Driven Deliveries Archives - Green Market Report

Julie AitchesonJanuary 27, 2022

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The Covid pandemic has been impacting our economy in so many ways for such a while now that it’s hard to parse which marketplace developments are driven by a climate of uncertainty and crisis versus a myriad of other factors. Online ordering and delivery, which was already gaining ground as a popular mode of consumerism pre-pandemic, received a massive boost in popularity from the endless restrictions that Covid-19 has placed on our daily lives.

But delivery’s spiking popularity is not solely due to attempts at avoiding Covid infection. Meadow co-founder David Hua, who notes that retail cannabis deliveries went up 50% in 2021 from 2020, anticipates that the continued growth of this trend will see ongoing benefits beyond staying Covid-free. These include heightened delivery times and expanded access to a greater range of offerings for consumers, while businesses can expect to see increases in the size of their customer base and boosted sales.

A January report on delivery service trends produced by The Harris Poll for delivery management software company Onfleet found that over half of those surveyed stated that if they were going to purchase legal cannabis products, they would be much more willing to do so via delivery versus in person. The convenience factor and remaining taboos regarding cannabis use are likely factors here, but other safety concerns cannot be discounted. Christine De La Rosa, co-founder and CEO of The People’s Ecosystem, highlights the rise in instances of mob robberies at retail locations in places like California and Oregon, and predicts a commensurate rise in cannabis delivery services by small businesses “rather than face the risk to their safety, their employees’ safety, and their business safety in the current climate.”

In several parts of the U.S., however, cannabis delivery services face a number of potential legal challenges. Recreational marijuana became legal to buy in Maine almost a year and a half ago, but weed shops and dispensaries remain relatively thin on the ground in Vacationland due to a slow acceptance of the cannabis industry in some areas. To leapfrog this slow thaw, some in the Maine cannabis industry are pushing for a legal door-to-door delivery system. Direct delivery is already allowed for medical cannabis in the state, and many legal businesses owners hope recreational cannabis delivery will give them an edge in competing with illicit operations. (Due to an eight-fold increase in calls for unintentional marijuana poisoning among children since 2012, many Mainers fear that door-to-door delivery will only place kids at greater risk.)

Not far from Maine, Lantern has thrived in Massachusetts. Lantern is among the leading cannabis e-commerce marketplace and delivery platforms in the U.S and was formerly part of the Drizly Group, a top alcohol delivery company. Lantern currently offers on-demand cannabis delivery for patients and adult-use consumers in Massachusetts, Michigan, and Colorado. In February 2021, Uber announced an agreement to acquire Drizly for approximately $1.1 billion in stock and cash. As part of the deal close, Lantern has transitioned to a separate corporate entity and received $40 million in capital from Drizly Group. The price paid for Drizly has certainly sparked dollars signs in cannabis delivery company’s eyes. Lantern experienced 350% year-over-year growth following the expansion of its on-demand marketplace delivery platform into Colorado and Michigan, two of the fastest-growing cannabis delivery markets in the U.S. Additionally in July 2021, Lantern became the first adult-use delivery platform to launch in Massachusetts and serve the Greater Boston area.

Eaze is one of the largest cannabis delivery companies and the best known. It is a vertically-integrated company with over 7.6 million deliveries completed to date and over two million registered customers. Eaze carries over 100 brands and 600 individual products on its menu and is a nationally-recognized leader in promoting social equity licensees, who have sold nearly $7.7 million in products via the Eaze platform. In July, Eaze launched the first-of-its-kind shoppable cannabis app for Apple. Eaze has also entered into the product side of the business as well and acquired a dispensary from the company Manifest Seven (OTC: MNSFS) in November for $6.7 million.

Despite these success stories, it isn’t all rosy in the delivery business. Stem Holdings Inc. (OTCQX: STMH) (CSE: STEM) sold its wholly-owned subsidiary Driven Deliveries, Inc. to Driven Deliveries’ founders in return for 12.5 million shares of Stem. At the time, Steve Hubbard, Interim CEO of Stem, commented, “After careful consideration with the Board, we have made the strategic decision to divest and discontinue operations of Driven Deliveries for several reasons. First, the delivery and e-commerce cannabis business in California has become increasingly more challenging due to oversupply in the market, which has reduced price per pound approximately 50%. More competition in California has also increased marketing expenses, which has resulted in low margin deliveries consistently. This divestiture will dramatically reduce our monthly expenses and improve our balance sheet, putting the company is a much healthier financial position to focus all of our resources on cultivation, processing, retail and our award-winning brands in California, Oregon and new markets.”

Despite the inevitable legal challenges and logistical complications that come with expanding cannabis delivery systems, Onfleet’s report paints a promising picture for a rising use of (and reliance upon) delivery for all kinds of consumables. With 55% of America’s Gen Z and 60% of Millennials owning up to having more delivery apps than streaming services on their phones (and older customers having grown more comfortable with delivery apps during the pandemic), delivery is a field ripe for innovation. That is, as long as that innovation doesn’t rely on robots or autonomous vehicles. According to Onfleet’s survey, It’s a brave new world, but not that brave. At least not yet.

