Eggs, milk, bread…cannabis.
That’s the sort of shopping list more and more Americans are making nowadays. In many communities, you can order pot and get it delivered to your door, just as easily as you can groceries or pizza.
Marijuana isn’t just getting legalized; it’s getting woven into the daily fabric of consumer life. Home-delivered marijuana is a huge trend, spawning profitable opportunities for entrepreneurs and investors.
That said, dispensaries can be slow to show up with a delivery, especially if you live several miles away. But now, in the newest evolution of cannabis retailing, companies are springing up that serve as mobile intermediaries for dispensaries, providing faster on-demand delivery.
For their dispensary clients, these third-party companies offer dispatch drivers; real-time inventory management; payments processing; and other logistical support.
Uber goes to pot…
Even Uber (NYSE: UBER) has gotten into the mobile marijuana business. In Canada, where marijuana is legal on the federal level, the company now allows users to order cannabis sales on its Uber Eats app. It’s a first step for the firm and probably the precursor to U.S. expansion. That said, Uber customers must pick up their pot orders at stores, rather than getting door-to-door delivery.
The trend toward marijuana delivery first gained traction during the depths of the pandemic in early 2020, when social distancing made door-to-door delivery a must for a wide range of consumer goods. Marijuana was actually deemed by many state governments to be an “essential service,” which allowed dispensaries to stay open even as many other types of businesses were shuttered.
Companies that provide the mobility and serve as a go-between for dispensaries and customers are thriving. They’re attracting venture capital, going public, and richly rewarding early investors. During the worst of the COVID outbreak, alcohol and marijuana sales were the primary catalysts for home delivery growth.
When the going gets tough, people need their vices more than ever, especially if they’re homebound because of quarantines. Weed goes a long way toward alleviating pandemic-induced boredom and anxiety. Dispensaries report that the top marijuana products currently requested for home delivery are edibles.
The aforementioned trends are particularly pronounced in California and Colorado, two legalization pioneers where marijuana entrepreneurship runs strong.
California sees about $3.8 billion in annual marijuana sales, making the state the nation’s top marijuana market. Colorado comes in second, at $1.7 billion (figures are for 2020 and represent recreational and medical, combined).
The U.S. cannabis industry is currently worth $61 billion a year in sales; it’s projected to be worth $100 billion by 2030. Nationwide cannabis sales increased 67% year-over-year in 2020. A recent Gallup poll reveals that 12% of Americans are active marijuana users.
Online ordering, curbside pickup, and home delivery will continue to be salient industry trends. Fueling this activity is increasing legalization. Pot was a big winner at the ballot box in 2020, and again in the 2021 off-year elections.
The legal status of marijuana in the U.S. continues to quickly evolve. The following map is a snapshot of where pot stands now in the country (as of this writing):
The efforts of canna-businesses to develop technology and operational logistics to meet demand during the pandemic will pay off in coming years. The health exigencies of the coronavirus crisis accelerated the development of much-needed marijuana infrastructure. Over the last several months, marijuana entrepreneurs have planted the seeds of future prosperity.
As cannabis cements its status as a consumer staple, some pot stocks are superb investments. But many others are not. You need to conduct due diligence.
Investors should avoid companies that provide the marijuana plant as just a commodity. Growing weed isn’t a unique capability; those firms involved in tasks that are easily replicated already suffer from downward pressure on prices. Marijuana companies that offer a specialized service (e.g., third-party home delivery) are your best bets. The industry’s “picks-and-shovels” plays have great investment allure.
The good news is, we’ve done the homework for you. Our stock-picking experts have unearthed hidden gems in the marijuana industry that most investors don’t even know about.
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