Selling Convenience in a Bottle: Driven Leading Public Cannabis Delivery Companies
The world today has become increasingly “on demand.” Whether it is a movie, laundry soap or food, people want what they want, and they want it delivered to their doorstep right now. A $6 billion valuation for GrubHub and Amazon growing into one of the world’s biggest companies speak clearly to macro-trends favoring the on-demand dynamic.
With cannabis legalization sweeping the nation, why would we expect anything different for this consumer product? The answer is: “We shouldn’t.” To that point, as regulators have been hammering out guidelines to ensure safety and standardization, select companies have been gaining traction with their cannabis delivery businesses as the market starts to grow.
In the U.S., Driven (OTC: RBOS), which likens itself to “GrubHub for cannabis,” is the only publicly traded cannabis delivery service. With plans to expand into Nevada, Arizona and Michigan in 2019, the company currently operates exclusively throughout its home state of California, a market where medical marijuana has been legal for about 20 years and recreational cannabis was legalized at the start of 2018. California is hands down the market stalwart, with Arcview Market Research and its partner BDS Analytics forecasting the legal cannabis market to reach $5.1 billion in the next year.
More broadly, the industry research group sees the U.S. market climbing three-fold to $23.3 billion in the five years to 2022. With the latest ballots in November, recreational marijuana is legal in 10 states and the District of Columbia, while medicinal cannabis is allowed in 33 states.
Against that backdrop, Driven CEO Chris Boudreau believes that cannabis delivery represents a $600 million opportunity for the company, according to a presentation at the annual LD Micro Conference earlier this month. A commercial banking executive by trade, Boudreau found success in his foray into cannabis a decade ago, helping to build California’s Kindest into one of the largest retail delivery cannabis companies and Sunstone Distribution into the first statewide wholesale cannabis distribution company.
Driven differentiates itself from rival Eaze through its last-mile delivery model. More specifically, Driven operates through a “Bag and Carry” model, where it can work with any and all dispensaries to deliver specific product ordered by the dispensary’s customers. Eaze utilizes a “Mobile Dispensary” model, where it works with only one dispensary in a local market, shuttling product around in a manner similar to an ice cream truck (although obviously not advertising its vehicles as such).
Driven uses a complete tracking system to ensure regulatory compliance and security. A turnkey infrastructure allows Driven to get a dispensary up and running with a delivery service in under two weeks. Now more than just a delivery service, the tech company earlier this year folded-in its own marketing and marketplace, for which it charges the dispensary a premium for initiating sales.
This has catalyzed sales since being rolled out. In May, for example, 169 deliveries were initiated by the dispensary and 22 were pushed through by Driven. During August, those figures rose to 469 and 134, respectively.
The efforts have resulted in approximately 4,500 deliveries in the last six months for Delivered.
Online Media Group, Inc. is not registered with any financial or securities regulatory authority and holds no investment licenses and does not provide, nor claims to provide, investment advice. We are a publisher of original and third party news and information. This article is sponsored content and is neither an offer nor recommendation to buy, sell or hold any security. The views expressed are our own and not intended to be the basis for any investment decision. Investing intrinsically involves substantial risk and readers are reminded to consult an investment professional and complete their own due diligence, including SEC filings, when researching any companies mentioned in this release. This release is based upon publicly available information and, while vetted, is not considered to be all-inclusive or guaranteed to be free from errors. With respect to Section 17(B) of the Securities Act of 1933 and in the interest of full disclosure, we call the reader’s attention to the fact that Online Media Group, Inc. received $1,333 in compensation from IRTH Communications for content creation, advertising and distribution services related to this material.