Debra BorchardtOctober 6, 2020

Stem Holdings, Inc. (OTCQX: STMH) is buying e-commerce and cannabis delivery company Driven Deliveries, Inc. (OTCQB: DRVD) in an all stock deal valued at $46 million. The combined company will be known as Driven By Stem and the new company will continue to trade under the symbol STMH on the OTC. It will maintain its headquarters at Stem’s current location in Boca Raton, FL. The deal is expected to be immediately accretive to earnings of Stem and should close in late 2020.

The company said that the acquisition is expected to increase scale to drive sales growth and bring cost savings estimated at $1.5 million in the first year through productivity initiatives, vertical supply chain efficiencies, and reduction and consolidation of overhead and administrative costs. The deal is not expected to increase debt levels.

“No other cannabis company has the breadth of top-shelf brands and convenience sought by cannabis consumers which Driven By Stem will offer,” stated Adam Berk, CEO of Stem. “We will apply Driven Deliveries’ technology, footprint, and distribution capability to all markets, and leverage our own licenses and retail dispensaries to service more consumers in every state in which we operate,” he continued. “We are excited about the unique opportunities that this combination creates as we build a better model to adapt to the changes in the cannabis marketplace and deliver shareholder value year over year,” he concluded.

Driven Deliveries is an e-commerce and DaaS (delivery-as-a-service) provider with proprietary logistics and omnichannel UX/CX technology which will make Driven By Stem a vertically-integrated cannabis company with a DaaS platform to meet the needs of all cannabis consumers in the markets it serves.

Christian Schenk, current Chairman and CEO of Driven Deliveries, has tendered his resignation effective October 4, 2020 to pursue other interests. Brian Hayek stated, “Merging with Stem completes our transition from an online cannabis technology company and delivery service to a vertically-integrated cannabis operator, and fast-tracks our expansion strategy into new states.” He concluded, “This is a defining moment in our history and is expected to expand our total addressable market and growth opportunities.”

Driven By Stem

The executive team will be as follows:

Adam Berk, Chief Executive Officer, and Chairman: Adam Berk is the current CEO of Stem and a member of Driven Deliveries’ Board of Directors. Adam Berk is the former CEO of Osmio (currently GrubHub), which was the first patented web-online food ordering system.
Steve Hubbard, Chief Financial Officer: Steve Hubbard is the current CFO of Stem.
Ellen Deutsch, EVP/Chief Operating Officer: Ellen Deutsch is the current Executive Vice President and COO of Stem. Ellen Deutsch was an executive of Hain Celestial for over 20 years prior to joining Stem.
Sal Villanueva, President: Sal Villanueva is the current President of Driven Deliveries.
Brian Hayek, Chief Compliance Officer & Special Projects: Brian Hayek is a co-founder and current Chief Financial Officer of Driven Deliveries.

Driven By Stem will integrate Driven Deliveries’ delivery capability and its robust technology in every state in which Stem currently operates, and add Stem’s iconic cannabis brands to Driven Deliveries’ platform of over 400 cannabis products. Stem’s brand offerings cover multiple cannabis product categories, particularly flower, extracts, edibles, and topicals with award-winning brands including TJ’s Gardens and Yerba Buena; Cannavore an edible brand; and Doseology, a CBD mass market brand launching in 2021. As a cannabis technology company, Driven Deliveries’ Budee and Ganjarunner e-commerce platforms will also partner with leading cannabis companies in new geographies to meet the demand for quick and accurate product deliveries. Initial operations will span nine states.

Debra BorchardtApril 23, 2020

California-based cannabis retailer and direct-to-consumer delivery company Driven Deliveries Inc. (OTCQB: DRVD) has reached its third consecutive sales record and noted that during its 420 sales campaigns it exceeded previously set sales record by another 31%.

“We are beyond grateful to have such strong partnerships with our suppliers and loyal relationships with our customers,” said Christian Schenk, CEO Driven Deliveries Inc. “Our staff stepped up to the occasion and delivered the goods to our customers in record time while our supply chain team ensured availability of products across California to ensure the demand created by our marketing organization was fulfilled as committed,” he added.

420 Specials

The company’s retail divisions, Ganjarunner and Budee, ran concurrent sales promotions in partnership with leading cannabis brands. The promotions ranged from BOGO (buy one get one free) to percentage savings and even a few swag giveaways, including ganjarunner branded rolling trays, which were made available to consumers. In-app promotions were pushed through notifications to iOS and Android users of the company’s Weedwaves mobile application.

Both Ganjarunner and Budee introduced its “High Roller Club” to its big-spending customers, even offering year-long savings to members who spent more than $420 on the infamous 420 cannabis holiday. The campaigns drove sales in excess of $100,000 in less than a 12 hr period and resulted in over 1,000 deliveries. The push also had the added benefit of bringing in new customers with more than 300 first time orders that mostly came from organic marketing efforts versus traditional advertising.

Big Sellers

With all the kids at home, it may be that cannabis shoppers had to resort to more discreet forms of consumption. Driven Deliveries said that the largest grossing product category by volume was edibles, followed by flower, then concentrates.

“The operation and technology continue to provide scale and growth for our business,” said Sal Villanueva, President of Driven Deliveries Inc. “We were able to deliver the increased volume with our existing capacity and staff while maintaining our 90-minute promise to more than 92% of California,” he added. “We will continue to push the boundaries and exceed our goals day after day.”

Here’s a list of the 420 promotions that were offered:

ALIVE & KICKING