Despite the company’s name, business has been less than easy at Eaze since its launch in 2014. When the company pitched its business plan as the nascent cannabis industry was taking off, investors were tantalized by the opportunity to own a piece of an enterprise that projected moving $1 billion worth of product a year by 2020.
Since Eaze generated revenues without touching the plant—by charging dispensaries and brands for advertising space, data, and menu placement—it represented a relatively safe investment in the cannabis market. By 2017, though, the “Uber of weed” was losing roughly $1 million a month; the company lost $13 million in the fourth quarter of 2017 alone. When Eaze laid off 20 percent of its workforce in late 2019, it looked like yet another cannabis company that grew too big too fast.
At the same time, however, Eaze was plotting a major pivot in its business model and raising a new round of investment to pull off the plan. Instead of enabling other delivery services, Eaze decided to create a vertically integrated business model that would encompass everything from building new brands to delivering a top-notch selection of products directly to customers.
Enter Rogelio “Ro” Choy, who joined the company in 2018 as chief operating officer. A year later, he found himself in the chief executive officer’s chair, navigating Eaze’s shift from a technology platform to a vertically integrated, plant-touching operation.
As a tech entrepreneur in the early aughts, Choy saw his fair share of startup struggles and flameouts, but in Eaze he sees a great opportunity for a rebound. A $40-million investment round in February 2020 breathed new life into the company and gave Choy a legitimate shot to right the ship and bring Eaze 2.0 to fruition.
“We enter a second act starting this year, where we focus on our own vertical retail operations,” Choy said. “We’re no longer working with third-party retail operators, but we’re still in that transition. Our focus is to get to 100 percent of our operations owned by the end of the year and launch our own private-label brands. And that combination, we believe, will make us one of the largest, if not the largest, cannabis retailer in California by the end of the year. More importantly, though, we’ll reach profitability by no later than early next year.”
Known for solutions that yield results, Seth Yakatan has completed or advised on acquisitions and corporate finance transactions totaling over $3 billion. He is CEO of Katan Associates International—a financial strategy and merchant banking firm specializing in commercialization and asset monetization—especially those within life-science and e-commerce sectors.