Marijuana delivered to your home Eaze lays off 500 employees, announces closure at the end of the year

Nicole Elliott, the head of California’s Department of Cannabis Control, is amidst unsettling developments concerning Eaze, the state’s largest cannabis delivery service. The company recently revealed plans to lay off 500 employees and shut down completely by the end of the year. This turn of events highlights the ongoing challenges within the cannabis industry, where achieving profitability remains a struggle, leading to numerous closures, including that of Eaze.

Eaze, once celebrated as the “Uber of weed” with a peak valuation of $700 million, shared the grim news on October 6th through a LinkedIn post by CEO Cory Azzalino. The announcement confirmed that the closure would take effect immediately, with a full shutdown planned for December 31st.

The collapse of California’s cannabis market has been notable, with other major players like MedMen also closing their doors earlier this year. Furthermore, Herbl, which was once the state’s largest cannabis distributor, ceased operations last year.

Founded in 2014, Eaze was one of the pioneers in California’s cannabis landscape. Following the legalization of recreational cannabis in 2018, the company experienced rapid growth and ultimately secured its position as the largest cannabis delivery service in the world. However, it has faced numerous hurdles, including a fraud conviction against former consultant Hamid Akhavan in 2021.

Nearly 500 employees affected by the layoffs were members of the United Food Commercial Workers International Union. Jim Araby, the union’s vice president, noted that Eaze might potentially revive under a different name post-closure. According to Eaze executives, there may also be opportunities for displaced workers to join a new company if it emerges.

Araby stressed that Eaze’s collapse underscores the persistent dysfunction within California’s legal cannabis market, which he attributes to high taxes and lax enforcement against illegal operators. Legal businesses have voiced concerns that these illegal entities are not charging taxes on cannabis, creating an uneven playing field.

He called on Governor Gavin Newsom and state legislators to take the situation seriously and to enhance enforcement against illegal operators. Notably, it appears that Governor Newsom may have been aware of Eaze’s closure ahead of time, as indicated by Nicole Elliott’s “like” on Azzalino’s announcement post.