They’re Coming For Cannabis: Uber’s Plans to Kill Cannabis
Last week, Uber CEO Dara Khosrowshahi signaled his company’s intent to begin delivering cannabis when federal legalization occurs. This will be the first of many dominoes to fall. GrubHub, Doordash, and Postmates will not be far behind. This will destroy the cannabis industry as we know it. An innovative, cutting-edge approach needs to be taken now to limit the damage and prevent a complete corporate takeover.
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They Will Eat Away At Your Bottom Line
When on-demand delivery services like Uber Eats, Doordash, and GrubHub entered the restaurant industry, they promised convenience for consumers and increased sales and visibility for businesses. What they failed to mention is that their business model would obliterate the traditional restaurant industry.
The Washington Post released a report last year, showing that these corporations charge upwards of 50% commission, meaning that restaurants are operating at a loss in order for billion-dollar businesses to turn a profit. For example, on a $1000 delivery order, Doordash took over $650 in commission – leaving the restaurant well below profitability.
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A Long History of Being the Bad Guy
This type of predatory behavior is exactly the business model these on-demand delivery services use. With virtually no overhead, and complete control of the delivery market, they are able to call the shots with no pushback. Once they enter cannabis – it will be crippling for storefronts and delivery services alike. Margins will disappear until their stranglehold on the industry is complete and no dispensary will be able to operate without their services.
Can You Afford a Superbowl Ad?
It won’t be difficult for these companies to completely take over the existing market. On-demand delivery services spend hundreds of millions of dollars on advertising every year. You’d be hard pressed to find someone who hasn’t heard of Uber Eats, Doordash, and GrubHub. The pandemic has normalized using these services on a regular basis, and that only makes matters worse.
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Weedmaps Works for Them, Not You
To compound these issues, nearly every conventional solution for promoting your brand is pay-to-play. Weedmaps and Leafly are prime examples. When these billion-dollar players enter our industry, ads and promotions on these sites will become so costly that most everyday dispensaries will be completely priced out of the market.
Nothing Can Stop Their Move Into Cannabis
These services aren’t going away anytime soon. UberEats’ revenue skyrocketed over 230% in 2020. They diversified into convenience stores and alcohol delivery. Add cannabis to the equation and you get a trifecta – food, liquor, and cannabis at the push of a button, all from the comfort of your own home. There’s not one person in the US who isn’t interested in that sort of convenience.
They Already Own Your Customers
And, these platforms are widely used across the country. Over 100 million people use UberEats, Doordash, and GrubHub. The transition to cannabis would be seamless and they would have a larger addressable market than any dispensary in the country, right out of the gate. This illustrates the need to establish visibility and brand recognition preemptively.
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Quality is Not Their Priority
In addition, these services have a lengthy track record of subpar performance in the areas that matter most to customer-service oriented businesses like restaurants and dispensaries. The process of receiving an order from them is far more complicated than accepting a traditional online order, with multiple confusing steps. The Washington Post describes the process: “First, someone must “translate” the order into the restaurant’s computers, then a manager must void the transaction to reconcile the books because the revenue doesn’t show up until later (and with the app’s commission taken out) — and then the books must be reconciled again to account for the food inventory.”
They have a reputation for displaying incorrect menu information, whether it be displaying products that are unavailable or omitting important parts of the menu from the app entirely. They consistently botch hours of operation, leading to steep revenue declines.
Their Goal is to Cut Out the Middle-Man
The scariest part of the whole situation is that these companies are openly mining huge amounts of consumer data to use for their own benefit. They are already using food preference data to found “ghost kitchens” all around the country, in an attempt to cut out restaurants from the process entirely so that they can serve the needs of the community and put any competition out of business.
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What You Can Do To Save Your Business
Stickyleaf is the only platform on the market that provides you with the tools to remain competitive as the market changes. We take the guesswork out of running and promoting your delivery service or dispensary. Our only interest is helping you succeed. Whether it’s a robust delivery management and dispatching system, full of automation to save you time, a heavy SEO focus and aggressive content strategy to increase your visibility, METRC-compliant and integrated inventory management, or our loyalty and referral programs – we give you everything you need to keep the ball in your court and make your brand stand out from the pack. Request a call today to find out how you can beat rising competition in Cannabis!