Eaze hadn’t told the founders the big news when it invited them to an event this week at the new cannabiz space Green Street in Downtown LA. Then they walked into a room and a crowd of SoCal industry luminaries surprised them with new that they’re the third cohort of Momentum, Eaze’s equity accelerator program.
The group of 10 founders had been selected from almost 300 applicants. In the first cohort of the now 12-week program, which began in Fall 2019, all the entrepreneurs were from California. The new group includes members from Michigan, Colorado, Massachusetts and New Jersey, as befits an increasingly national industry.
Instead of taking an equity stake in the companies, Eaze gives each of them $50,000, no-strings attached, and puts them through a now virtual business boot camp. The delivery app also promises to open its network and expertise to the new group.
- Eaze is poised to become the country’s largest delivery service after announcing plans to acquire Colorado-based MSO Green Dragon last year.
Kiki Keith, who was in the second cohort and now owns the Gorilla Rx dispensary in south LA, says the program helped her raise money and access the human capital she needed to run her own business, rather than take on a partners brand. She plans to release a Gorilla Rx infused drink this summer.
- Welcoming the new group, she exorted them to take advantage of the opportunity before them. “I came in with a plan y’all.” She reminded them that their businesses can support their communities.
Jennifer Lujan, who runs the Momentum program at Eaze, emphasized that there’s a business case for the program. Several founders from the earlier Momentum cohorts have made it on to Eaze’s social equity menu, which the company says has generated more than $11M in sales since the program launched in 2019.
- That doesn’t include the success of other participants which aren’t a product brand.
- Momentum brands now available in the Eaze store include Blaqstar Farms, dreamt.
- Whitney Beatty, who was in the second cohort, has opened the south LA dispensary Josephine & Billie’s which received a social equity investment from vertically integrated California player The Parent Company. Like Gorilla Rx, the shop carries several Momentum products.
No doubt the Momentum program has changed some founders lives. At the same time, the sales figure is sobering for those who want to see Black and brown entrepreneurs gain substantial market share in the cannabis industry:
- Eaze declined to reveal its total sales. But based on available data, including a 2020 report that the company had made 5M deliveries with an average ticket price of $85, the social equity menu likely amounts to less than 5% of Eaze’s total sales revenue.
- With few if any other companies of Eaze’s size mounting sustained equity efforts, and the general failure of government run equity programs to produce meaningful success stories, it appears unlikely that equity entrepreneurs account for even 1% of the $4B+ California market.
- Nothing I’ve heard suggests other state markets are doing substantially better.
The new cohort is:
- Sahir Al Salam of Detroit Life Lounge, an industry hangout in the motor city.
- Devin Alexander and Bryce Hall of Boston-area delivery service Rolling Releaf.
- Tiyahnn Bryant and Precious Osagie-Erese from New Jersey delivery service Roll Up Life.
- Michael Diaz with Denver area delivery service Better Days.
- Kim Dillon of LA beauty brand Frigg Wellness .
- Anthony Jenkins and Cartier Jenkins of Next Level Edibles out of Oakland.
- Eunice Kim, at SoCal digital cannabis concierge HiVi, (High Vibrations).
- Evelyn LaChapelle from Eighty Seven an Oakland-based accessories brand.
- Tasneem Mitchell of NEEM Wellness, Beyond Booze, a Massachusetts infused cocktail brand.
- Madison Shockley, Cadre (Los Angeles, CA)