilitating cannabis shipments, the company isn’t entirely unfamiliar with the marijuana industry. UberEats users could exclusively order cannabis products for pickup from Tokyo Smoke Stores. However, unlike the new Leafly deal, the partnership did not allow for deliveries.

Uber’s decision to enable cannabis delivery 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. Additionally, the ride-hailing giant has ventured into the highly competitive grocery delivery market.

About Leafy

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 largely depends on a monthly subscription fee paid by cannabis retailers to list their products on the platform and access Leafly’s e-commerce tools.

Early last year, Leafly went public through a SPAC deal. In the second quarter, the company reported revenue of $12.1 million, a 13.8% increase over the same period last year. However, the company saw a 28% year-over-year decline in average monthly active users to 7.9 million and a 3% decline in total retail accounts from the first quarter.

Leafly attributed the decline to challenges in less mature markets and signs that clients are being more conservative with their ad spend. As a result, the company lowered its full-year revenue guidance.

Diploma

The partnership between Uber and Leafly marks an exciting new chapter in the cannabis industry as two major players come together to address the challenges of marijuana legalization and regulation. Uber’s entry into the cannabis industry may have surprised some, but it’s a logical extension of its technology, allowing users to purchase almost anything for delivery.

The partnership between Leafly and Uber allows the company to expand its customer base and expand into new geographies. Leveraging Uber’s extensive user base, Leafly can make it easier than ever for customers to buy cannabis items in legal marketplaces and in areas where the black market is still thriving.

No doubt there will be difficulties along the way, such as navigating the complicated legal landscape and figuring out how to convince a larger audience of the pros and cons of cannabis. But Uber and Leafly both seem up to the challenge, and their shared outlook on the future of the cannabis industry is both encouraging and intriguing.

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