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Cannabis Legal or not, cannabis delivery services prepare for launch

Save the Drive CEO Chanel Graham in Edmonton, Alberta on Friday, September 7, 2018. Amber Bracken The Globe and Mail

Amber Bracken/The Globe and Mail

Part of cannabis and small business and retail

Several Canadian entrepreneurs are preparing to launch cannabis delivery companies in time for legalization on Oct. 17, despite the fact this service will be illegal for recreational marijuana in most provinces.

These entrepreneurs believe clients will be willing to pay to get deliveries faster than they could from provincially run cannabis websites. If municipalities block legal cannabis stores from operating in certain areas, that could also boost opportunities for private delivery services.

After working as an operations and strategy manager at Uber Canada for more than two years, Ryan Dempsey started developing plans for Eddy Delivery, a Toronto-based on-demand cannabis delivery service, in May.

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He sees Eddy as an opportunity to offer consumers privacy and convenience while giving existing recreational users a legal alternative to the home-delivery black market. In many Canadian cities, illegal cannabis delivery is thriving. Weedmaps, a popular Yelp-like app for cannabis dispensaries and strains, lists more than 100 businesses currently delivering recreational cannabis in Toronto.

“We think the speed and reliability of our delivery will differentiate our service,” Mr. Dempsey said. He points to other advantages, too. Users will know their purchase is legal, quality-tested and can be paid for with a credit or debit card.

With a five-person team, Eddy plans to launch first in Manitoba and Saskatchewan, the only two provinces that currently allow private recreational cannabis delivery. Other provinces, such as Alberta, have ruled the model out, while some have yet to finalize plans. Ontario remains a question mark as the province continues to consult municipalities before finalizing its regulations.

“We want to launch our service across Canada over time, but we’re only going to be launching where we’re permitted to,” Mr. Dempsey said. “We’re being very careful.”

Clients will be able to order medical and recreational cannabis online or through Eddy’s app. Once they create an account and verify their age by uploading government-issued ID, they can learn about different cannabis strains and purchase them, with delivery in as little as half an hour.

The cannabis will be sourced from licensed retailers. As for drivers, Eddy is partnering with Inabuggy, a Canadian grocery and alcohol delivery company operating in Toronto, Ottawa, Vancouver and Calgary. Similar to Uber, drivers will collect a delivery fee.

Other startups are jumping right in, with or without permission. Edmonton-based Save the Drive plans to launch an app in late October. The platform will connect consumers with a personal shopper who will pick up their product and deliver it. All payments will be done through the app.

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Chief executive Chanel Graham said she was inspired to create the company to keep intoxicated people off the road and to quickly reach cannabis users with mobility issues. She said the app will be available in Edmonton, Calgary, Saskatoon and Vancouver, with tentative plans to expand to Toronto in 2019.

The company intends to hire three full-time and six part-time employees and at least 200 drivers.

However, the company may face regulatory challenges. The Alberta Gaming and Liquor Commission said private cannabis delivery will be illegal, and instead, the province has signed contracts with Canada Post and Purolator to deliver cannabis sold through the AGLC's website.

Alberta’s main concern with delivery is ensuring cannabis is kept out of the hands of youths. “[Canada Post and Purolator] have to verify the user they’re delivering to. It’s not going to be just left on the doorstep or delivered to someone who’s underage who answers the door,” said Kaleigh Miller, a senior communications officer with the AGLC. For now, Ms. Miller said Alberta is not entertaining a move to allow private recreational cannabis delivery.

Ms. Graham didn’t directly address questions from The Globe and Mail about her business’s legality. She said she expects the AGLC will approach Save the Drive after it begins service, and she plans to work with the province’s regulations.

Despite the legal hurdles, app adoption in Canada’s medical marijuana market shows promise for the upcoming recreational one.

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Aurora Cannabis, one of Canada’s largest marijuana producers, created an app for patients in 2016, offering free delivery across Canada for orders of five grams and up. About one-third of Aurora’s medical cannabis users purchase products through the app, according to Heather MacGregor, Aurora’s director of communications. She said the app may target recreational users in the future.

Successful U.S. cannabis delivery companies are also watching Canada as it becomes the first Group of Seven country to legalize cannabis.

Eaze, a California-based cannabis delivery company founded in 2014 that is sometimes called the “Uber for weed,” has conducted more than two million deliveries to date and raised approximately US$52-million in funding. David Mack, Eaze’s head of policy, said the company is pursuing Canadian expansion plans, although it has nothing specific to announce yet.

“The Canadian market is exciting,” Mr. Mack said. “We are following along very closely.”

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