Uber Stock Soars as Company Announces Plans to Deliver Marijuana via Uber Eats

May 16 , 2024

Los Angeles - Shares of Uber Technologies Inc. surged over 12% in trading today after the company announced plans to start delivering marijuana through its Uber Eats platform in states where recreational cannabis is legal.

The move comes as Uber looks for new revenue streams and ways to increase order volume for its food delivery service. A company spokesperson said marijuana delivery was a "logical next step" that will allow Uber to capitalize on two very popular consumer demands - food and cannabis.

"People are already using Uber Eats to get meals delivered and the same drivers are often getting orders for marijuana pickup and delivery from dispensaries," said Uber spokesperson Riley Thompson. "Combining those two very common requests into one seamless experience through our app just makes sense from an operational efficiency standpoint."

Thompson added that by bundling food and marijuana orders, Uber can reduce overall miles driven as well as fuel costs and emissions from having multiple cars on the road making separate deliveries. "It's a win for customers, drivers, and the environment," she said.

The marijuana delivery option will roll out in late 2024 starting in California, Colorado, Oregon and Washington - states where recreational cannabis has been legal for years. Customers 21 and older will need to verify their age in the Uber Eats app before placing an order.

Wall Street analysts applauded the move, saying it gives Uber an opportunity to grab market share in the rapidly growing legal cannabis industry projected to reach over $45 billion in annual sales by 2025.

"This is a smart play by Uber to get in on the ground floor of marijuana home delivery in a way that aligns with their existing logistics infrastructure and consumer base," said Andrew Chalkin, an analyst who covers Uber at Piper Sandler.

Kate Laurensen