Uber Eats will handle cannabis deliveries in Toronto through new Leafly partnership
Cannabis shoppers in Toronto will be able to request cannabis deliveries through Uber Eats starting Monday.
The food delivery platform owned by US tech giant Uber Technologies Inc. announced on Sunday a partnership with online marijuana marketplace Leafly that will see it fulfill pot orders for retailers Hidden Leaf Cannabis, Minerva Cannabis and Shiva’s Rose.
This partnership will mark the first time that Uber will facilitate the delivery of marijuana anywhere in the world.
Consumers, who must be 19 or older, will place orders on the Uber Eats app, which stores can receive and respond to through Leafly’s software. Retailers then send staff certified under Ontario’s cannabis retail education program, CannSell, to drop off purchases to shoppers, who are age and sobriety verified upon delivery.
Uber has positioned the partnership as a way to tackle the illicit cannabis market, which licensed pot producers have long accused of stunting sales.
“We’re partnering with industry leaders like Leafly to help retailers provide Torontonians with safe and convenient options to buy legal cannabis for delivery to their homes, which will help combat the illegal market and reduce impaired driving,” said Lola Kassim, Uber. The CEO of Eats Canada, in a press release.
Nearly 57 per cent of cannabis purchased in Ontario between early January and late March was through legal channels, the Ontario Cannabis Store (OCS) revealed last week. The conclusion is based on data reported by consumers to Statistics Canada, leading many to warn that these numbers could be skewed as shoppers are less likely to admit illicit cannabis purchases to government agencies.
Uber is not completely new to the cannabis business. Uber Eats users have been able to order cannabis products for pickup at Tokyo Smoke stores since November, but the partnership hasn’t enabled deliveries like the new Leafly deal does.
The deliveries were made possible when Ontario temporarily allowed cannabis stores to courier orders to customers in 2020 as COVID-19 restrictions closed pot stores.
The policy was made permanent in March and came with several stipulations from the Alcohol and Gaming Commission of Ontario (AGCO), the province’s pot regulator.
Businesses operating cannabis delivery businesses cannot operate entirely or primarily through delivery, orders must be placed and fulfilled by specific stores versus a network of stores, and pot can only be dropped off to customers when the store it comes from is open to customers.
Stores will use their own staff for deliveries
AGCO does not allow third party deliveries and products may only be shipped by those with retail store authorization or their employees.
So Uber Eats couriers who drop cravings won’t make pot deliveries either. Stores will hire and train their own staff to deliver orders placed through Uber’s software.
Uber declined to share the amount of the discount Leafly will take for each sale made through Uber Eats. However, Uber takes a 20-30% commission for most restaurant orders delivered through Uber Eats. The industry has long argued that the reduction is too high.
Uber’s move to facilitate cannabis deliveries comes as the company has branched out beyond restaurant deliveries. It has delivered courier products for apparel and homeware retailers like Indigo Books & Music, Dollarama Inc. and The Body Shop and even entered the competitive grocery delivery business.
Rise of cannabis retailers in Ontario
The cannabis industry is even more ferocious. According to the SCO tally, the number of pottery shops in the province rose to 1,460 at the end of March from 1,333 at the end of 2021.
Growth has driven companies to cut prices and adopt loyalty programs, senior discounts and even price-matching incentives to keep up with the competition.
Marissa Taylor, co-owner of Hidden Leaf, wanted to partner with Uber Eats and Leafly because she sees them as another tool she can use to expand the customer base at her North York location, where a loyalty program is already in place.
“We’re a small company and it was really to help bring cannabis to more people,” she said.
“Accessibility isn’t always easy for everyone…and then to expand our reach, e-commerce is definitely the way to go.”