Uber Forays Into Canada’s Cannabis Market With Dispensary Partnership In Ontario

Popular ride-sharing company Uber made a name for itself as a rival to taxi companies, offering everyday drivers for people looking for rides across their cities and beyond. The platform then expanded to a delivery service, where users could order from dozens of restaurants and grocery stores in their areas with a couple taps on a smartphone app.

On Monday, the San Francisco-based company added a new feather to its cap: cannabis. It launched a partnership with Ontario-based dispensary chain Tokyo Smoke, and may soon expand across the country if its soft launch succeeds.

Uber Eats began including Tokyo Smoke on its platform Monday as a pickup-only service exclusive to the company’s stores in Ontario province, which includes Toronto and its surrounding cities.

Tokyo Smoke has more than 25 open stores in the province, and users can order a variety of CBD and recreational cannabis products — including flower, concentrates, vapes, edibles and oils — in addition to popular snack foods like chips, noodles, popcorn and cereals.

It’s perhaps the first step towards the company’s long-contemplated goal of expanding into cannabis pickup and delivery. In addition to Canada, the company has voiced its goal to eventually list cannabis retailers in the United States.

“When federal laws come into play, we’re absolutely going to take a look at it,” Uber CEO Dana Khosrowshahi said in an interview with CNBC earlier this year.

Over three years since Canada legalized recreational cannabis, the country is still fighting a rampant black market. Data analytics firms estimate anywhere from 35 to 50 percent of all marijuana sales come from illegal sellers.

An Uber spokesperson told Reuters on Monday that its partnership with Tokyo Smoke will make it easier for people to buy legally, thus helping fuel the regulated market and ensuring more people purchase safe, lab-tested products. The spokesperson would not commit to future expansion nor comment on any plans beyond the company’s Tokyo Smoke partnership.

Legal cannabis sales are estimated to tally $4 billion this year in Canada and reach $6.7 billion annually in the next five years, according to BDS Analytics. Cannabis sales in the United States reached $18 billion in 2020, and are forecasted to reach $24.9 billion in 2021.