California’s so-called “Uber of Weed” is set to shut down by year end due to a series of problems plaguing the state’s cannabis industry. About 500 employees will most likely be laid off as a result.
In a LinkedIn post Sunday night, Eaze Technologies chief executive Cory Azzalino revealed that the cannabis delivery provider’s parent company had sold off Eaze’s assets for a sum of US$54 million. When times were good, Eaze had a valuation of approximately US$700 million.
“Due to the ongoing challenges of the California cannabis market, the company’s assets were foreclosed on by our lenders on Aug. 6,” Azzalino said. “Consequently, Stachs LLC [parent company] will be winding down operations, with the full closure expected to take place on or around December 31, 2024.”
He says that Eaze’s management team has been collaborating with the company that took possession of Eaze’s assets to determine if the delivery provider will have the opportunity to continue operating in the new year under a different structure. That company, known as Founders JT, was founded by the multi-billionaire tech investor James Henry Clark.
An update will be provided by mid-November, Azzalino says. He also informed MJBizDaily that the company’s fate is significantly dependent on whether Florida decides to legalize recreational cannabis sales in November. Clark likely has other plans for the assets if this happens.
“The new ownership group is awaiting the election results [Florida Amendment 3 results specifically] to make final determinations on go forward plans,” Azzalino said in an email.
“Eaze would be reopening under a new corporate structure potentially with new management, if it’s determined the new ownership group wants to keep it open,” Azzalino said in another email sent to SFGATE.
https://twitter.com/jfberke/status/1843337189536739608
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California set to host Amsterdam-style cafes
On a more positive note, Golden State Governor Gavin Newsom just signed a bill approving new cannabis lounge legislation. Celebrities such as Whoopi Goldberg and Woody Harrelson offered their encouragement and were part of his inspiration. They both own cannabis businesses in the state.
The bill’s provisions will come into force on Jan. 1 next year.
California State Representative Matt Haney says that allowing these coffeeshop-style pot consumption venues in the state will put California on par with Amsterdam on the world’s cannabis culture leaderboard.
“There’s no doubt that cannabis cafes will bring massive economic, cultural and creative opportunities and benefits to our state,” Haney said.
California was the first American state to legalize medical cannabis in 1996. It has the largest legal market in the country. The state generates vast income from taxes on marijuana but also has a thriving illicit market because of this.
Newsom signs a bill to allow Amsterdam style cannabis cafes. A few years ago I would have been all for this, but California can’t control any of this. People turn into idiots and it’s not as if there are any consequences for their actions. They will just turn into community drug… pic.twitter.com/cuLv24QOb1
— Chef Andrew Gruel (@ChefGruel) October 4, 2024
rowan@mugglehead.com
