Signs of the market correction in the legal marijuana sphere abound, and now a prominent Bay Area dispensary that is a delivery-only operation is significantly cutting its workforce.
Green Coast Management, which sells cannabis via the Eaze app in both the East Bay and San Francisco, just filed state paperwork to lay off 136 workers. The Oakland-based company has not commented publicly on whether or not it is shutting down completely, though the Chronicle reports that the state filing did not indicate the company was closing.
The state's still nascent Bureau of Cannabis Control reports around 100 stores and dispensaries operating in the Bay Area, many of whom are competing in the lucrative delivery market. As has been widely noted, the black market for cannabis remains strong because of the high cost of doing business in the legal market, which has in turn made the prices of legal weed products significantly higher. Meanwhile, the state has an enormous glut of weed being grown. The New York Times reported in April that by one estimate, less than 20 percent of the 14 million pounds of marijuana grown in California is consumed in the state, with the rest of it getting smuggled out and sold illegally. And about 80 percent of the state's municipalities haven't legalized retail weed, leading to significant demand for the illegal stuff.
Meanwhile, Eaze maintains a unique business model of providing pot-delivery technology and payment processing without selling any pot itself. As Leafly reports, Eaze is promoting its service in 100 California cities, and in San Francisco, Eaze is partnered with DCSM Inc. and Hometown Heart, both of which provide their own drivers.
Delivery has, in fact, been one of the stickiest issues in the first 17 months of legal cannabis in California, with many of the jurisdictions that have now allowed retail sales remaining grumpy about the fact that state law allows for dispensaries and delivery services to deliver anywhere in the state. As the Sacramento Bee reported earlier this year, CHP officers have been seizing more cannabis than ever before, regardless of whether it came from a legal source.
According to the filing by Green Coast, 115 of the 136 laid-off workers were delivery people.