Cannabis delivery and tech company Eaze drastically cut sales predictions and is working to become a vertically integrated retailer – including its own brands – according to the company’s pitch deck outlined by Business Insider.
In 2017, the company estimated it would have sold $1 billion worth of cannabis by 2020, but this year’s pitch deck drops that figure to $190 million, generating $125 million in revenue.
In January, Eaze indicated they would transition to the retail side – raising $35 million a month later from FoundersJT LLC, Rose Capital, and DCM to fund the pivot. The company said the transition would reduce costs and increase working capital. That shift to retail is two-fold, the company outlines in the pitch deck, including “depot consolidation and private-label brand launches.” As part of that effort, Eaze says its “Circles” products and the upcoming “Anarchy” brand would comprise 40 percent of its menu share, giving it bigger margins to work with. Within the first two weeks of launching Circles, the house brand represented about a quarter of its vape and flower categories.
According to the company documents, within four months – from week 1, 2020 to week 16 – Eaze went from owning none of its depots to owning 60 percent, and a spokesperson told Business Insider that figure was closer to 65 percent by mid-May.
Additionally, Eaze anticipates that at $20 million in gross transaction value per month, the company would break even and post a small profit as measured by earnings before interest, taxes, depreciation and amortization (EBITDA), and they expect that break-even to come later this year.
Currently, the company only operates in California but indicated plans to expand into 12 other states once EBITDA positive. According to the pitch deck, the company is eyeing Washington state, Nevada, Arizona, New Mexico, Colorado, Illinois, Ohio, Florida, Michigan, Massachusetts, New Jersey, and New York. Most of those target states only have medical cannabis programs; however, several of those states – namely New York, New Jersey, Arizona, and Florida – are expected to legalize cannabis for adult-use over the next few years.
Last year, Eaze says its gross transaction value increased by 78 percent, totaling $176 million.
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Eaze Lowers Revenue Projections, Plans Retail Expansion