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Online marijuana sales picking up as customers demand options

Online sales

Cannabis companies are rolling out online purchase platforms as consumers turn to the web to order marijuana. Photo Courtesy of Eaze

Just as they’ve taken to shopping for dog food, books and clothing online, consumers are increasingly turning to the convenience of the internet to order cannabis products.

Online shopping enables people to browse and research products at their leisure, and, in some locations, their orders can be delivered. In locations where delivery isn’t allowed, customers’ orders will be ready for pickup at the store.

Online orders account for a small percentage of sales for Denver-based Native Roots, which launched its online ordering platform in September, but the company is encouraged by the growth it’s seen month-over-month, said Chris Znerold, Native Roots’ chief marketing officer. Znerold said customers who order online for in-store pickup tend to spend 50% more than when they visit a retail store.

“The more customers see the ease of it, the more they’re eager to order ahead and skip the line,” Znerold said. “Dispensaries can be a little challenging or intimidating to make a decision when you’ve got a few people in line behind you.”

Consumers can order cannabis on websites but will be hard-pressed to find an app to download onto mobile devices.

“Because cannabis isn’t recognized federally to be legal, a lot of those national app stores don’t allow you to have commerce-driven cannabis apps in the app store,” Znerold said. “That said, we do have a fully responsive, optimized app, and we are poised should legislation change at the federal level.”

 

Easy Access

San Francisco-based Eaze launched in 2014 to deliver medical marijuana to patients in California. Since then, the company has expanded to offer recreational customers on-demand delivery of cannabis products in California and Oregon. The company also ships hemp-derived CBD products to other states.

Eaze verifies the customer’s age twice: when the online order is placed and then when it’s delivered. Customers can see their payment options, which vary by location, when they enter their address on the Eaze website, which allows them to supply credit card information if they’re in an area where it’s an acceptable form of payment. They also can pay the dispensary driver in cash when the order arrives.

The number of deliveries Eaze makes continues to increase each year. It took the company just over a year to increase the number of deliveries it was making from 2 million to 3 million and just another six months to reach 4 million.

“It’s growing at a very rapid pace,” Eaze Senior Director of Marketing Sheena Shiravi said. “People are understanding that cannabis is a wellness tool.”

While Eaze will deliver to California communities that haven’t approved cannabis retailers within their boundaries, wholesale cannabis club Flower Co. delivers only to members in locations where cannabis is permitted. Customers pay the drivers in cash after presenting identification verifying they are at least 21 years old.

“In state law, there is language that says you can’t ban delivery vehicles from driving through your county, but there is also other language that says you have to be in compliance with local regulations,” said Ted Lichtenberger, CEO of the Arcata, California-based company.

 

A ‘Powerful’ Tool

Flower Co.’s 1,500 members can buy cannabis products for 30% to 50% less than at traditional marijuana retailers in exchange for paying annual membership dues of $119. With an average of $120 per order, the size of Flower Co.’s orders is roughly double the industry average of $60.

“Online sales and delivery are really powerful tools to pulling people into the regulated space,” said Lichtenberger, who estimates Flower Co. makes 500 deliveries a week. “We’re excited to be part of that with our membership model. A lot of our members used to buy from friends of friends. Now we’re able to give people access to products that have been tested. Delivery and online sales in general are a positive force in meeting people where they are.”

Canadian startup Verda Innovations has built a centralized platform for retailers to list their products that users can browse to make informed decisions about what they’re buying.

The Waterloo, Ontario-based company is using third-party couriers who will pick up products at the shop and deliver them to customers, who in Canada can pay for their merchandise with credit or debit cards at the time they order them. When Verda expands into the United States, the payment method will vary by state depending on the law.

“It’s like Grubhub but for cannabis,” said Evan Adcock, Verda Innovations’ founder and CEO.