One start-up is lighting up a budding new industry, selling highly sought products delivered right to your door.
“SpeedWeed is the retail outlet, just without the storefront,” said Jen Gentile.
Jen along with her husband, AJ, and her brother-in-law, Gene, co-founded the company in 2010. The trio initially launched with medicated gummy bears, but the start-up quickly introduced a variety of products, including marijuana-infused teriyaki sauces, lip balms, cherry pie-flavored weed and dog biscuits.
“Patients place an order online or over the phone, or through their mobile app, and in about 90 minutes a vetted driver arrives at your door, easy and discrete,” said AJ Gentile.
SpeedWeed’s more than 55 drivers deliver in Los Angeles and North Orange County, averaging a 45-minute delivery time, pending traffic. The start-up said it has plans in place to expand to other parts of California soon. The founders said they service an average of 2,500-5,000 customers per month.
The start-up works with growers, and plants and harvests its own product. But its edible lineup and vaporizers are brought in from outside vendors. Products retail from $5 for a single pre-rolled “joint” to more than $200 for some more potent products.
Troy Dayton, ArcView Group co-founder, noted that marijuana businesses in California have to register as nonprofit organizations. He questioned how the start-up would be able to seek investments under the state law.
“We have a marketing and branding company that is an outside company that contracts with our collective, so investors can invest in that company,” Jen Gentile told CNBC.
However, the co-founders acknowledge that legalization of weed at the federal level remains a big risk. They added that the U.S. Justice Department’s decision to allow states to set their own marijuana policies in December 2014 has benefited their business.
Additionally, the founders told CNBC that they are working directly with the California Board of Equalization to help establish the tax/regulatory structure for cannabis delivery and transportation.
But the start-up exists in a growing, yet crowded space, competing with other California-based, on-demand pot delivery services such as MediDrops, TreeHouse and Eaze.
Still, the founders have high hopes. According to the company, SpeedWeed has been profitable. But the founders have started to direct that cash into marketing and expansion. However, the start-up expects to be profitable again by the end of 2015, with its current monthly revenue ranging from $200,000-$300,000.
So far, SpeedWeed has raised $500,000 in funds, with plans to raise another $1,500,000.
Image credit: CC by Jordan Greentree