It won’t be on sale this Prime Day, but one day the CEO of cannabis delivery company Eaze thinks Amazon will be in the weed business.
“I think there’s no doubt that eventually Amazon will get into this business. The question is, is that five years, 10 years, or 20 years,” says Eaze CEO Jim Patterson. “I think it will be a bit longer for them … until there’s much more clarity at the federal level.”
With laws changing around the country, legal sales of marijuana are expected to more than double in the next five years. Venture capital has taken notice with a reported $700 million worth of investments. Eaze is one of the most highly funded cannabis startups, delivering products in major cities across California.
Patterson says the company leverages technology to create easy access. “Instead of having to go to a store, a dispensary, you can download an app, or go to our website, and you’re able to shop the products from a local dispensary, and then have those products delivered to you.”
Eaze is the backbone and the technology that makes delivery possible, but it doesn’t own the physical inventory or employ the drivers. “All of that comes from local dispensaries that we work with,” says Patterson. Patterson believes the on-demand pot delivery play can sell $1 billion a year worth of marijuana and associated products by 2020.
Delivery is appealing for cities as they struggle with zoning around cannabis. While the majority of Californians supported cannabis legalization, “a lot of them don’t actually want to live near a dispensary,” says Patterson. That’s why the last mile is a pain point. “You have this problem where the dispensaries aren’t actually located where people live. And that’s inconvenient, and it creates barriers to access for people that can’t travel far. So that’s why delivery is a really, really important,” according to Patterson.
With venture capital money flowing into the space, Eaze has well-funded competition to deal with, but for Patterson the biggest threat is the black market. “In California, still the illicit market is bigger than the legal market. Over time that will come down, but we’re just really focused on making sure that we’re going to be the one that’s the most compliant because we feel that building … a long-term, sustainable business, it’s really all about how do you do it in a compliant way.”