Into the fast lane. That’s where Jamie Steigerwald, Chief Marketing Officer of Nug Avenue, has driven the company in less than six months. The marijuana delivery service in Los Angeles, California, only started in February, yet it’s already delivering nearly 200 orders a day.
Growth like that would be impressive in twice the time. How did he do it?
By entering the market to sell his product in a new way at exactly the right time.
Delivery is a game-changer
“Thanks to companies like ours, you no longer have to travel across town to refill your cannabis supply,” Steigerwald commented in The Marijuana Times. “You can just order online and have it hand-delivered to you at home. We pride ourselves on our professionalism — you’ll receive a discreet sealed pouch that won’t alarm your neighbors.”
Delivery services in general got an unexpected boost by the pandemic, which forced consumers to assess the risk of every trip outside the home. This dynamic was especially true for the delivery of marijuana, since medicinal cannabis became an essential service. As ArcView Market Research and BDS Analytics explained in January 2021, in the middle of the COVID winter, “Cannabis delivery… is heating up across California for the canna-businesses that took the next big step early and got a delivery license.” Cannabis sales turned into a goldmine during 2020, and delivery services have afforded its richest vein.
Will brick-and-mortar retail sales rebound once the pandemic is over? After becoming accustomed to the convenience of delivery, some doubt it. “Why would customers go back to waiting in lines in stores?” asked I Heart Jane chief executive Socrates Rosenfeld. Cory Rellas of alcohol-delivery service Drizly has agreed. “I expect delivery to be a standard part of behavior, even after the vaccine. Delivery is becoming a commodity; it’s now what consumers expect.”
Location, location, location
Companies big and small are scrambling to corner market share in states where weed has been legalized. Even Uber and Amazon have hinted they might try to get in on the action. Another part of Nug Avenue’s success may be credited to its particular market. The company’s service area covers Los Angeles, the most populous city in California.
“We strongly believe the LA delivery market is the prime spot for expansion of our business,” Jimmy Chan, CEO of Sugarmade, commented upon obtaining a majority stake in Nug Avenue. “California is the world’s sixth-largest economy, and LA County is by far the most significant driver, with over 25% of the state’s population. The Lynwood, California, site is optimal, as it is located along one of the major distribution freeways, allowing drivers to efficiently reach the more than 15 million consumers that live within a 30-mile radius of the new location.”
While much about the post-COVID world remains unclear, one thing seems sure – marijuana has come a long way since California legalized it for recreational use five years ago.
“Back in the day, when you were hanging out with your friends and wanted to get high, what did you do? You called your weed dealer and set up some sketchy meetup,” Steigerwald said. “Once weed became legal, customers had more choices, and they didn’t have to hide anymore. Now they can enjoy the convenience of same-day home delivery.”