A company that has been described as the “Uber Eats for cannabis” hopes to deliver marijuana products to a market of 13 million people from a base in California City.
That company, Driven Deliveries Inc., is part of an influx of marijuana businesses that have received permits from the California City City Council to deliver cannabis throughout the region.
A total of 10 companies were granted permits for delivery. Two companies, Driven Deliveries and Royal Apothecary, were also granted a permit to open a storefront to sell cannabis products within California City as well as make deliveries.
A total of 16 businesses applied for delivery licenses, and nine applied for storefront licenses. California City officials ranked those businesses on items such as security, business plans, and opportunities for veterans or women.
Driven Deliveries, which operated in California City as Cal City Supply LLC, received the highest score among storefront applicants, and appears to be the largest and most well-established company of all the businesses that applied.
“Our goal is to scale up and get big as fast as possible,” Driven Deliveries President Brian Hayek said in a phone interview.
California City was crucial to that expansion, he added.
Although marijuana is legal to grow, consume and sell in California, local municipalities have the option of banning sales, and many have taken that opportunity.
As many as two-thirds of all local governments in California, including both Bakersfield and Kern County, have banned sales of marijuana products.
However buying cannabis online and having it delivered to a residence is legal under state law.
Outside of Arvin, California City is the only city within Kern County to allow marijuana sales, making the city a potential oasis for companies that want to deliver cannabis throughout the entire Central Valley and other surrounding areas.
“The cannabis industry has been the only major industry that says, ‘Hey, we want to come here and we want to set up,’” said California City Mayor Chuck McGuire. “What we’re hoping for is, once this gets established, that the taxes that we will get from the cannabis industry will help sustain the revenue coming into the city.”
Driven Deliveries is a publicly traded company based in San Diego that has modeled itself after tech companies like Amazon. It trades "over the counter," or outside of a traditional stock exchange.
It hopes to use California City to become the predominant marijuana delivery service in California.
The company expects to earn $5 million to $7 million in sales in its first year out of California City.
In addition to a storefront, which will sell cannabis products directly to consumers, the company will operate a fulfillment center, which will serve as a central hub by which it can deliver marijuana products throughout the region, including places like Bakersfield.
Customers will order products online, either directly or through a third-party, and a contractor will drive the products to the person’s front door.
Delivery people drive nondescript cars, and the handoff is intended to be discreet.
Ideally, the delivery would take place no later than a day after the order is made.
“If they place it before midnight, they’ll get it the next day from us,” Hayek said.
The company plans to hire 16 positions for the store, and contract 20 to 25 drivers to make deliveries, most of which it hopes will come from California City.
It hopes to begin operations by July 1, provided it receives a state license in time.
Driven Deliveries was founded in 2013 and went public in late 2017. It already operates two fulfillment centers in Sacramento and Los Angeles and plans on opening another in Santa Cruz in the coming months, in addition to the California City location.
The company currently employs around 15 people, not counting its contracted drivers. The new expansions will add around 30 employees, Hayek said.
Driven Deliveries has a market capitalization of $66.7 million, and reported a net loss of $2.6 million in calendar year 2018, following the model of many tech companies that lose money early in their history in an attempt to scale up quickly.
It recently announced its acquisition of the marijuana delivery company Ganjarunner and has expanded its operation into Nevada.
With its two new fulfillment centers, the company believes it can serve 92 percent of the population of California.
“It’s kind of like the wild, Wild West,” Hayek said of the marijuana delivery market in California. “We’re really trying to bring that consumer confidence to the consumer experience and the cannabis experience in general.”