Company Name: SpeedWeed Medical Marijuana Delivery
Ownership Structure: Non-profit Collective Corporation
CEO/Management Team: AJ Gentile, General Management, and Jen Gentile, Operations & Marketing, AJ’s brother Gene Gentile is the company’s front man on the LA scene.
Headquarters: Agoura Hills, CA
Industry Segment/Category: Medical Marijuana Cooperative/Medical Cannabis Delivery Service
Current Markets served: California (L.A. (six current/opening two more) and Orange County, San Diego, San Francisco, Santa Barbara, Sacramento, Fresno and Palm Springs in 2015.
Number of employees: 50 plus
Market Strategy/Goal: SpeedWeed is California’s largest on-demand medical marijuana delivery service. Unlike other delivery services and “Uber for weed” type apps, SpeedWeed serves the upscale consumer by providing a consistent customer experience by employing committed, well-trained, staff dedicated to client satisfaction. SpeedWeed deploys a robust menu of flowers, concentrates, edibles and gear including the most respected, trusted product brands in the industry.
2014 Revenues: $2.5 million (L.A.)
Current # of patients: 24,000
Current Product Mix: Broad mix of edibles, oils, concentrates; weed strains, gear & accessories
Some 60 products a day sweet spot: 15-20 flowers, 5-10 oils, concentrates & consumption gear, the rest in ancillary products
Key Suppliers: Kiva Chocolate, Cheeba Chews, Sensi Chews, Running Leaf Baked Bears (gummy bears), Edipure, Loud Pack concentrates, Ed Rosenthal’s Cones & Minis (by Medi-Cone), Honey Vape Vaporizers.
Lab Testing Service Providers: SC Labs, The Werc Shop
Growth markets: CA, Washington, Las Vegas, AK, NJ, WI, several Native American Tribes
Expansion Plans: Opening San Diego, San Francisco, Santa Barbara, Sacramento, Fresno and Palm Springs in 2015
- Investing in several genetics labs
- Building multiple grow operations
- Spinning off their proprietary software platform for resale.
Financing strategy: To date, from operations and personal capital. They are currently raising money through a private placement offering and plan on going public at some point (hopefully in 2016), and are already preparing for that by self-imposed best practices that mirror SEC requirements.
What do you get when you combine a Logistics Company, a Technology Company and a Medical Marijuana Distributor? SpeedWeed
When I was looking into launching a B-to-B website to cover the Cannabis Industry, one of the first things I did was size the market by looking at Weedmaps dispensary listings and literally counting them one by one, state by state. As I reviewed California, I was stunned by the number of dispensaries until I realized that a significant number of them were medical cannabis delivery services.
Fast forward to today and there are some 350 delivery services in Los Angeles and as SpeedWeed CEO AJ Gentile and his wife and partner Jen (she handles operations) told me during the interview for this article, most follow the “Ice Cream Truck model” and are basically illegal. This fact alone, and an ad they saw on Weedmaps promoting a way to make $10,000 a month on three (3) orders a day, led them to launching a legal delivery service in October of 2012 that now grosses more than $2.5 million a year and SpeedWeed has become a company/brand for Medical Marijuana Delivery that is part logistics company, part technology company, and one of the fastest growing businesses in the Cannabis Industry.
SpeedWeed began after the family (AJ’s brother Gene is the social face and front man of the business) started an edibles company in Los Angeles in 2011 based on R&D they did on the extraction business. With a marketing and branding background, the team created the “Baked Bears” gummy bear brand and was able to attain distribution in 60 dispensaries. After seeing the Weedmaps ad, their attention turned to starting a delivery service and AJ built a website. Within a day, they had their first order.
They decided early on at SpeedWeed that their differentiation from the existing competition would be based on:
- Compliance with all L.A. regulations (i.e.: only serving licensed patients);
- Setting up a Non-profit Collective Corporation;
- Attaining the proper business licenses; and,
- Obtaining their doctor’s card and collective membership.
They also decided early on that they would build their brand and differentiate their service by;
- Stressing convenience and customer service (more on this below);
- Only hiring carefully vetted drivers with impeccable records and clean cut appearances;
- Optimizing their product mix (best practices indicate that 60 products carried by Annex appears to be the optimal mix). SpeedWeed carries 15-20 different flowers, and 5-10 oils and concentrates; the balance of the mix is represented by edibles, consumption gear, and accessories.
- Providing top brands like Baked Bears (in-house), Cheeba Chews, Kiva, Sensi Chews, Edipure, Loud Pack Concentrates, Ed Rosenthal’s cones & minis (Medi-Cone), and Honey Vape Vaporizers
From a logistics perspective, SpeedWeed decided to house their inventory at a central location and stock each of their market annexes (typically 2000 SF facilities) daily so that they would serve the communities located in concentric circles within each annex’s delivery zone. They maximize the distribution fields in annex markets with their proprietary inventory management and logistics software that they plan on rolling out on its own in the future.
Like many of their peers, SpeedWeed has embraced supporting causes that position the company as a good corporate citizen. Jen pre-emptively started BAAD.org, a non-profit social responsibility group of businesses against altered driving that mirrors the Anheuser Busch program for responsible drinking. In fact, in no way do they advocate smoking driving and have gotten many Southern California businesses involved.
They also believe that their most important asset is the people involved with their service, whether it is customers or their human capital. SpeedWeed also promotes from within and all employees have started out as drivers.
Growth will come by opening up additional annexes and warehouse facilities in California. They are targeting San Diego, San Francisco, San Jose, Santa Barbara, Sacramento, Palm Springs and Fresno markets in 2015; are investing in a genetics lab to create new products and formulas; and are looking to enter Southern Oregon and Seattle through partnerships, Las Vegas, AK, NJ, WI, and several sovereign Native American Nations this year.
At a recent Arcview Group event, Steve DeAngelo, CEO of Harborside Health Center, indicated that as much as 20 percent of their annual $30 million in sales came from their delivery service, which bodes well for the Gentile’s strategy to become the FedEx of the marijuana delivery services. At SpeedWeed, they have laid a solid foundation in pursuing that goal and their shared vision.