Eaze Acquires Green Dragon: Becoming America's Largest Cannabis Delivery Service

Eaze Announces Major Expansion Plans

Eaze has revealed ambitious plans to significantly broaden its reach within the U.S. cannabis delivery sector. The Bay Area company, a pioneer in on-demand cannabis delivery, is poised to acquire Green Dragon, a cannabis retailer and cultivator with a strong presence in Colorado and Florida.

This acquisition, coupled with Eaze’s current operations in California and Michigan, would establish the company in four of the nation’s most substantial cannabis markets.

From Financial Uncertainty to Growth

Not long ago, the future of Eaze was uncertain, with concerns about its financial stability. Reports indicated difficulties in securing funding and subsequent, undisclosed staff reductions.

The company transitioned its business model, shifting from a purely delivery service to functioning as a delivery dispensary. Initially conceived as the “Uber of weed,” Eaze aimed to evolve into the “Amazon of weed.”

Company History and Leadership

Established in 2014 by Keith McCarty, Eaze has successfully raised over $255 million in funding to date.

The company has experienced changes in leadership, having had three CEOs, with Rogelio Choy currently at the helm since 2019.

Notably, a former CEO, Jim Patterson, recently admitted guilt in a $100 million scheme involving the deception of banks regarding cannabis purchase payments.

This case bears similarities to a 2019 case brought against Eaze itself, although the company maintains it was not involved and is not a defendant in Patterson’s legal proceedings.

Despite past challenges, Eaze is now securing further funding and is on course to become the leading multi-state cannabis delivery service in the country.

Recent Funding and Valuation

In 2019, Eaze altered its strategy and finalized a Series D funding round of $90 million in August 2020.

Currently, the company is working to finalize a $75 million Series E funding round, with 80% of the necessary capital already pledged, and expects completion in November.

Eaze projects this round will value the company at over $700 million – a doubling of its valuation from 2019.

The anticipated funds will be allocated to further expansion of its retail operations.

Justification for Increased Valuation

Cory Azzalino, Eaze’s Chief Strategy Officer, explains the higher valuation, stating: “The company has undergone a fundamental transformation.”

“Our California operations have grown considerably since 2019, both in terms of revenue and potential for future expansion.”

“The addition of Florida, Michigan, and Colorado expands our addressable market by approximately $6 billion.”

Expanding National Footprint

Eaze is rapidly establishing itself as a significant national cannabis operator.

Earlier in 2021, the company announced its expansion into Michigan, a rapidly growing cannabis market in the Midwest.

The potential acquisition of Green Dragon will provide Eaze with delivery capabilities in Colorado, which recently approved cannabis delivery services, and Florida, a state with a substantial medical marijuana market.

Green Dragon reported over one million transactions in 2020, and its Colorado stores experienced a 39% growth in the same year.

In July, Green Dragon expanded into Florida, opening its first two dispensaries and planning to secure 20 additional locations by the end of 2021.

Apple App Store Policy Change

The timing of these developments is particularly favorable for Eaze.

In June 2021, Apple revised its App Store policy to permit licensed cannabis dispensaries to list and sell cannabis products – including flower, edibles, and vapes – directly through iOS apps.

Eaze was the first retailer to capitalize on this change, offering weed sales through its iPhone app, though currently limited to California and soon, Michigan.

CEO Statement

“Eaze has demonstrated substantial growth over the past two years by successfully transitioning to vertical operations and cultivating a loyal customer base,” stated Eaze CEO Rogelio Choy.

“Green Dragon’s established operations in Colorado and expansion into Florida’s thriving market enhance our operational capabilities nationwide and solidify our position as California’s leading MSO.”

“Together, we are well-positioned to capitalize on the market’s explosive growth, both now and in the future.”