How to Invest in Cannabis Delivery
January 18th, 2021
App, Exclusive, News, Top Story
Delivery services of all kinds experienced record-breaking growth in 2020 thanks to a global pandemic that has depressed retailers, restaurants, and grocery stores. Of course, these trends are just an acceleration of an existing transition from brick-and-mortar to e-commerce—a trend that many in the cannabis industry are betting will be transformative.
Let’s take a look at the growth in cannabis delivery services and how investors can participate in that growth, including via companies like ManifestSeven Holdings Corporation (CSE: MSVN; OTCMKTS: MNFSF) that are quickly building up a sizable presence.
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Delivery Gains Traction
The COVID-19 pandemic has dramatically affected the way that consumers shop for everything from groceries to household goods to cannabis. While Amazon.com was already paving the way from brick-and-mortar to e-commerce, the pandemic forced many Americans that weren’t already moving in that direction to e-commerce and delivery.
As an “essential business” in most states, the cannabis industry embraced delivery as a way for customers to safely access products. California and a handful of other states had already permitted cannabis delivery for several years, but Colorado issued its first cannabis delivery license in early 2020 and several other states could follow suit.
According to BDSA, a cannabis retail sales tracking platform, delivery and curbside pickup sales jumped to 40% of all U.S. marijuana sales in the spring, compared to just 20% of sales pre-pandemic. These levels dipped slightly since the spring surge wore off, but deliveries held steady at about 30% of sales in December, suggesting that it could be a trend.
Scale Remains a Challenge
The cannabis delivery market remains fragmented despite attempts to create larger national brands. While Eaze raised more than $160 million in capital over the years, the company struggled to grow its margins and came close to running out of cash last year before raising $35 million in hopes to develop and sell its own cannabis brands.
In order to address these challenges, ManifestSeven has focused on multiple parts of the value chain rather than just delivery. The company began by establishing regional distribution hubs throughout California before acquiring dispensaries. With a supply chain in place, the company is able to make cannabis delivery work with attractive margins.
ManifestSeven Targets a Wider Value Chain – Source: Investor Presentation
ManifestSeven acquired its flagship dispensary in Orange County in 2019 and launched its Weden dispensaries and delivery brands shortly after. According to its latest investor presentation, the company is approaching 20 commercial vehicles in its fleet and receives an average of approximately 150 delivery calls per day through its proprietary 1-800-CANNABIS platform.
Click here to receive an investor presentation and corporate updates
Investing in Cannabis Delivery
Most cannabis delivery companies are regional startups raising private capital through seed and venture rounds. While accredited investors may have an opportunity to participate in these deals, most mainstream retail investors must look toward the public markets to participate in the potential upside through listed equities.
ManifestSeven Holdings Corporation (CSE: MSVN; OTCMKTS: MNFSF) provides exposure to the significant growth in cannabis delivery without the margin risk associated with pure-play companies. With an extensive distribution footprint, company-owned dispensaries and its own direct to consumer delivery capabilities, the company has captured large parts of the value chain.
Since inception, the company has grown its revenue by more than 100% in each of its last three fiscal years and its infrastructure now covers nearly 90% California’s addressable cannabis market. The company’s experienced management team plans to continue its growth through acquisitions—potentially expanding its delivery footprint across larger parts of California and beyond.
For more information, visit the company’s website or download their investor presentation.
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This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.
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CFN Enterprises Inc. (OTCQB: CNFN) owns and operates CFN Media Group, the premier agency and financial media network reaching executives, entrepreneurs and consumers worldwide. Through its proprietary content creation, video library, and distribution via www.CannabisFN.com, CFN has built an extensive database of cannabis interest, assisting many of the world’s largest cannabis firms and CBD brands to build awareness and thrive. For more information, please visit www.cfnenterprisesinc.com.
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