Eaze, once valued at $700 million, will be shutting down operations completely by December 31, 2024, following the foreclosure of its assets.
Eaze Technologies, once the largest cannabis delivery company in California, will cease operations by December 31, 2024.
In a letter shared on LinkedIn, CEO Cory Azzalino confirmed the company’s closure. “Due to the ongoing challenges of the California cannabis market, the company’s assets were foreclosed on by our lenders on August 6, 2024.”
According to United Food and Commercial Workers (UFCW), nearly 500 workers will be laid off, many of whom are represented by the union, reported SFGate.
Founded in 2014, Eaze expanded rapidly after the 2018 legalization of recreational cannabis in California, but financial struggles, ownership changes and legal battles contributed to its decline.
Turbulent Financial History
Eaze's financial troubles have been well-documented over the years. Once valued at $700 million and dubbed the "Uber of Weed," the company faced growing hurdles, including the resignation of a former CEO due to a 2021 bank fraud conviction.
This year tech billionaire James Henry Clark foreclosed on Eaze after it defaulted on a $36.9 million loan. Clark's firm, FoundersJT, later acquired the company for $56 million at auction, marking another chapter of turbulence for the cannabis delivery giant, reported MJBizDaily.
Despite the change in ownership, Eaze has been unable to recover in the face of high operating costs, stringent regulations and competition by both the hemp industry and the unlicensed weed market undercutting demand in California.
Uncertain Future
The future of Eaze now rests in the hands of its new owners.
Jim Araby, a representative of UFCW, expressed concern for workers impacted by this closure and called for more legislative action to address the structural issues affecting California's cannabis market. Eaze is expected to provide an update to employees by November 15, 2024.
Azzalino also told MJBizDaily that a final decision about whether to reopen some depots or permanently shut them down will depend on the results of Florida's November ballot initiative to legalize adult-use cannabis.
While some of the nearly 500 workers could be rehired in 2025, the company's future remains uncertain.
