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Uber just took its first tentative step into Canada's cannabis market by allowing Ontario residents to order weed using its popular Uber Eats app.
As cool as it might be to have some pre-rolls delivered with dinner, Uber Eats will not allow its drivers to deliver weed to customers – at least not yet. For its initial venture into the cannabis space, the ridesharing company will allow Ontario residents to place online orders with legal adult-use dispensaries. But although customers can order and pay for legal weed products using the app, they must still go out and pick up their weed themselves.
At present, Uber is only partnering with one dispensary, Tokyo Smoke, which has 50 locations throughout Ontario. This Monday, Uber Eats added a cannabis category to its app in Ontario, allowing adults to place an online order at any Tokyo Smoke dispensary and pick it up within an hour. If this initial venture is a success, the company may consider partnering with additional dispensaries and expanding operations to other Canadian provinces.
“As we learn from this partnership in Ontario, we’ll continue to watch regulations and opportunities closely market-by-market,” an Uber spokesperson told Reuters. “And as local and federal laws evolve, we will explore opportunities with merchants who operate in other regions.”
Uber CEO Dara Khosrowshahi has been eyeing the cannabis market for quite some time. In an interview with CNBC this spring, Khosrowshahi said that he was definitely considering the possibility of adding weed delivery to his company's repertoire. But since US law prohibits banks and payment processors from working with cannabis companies, getting into the weed delivery business would be a suicide move for the company.
For now, Uber is planning to steer clear of the US cannabis market until the feds finally get around to federally legalizing or decriminalizing weed. “When the road is clear for cannabis when federal laws come into play, we’re absolutely going to take a look at it,” Khosrowshahi told CNBC back in April. “But right now with grocery, with food, with alcohol, et cetera, we see so much opportunity out there and we’re going to focus on the opportunity at hand.”
Canada fully legalized adult-use cannabis back in 2018, though, so there are few restrictions preventing Uber from getting involved with the country's legal pot market. Even so, the company is erring on the side of caution with its limited plan to allow users to order weed through its app. In a recent press release, Uber said that it hopes this new service will help inspire Canadians to buy their weed from legal dispensaries instead of black market dealers.
The black market is still a serious concern for Canada's cannabis industry, accounting for about 40 percent of all non-medical weed sales in the country. Black market sales have definitely been shrinking as the legal market grows, but even so, Canada's adult-use market is only expected to hit $4 billion this year. In comparison, the few US states that have legalized weed are predicted to sell $25 billion worth of pot in 2021.