U.S. cannabis retailer MedMen Enterprises Inc. (CSE:MMEN) announced this week the launch of its delivery service in California, allowing consumers to have products sent straight to their homes. The company said it will offer same-day delivery service statewide to tap into California’s potential US$11 billion legal pot market, it added.
California has the world’s largest cannabis market, according to BDS Analytics, and the research firm predicts legal sales will reach US$3.1 billion this year and finally eclipse the thriving black market by 2024 climbing to US$7.2 billion. MedMen is aiming to build on its 17 retail locations in the state and further tap into the legal market with its home delivery service.
MedMen has always been at the forefront of shaping and defining the cannabis industry, and we are proud to be taking the next step in our evolution by now offering delivery service in California. This enhancement in technology provides our California communities with convenient access to quality products.
– Adam Bierman, CEO of MedMen
MedMen said it will offer 400 products making the delivery service the most robust of its kind. Orders can be placed on its website and the company will use its retail locations to its customers. MedMen plans to roll out the service nationwide, but with cannabis illegal at the federal level will present that ambition with obvious hurdles.
From a privacy standpoint, users may have some apprehension giving out credit card information due to fears of being tracked. But a delivery service could be valuable for medical marijuana users that may not be able to physically visit a store.
Whether its delivery or drive-thru, there’s a clear demand in the industry for an easy way to purchase cannabis and MedMen is looking to capitalize on that. The service will be available 365 days a year and for a limited time, customers will have the opportunity to receive free delivery.
— MedMen (@ShopMedMen) August 19, 2019
Loyalty program launched
In addition to delivery, the company also launched a rewards program called ‘MedMen Buds.’ It will allow members to earn points and receive discounts as Medmen aims to retain customers and build its base. The program already has more than 40,000 members across 14 stores in California, Arizona, and Florida.
Slumping MedMen looking for a boost
MedMen stock price has lost 40 per cent of its value since the start of the year. Mounting losses and internal conflict have provided the company with plenty of bad press the last several months. And the lower the stock goes, the harder it will be for MedMen to raise capital, which could compound the problem even further.
With many stocks to compete with, it’s going to be harder than ever for MedMen to be able to attract investors given its current challenges. But generating more revenue from repeat customers and gaining new clientele via home delivery should help the company accelerate its revenue growth. Shares of MedMen are up 12 per cent since it announced Monday the launch of its new delivery service.
Top image courtesy of MedMen