Is Uber Stock Going Higher After Its Weed Announcement?

Uber is entering the cannabis market, partnering with Tokyo Smoke to make marijuana products available for pickup for customers in Canada

Nov. 24, 2021

There it is. Uber weed delivery, coming to a city near you —  almost at least. Uber can’t technically deliver cannabis products just yet because of legislation, and for the time being, it will only but orders will be available through its app for pickup in select Canadian cities. 

Uber’s greener pastures

It’s actually not the wildest Uber-esque idea to date. It’s almost as good as UberKittens, the service that allowed 15-minute cuddle sessions with the furry fellows — yes it’s real — and all of the proceeds went to animal shelters too. Good job Uber. 

Anyway, the story:

In a joint effort with Tokyo Smoke, Uber will further diversify its revenue streams and appeal to a new branch of customers. According to BDS Analytics:

“The global licensed dispensary sales of cannabis will reach $40.6 billion by 2024, registering a CAGR of 24.5%”

So this marks a great opportunity for the company. The market in Canada is currently estimated to be worth over $4 billion, but there could be possibilities of expanding the service into the U.S. in the future. California actually already permits deliveries once local dispensaries deliver via their own drivers, but for now, Uber is waiting on further regulatory clarity.

It’s not first to market either, with companies like WeedMaps already operating in Europe and North America. Uber does, however, have a network advantage of almost 4 million drivers that made more than 1.6 billion trips in Q3 2021, should it expand.

It may sound silly, but the move may encourage cross-selling for UberEats too, which is already the leading catering app in the world, working with over 600,000 restaurants in 6,000 cities, and it pulled in over $30 billion in gross bookings for 2020 alone.

Ah yes, the synergy.

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