As of July 2021, only 5 states in the U.S. (Idaho, Kansas, South Carolina, Tennessee, and Wyoming) still hold laws making marijuana fully illegal. The remaining 45 states in the country have either decriminalized marijuana possession, legalized it for recreational use by adults, or legalized at least some forms of cannabis for medicinal use. As time goes on and attitudes towards the once-prohibited plant change, forward-thinking entrepreneurs have opened the doors for commercial sales. As a result, marijuana has transitioned into a fully-flowered industry in the U.S. Licensed businesses are primed to acquire and grow their share of the consumer market, oftentimes with rapid success.
One such business is Nug Avenue, a cannabis delivery company based in Los Angeles, Calif., that provides eligible customers with hand-selected products and carefully-crafted strains for local delivery. Despite only being in operation since February of 2021, Nug Avenue has grown from making only a handful of deliveries each day to over 200 daily deliveries.
A Budding Industry Ripe For the Picking
According to one report from BDS Analytics, the global marijuana industry is projected to reach more than $40 billion in value by 2024. The U.S. is expected to obtain roughly 73% of this value in both medical and recreational marijuana sales. (By 2024, sales at retail dispensaries are projected to reach approximately $13.9 billion for medical marijuana and $26.7 billion for adult use.) However, the same report also says that, “the delivery sub-market” of the marijuana industry in the U.S. will become “the highest, fastest growing stream in the market.”
Keeping on trend with industry projections, Nug Avenue has seen rapid growth, largely due to its operations as a fully licensed delivery service company in California’s marijuana market. Primarily functioning via their website, Nug Avenue lets eligible customers order hand-selected premium flower strains, as well as edibles, extracts, vapes and more. Same-day delivery to customers’ front doors is offered within the company’s service area throughout all of Los Angeles County. Orders aren’t simply left on a doorstep, either; they are hand-delivered to the person who placed the order.
“Thanks to companies like ours,” said Nug Avenue’s CMO Jamie Steigerwald earlier this year, “you no longer have to travel across town to refill your cannabis supply. You can just order online and have it hand-delivered to you at home. We pride ourselves on our professionalism — you’ll receive a discreet sealed pouch that won’t alarm your neighbors.”
Due to their success, Nug Avenue is currently making plans to expand their delivery services into Orange County and, eventually, further inland to communities where marijuana delivery is a legalized and licensed business practice.
Growing Amongst the Weeds
Perhaps one factor which makes Nug Avenue’s success in such a short amount of time all the more impressive is its rapid growth at scale, even as the number of unlicensed growers, manufacturers, and distributors – particularly in California – continues to swell. This is one of the biggest issues facing the marijuana industry today. In fact, as of 2019, it was estimated that under-the-table marijuana sales from unlicensed distributors outpaced legal marijuana sales in California nearly three times over.
As a result of this trend, California’s Gov. Gavin Newsom and the state legislature announced an initiative to approve $100 million in spending to help businesses similar to Nug Avenue go through the state’s approved licensing process.
Steigerwald has mentioned other issues within the marijuana industry that his company has faced, even in just a few short months. For instance, Nug Avenue’s Instagram account was recently shut down due to their affiliation with the cannabis space. However, the accounts of their product partners — such as Stiiizy and Weedmaps — remained live, as did the company’s Facebook account. Similar pressure rooted in outdated stigma from other industries not related to marijuana or cannabis delivery services – such as banking and telephone/internet service providers – can also affect companies in the marijuana industry.
In spite of these challenges, Nug Avenue has undoubtedly achieved quick success in an ever-growing and ever-changing industry. By offering eligible customers with hand selected marijuana products, deals, larger delivery areas, and faster delivery speeds, Nug Avenue has indeed positioned itself as an industry leader.