With Over 300% Year-on-Year Increase in Platform Orders, This Cannabis Delivery Technology Company Reports it's Expanding into New Territory

Image provided by WebJoint

The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.

The legalization of cannabis provided a vantage point for the study of forward-thinking entrepreneurship.

In particular, entrepreneurs who focused on capitalizing on niche cannabis spaces — such as cannabis technology — serve as interesting case studies. By operating as supplements to the industry, these niche-driven initiatives would allow entrepreneurs to avoid or exploit the regulatory hurdles of retailers while capturing the growth and potential of the booming industry.

Take WebJoint as an example. As CEO Christopher Dell’Olio and COO Hilart Abrahamian prepared for the legalization of cannabis, they decided to build an ancillary technology company to help an entire subset of the market -- cannabis delivery services -- maintain their compliance and scale their operations for growth. Since launching in 2017, the team’s forethought and delivery-first philosophy has seemingly placed them as market leaders in the cannabis delivery software niche.

WebJoint’s StartEngine provides insight into just how successful it can be to operate in the niche of cannabis delivery. For one, the company reports to have captured a third of California’s retail operators, amassing 1.9 million orders from over 819 different California cities.

A deeper dive into the company’s self-reported financials shows a stream of growth metrics. Revenue has increased by 223%, platform orders by 356% and volume of platform orders by 322% year-over year (YoY). Additionally, the company boasts 421,000 registered consumers on their website, a 160% YoY growth.

These metrics provide some vindication for WebJoint’s niche-focused choice of entering into the cannabis market. They do not mean, however, that major players are unsuccessful. At the height of the cannabis boom, GrowGeneration Corp. GRWG’s market capitalization reached nearly $4 billion, achieving midcap status when only 10 years prior its product was considered illegal in the North American continent.

Other cannabis contenders like Tilray Inc. TLRY and Aurora Cannabis Inc. ACB reached yet more dramatic valuations, and even in the current slump, ventures such as Green Thumb Industries Inc. GTII boast revenues above $750 million. Retailers are clearly assuming larger risks in pursuit of larger rewards. 

A Successful Business Model?

In 2018, the risk incurred by retailers manifested clearly with the decline of many of the larger cannabis operators — a stark contrast to the intense growth seen by cannabis niche operators like WebJoint.

Perhaps the main reason WebJoint skirted losses and increased growth was that its founders had seemingly built a business model that thrived on the issues that regulations imposed on the industry - and WebJoint’s ability to solve those issues.

Before WebJoint, cannabis deliveries were burdened with the task of reporting for compliance; retailers had to record, track, and report every transfer of cannabis product within the operation, oftentimes on pen and paper. This was a challenge, especially when considering the added layer of tax reporting and the opportunity for human error. Now, cannabis delivery services can use WebJoint to manage every aspect of the business. WebJoint provides a turn-key technology infrastructure to run delivery services from A to Z. Operators are given eCommerce sites for consumer ordering, which is integrated into the WebJoint backend that encompasses the inventory and driver fleet management tools that report to state-mandated seed-to-sale tracking systems for compliance.

According to testimonies on WebJoint’s StartEngine page, both The Source SLO, a cannabis retailer and Lakeside Remedy, a cannabis delivery service, were able to increase sales by up to 3 times and 10 times the daily volume, an outstanding return for both verticals. 

WebJoint monetizes its software services through 3 revenue streams. SaaS fees apply to both its Delivery Software Suite and its Direct-to-Consumer platform, and a flat service fee applies to customers who order through their platform.

With over $161 million orders processed in California alone, WebJoint is now looking to expand into the 24 other states that allow legal cannabis delivery. As it expands, it will take with it the notion that the cannabis space does not belong to only retailers and producers.

You can learn more about WebJoint and its offerings here.

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.