Eaze shutting down? After a decade of business, one of thee biggest and by far the largest California based cannabis delivery company is all set to shut its door. Eaze has its future written with a lay off of about 500 employees who will lose their source of income by Dec. 31st, as confirmed by CEO Cory Azzaliano.
Once valued at $700 million, Eaze is finding it not easy to run this operations which was one of the biggest in California. Eaze had an early mover advantage and soon established post legalisation of recreational cannabis in the USA back in 2014 and was quick to expand into California in 2018 once the state had declared recreational cannabis as legal.
An airplane descends to land at Los Angeles International Airport above a billboard advertising the marijuana delivery service Eaze on July 12, 2018, in Los Angeles.
Mario Tama/Getty Images News
Why is Eaze shutting down?
Eaze faced early issues in 2021 when the former CEO was found guilty of bank frauds. This was complemented by tech billionaire who foreclosed on Eaze when it defaulted on a massive $36.9 million loan. The company was later acquired by FoundersJT for $56 million USD.
High running cost is termed as one of the many reasons why Eaze is shutting down. We have seen the same happening with companies like grassdoor and few more. Since the legalisation, investors have been heavily investing on cannabis companies with an intent of growing their funds substantially however due to these easy access of funds and crazy valuations, companies invested heavily on expenditure which were never meant to be recovered. We have seen these happening year on year however cannabis companies seems to not learn from their competitor’s mistakes.
Whatever could be the errors, the future of Eaze and its 500 employees remains uncertain or can the Florida election have any impact on this decision or would Ease actually shut down? Please let us know in your comments.
