Cannabis delivery is a challenge. There are very low margins and a lot of extra steps to take. While it was initially received with fanfare in the provinces that have allowed cannabis stores to deliver cannabis, many retailers now would rather not touch it at all.
However, at least one retailer in downtown Toronto says he thinks he has found a way to not only make cannabis delivery work but also make it the main focus of his business.
Mike Dunn and his partner Brooke Silversides are the founders of 1922 Cannabis, located just off Queen Street, a half block from Moss Park in Toronto. Licensed in June 2020, Dunn says he faced many of the same challenges other cannabis stores face in the highly saturated Toronto market with high rents and tight margins.
He was able to distinguish 1922 by curating quality products, and when cannabis delivery became an option for cannabis shops in Ontario in 2022, he and his partner saw a chance to extend that curated experience through delivery. (Ontario first began temporarily allowing cannabis delivery and curb-side pick-up in early 2020 due to COVID-19 restrictions. In early 2022, the rules were made permanent).
“Our focus is on being fast and free, which we achieved by leaning into eco-friendly technology, and that’s the proof of concept we’ve brought to life,” says Dunn.
“Our journey has been a natural evolution. We began as a retail operator, then saw an opportunity to lean into delivery as this new on demand economy grew. Partnering with a world-class technology provider like Uber Eats allowed us to refine and scale our buyer experience to create a highly efficient delivery service. Now, that delivery service is evolving further into a logistics-focused company, expanding what we can offer our clients and the market.”
“Our journey has been a natural evolution. We began as a retail operator, then saw an opportunity to lean into delivery as this new on demand economy grew.”
Where many of his peers have found frustrations with delivery—namely the added costs for a potentially negligible increase in sales, if at all—Dunn says he and Silversides leaned into a streamlined, curated menu and fast delivery service that appears to be paying off—the business recently celebrated 10,000 cannabis deliveries in the Toronto area in the past year.
One of the ways 1922 has been able to become so successful with deliveries is by simplifying the menu and buying experience, Dunn thinks. Instead of layers of menus and categories and choices, he says he believes consumers—his customers at least— want fewer choices, not more.
Dunn says he can cut unnecessary expenses by consistently carrying quality products and building up a core customer base through his retail store who trust that it will always be a good product no matter what they purchase. And by moving most of his sales to delivery, he can operate with an efficient level of store staff.
“It’s become too complicated to buy weed. It’s like rocket science. So, if you’re able to establish trust through repetition, then they trust your service and product. You want to get to the point where they ask you to just bring them stuff. I have maybe 30 customers where that’s my relationship with them now.”
“We’re almost reverting back to old school dealers,” he chuckles. “‘Just get me some nice weed’. And our customers know that we do.”
“Now we’ve taken geography out of that equation, you don’t have to be in our neighbourhood to get that experience from us. We can bring it to you.”
A key to that success, he says, has also been mastering his online presence to ensure new customers can find him, especially in a sea of illegal online stores with highly sophisticated web presence and SEO.
Partnering with Uber Eats, which began offering the product listings for cannabis stores on their app in October 2022, as well as Canadian retail data program Breadstack, were also key to this.
“Buying on Uber Eats is the easiest way to buy weed in the world. Partnering with a world-class technology vendor, I’ve learned so much in terms of how to refine our buyer experience.”
Delivering almost everything himself on an E-bike (he’s done 8,000 of the 10,000 deliveries) has helped keep costs low and also helped ensure fast delivery times, even in the often highly congested downtown Toronto area.
“We’re almost reverting back to old school dealers.”
Ideally, he sees the future of 1922 Cannabis as focussing almost entirely on delivery. Retail and staffing are costly in a space like Toronto, and he sees an emerging demand economy that he sees consumers quickly moving to.
If the regulations allowed it, he would like to operate smaller low-cost retail locations in the city that he could use as delivery hubs for his growing client base. He says he’s talked to the provincial regulator, the AGLC, about the issue but hasn’t seen any movement yet.
Still, he sees it as inevitable. Retail is tough, and Dunn sees the economy is moving to a delivery economy, saying he sees it worth three-quarters of a million dollars by 2027.
“People would just rather have their cannabis delivered to them. They order everything else online; they get groceries online, and presents online. Ordering some cannabis is no different.”
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