MJBizMag July 2021 - 44

SCALE
HOW IT
SUITS YOU
mile delivery business, " Berk said. " I also
knew from building Osmio that it would
take two years, and I felt like we didn't
have two years. "
To shave time off the process, Berk
sought to acquire a cannabis delivery
company, and he found one in Driven
Deliveries. At the time, Driven was the
second-largest cannabis delivery company
in California, with 250 drivers, roughly
500 SKUs and 25 vendors on the platform.
The deal-valued at $31 million when
it was announced-closed Dec. 30, 2020,
and the company became known as
Driven by Stem.
" They were acting almost like an
Amazon, where they would bring the
products into their distribution centers
and do a B2C delivery. We really liked
that model, so we acquired them. Now
our goal is to expand that platform, "
Berk said.
The idea is to expand Driven into
new markets and go deeper in the
states where the company already has
a footprint.
" We will lead with e-commerce and
delivery, and then right behind that
will be all of our brands, knowledge,
know-how and IP. So we want to get
connectivity with the consumer, No. 1,
and then be able to bring right behind
it our own products, " Berk said. " It's
innovative, it's disruptive. ... And it helps
give us a competitive advantage. It's very
important having that connectivity to the
consumer day-in and day-out. "
The acquisition of Driven played to
Berk's strength as an e-commerce and
delivery pioneer in another industry. It
also meant he could provide answers
to questions about user interface, SEO
strategy, logistics, artificial intelligence
technology, selecting and coordinating
routes, crafting standard operating
procedures, public relations and
marketing strategy and more.
OREGON REPRISED
The first test of this strategy took place
this May, when Driven launched its
delivery services in Oregon. It also
44 MJBizMagazine | July 2021
announced that it would expand into
Michigan by Labor Day.
To prepare for the launch of Driven by
Stem delivery in Oregon, Berk said his
team spent April and May buying cars,
outfitting them with lockboxes and GPS
tracking, hiring and training drivers,
logistics coordinators and a pick-andpack
team, plus obtaining insurance and
payroll processing. The company also
integrated its back-end technology with
Metrc, the seed-to-sale system mandated
in Oregon, so that when users come into
the e-commerce and delivery portal, they
can pull up Driven by Stem's menu in
real time.
At press time, Driven by Stem
engineers were building the front-end
interface. " So, when a user comes in, we'll
know who they are, what city they are
in, user preferences, whether they are in
the delivery zone and any sort of specials
for the day, " Berk explained. " Once that
component is completed, then we will be
able to execute. "
DEMAND-DRIVEN
While Berk has decided that Driven
will be the battering ram that takes his
company into other states, he must now
decide what markets to enter based on
factors such as demand.
" We look at the demand curve and
make sure that there is a need and a
want for this sort of service, which we
believe most states have, " Berk said.
" Any type of licensing opportunities that
are available. And then, can we execute
in that market in a cost-efficient way?
All three of those things play into where
we're going to go next. "
Markets that Berk's company likes
include Colorado, Illinois, Maryland,
New York, Virginia and Washington DC
because of high demand.
" It's the same model: same cars, same
lockboxes, same hiring practices, same
interview processes, " Berk said. " It's a
rinse-and-repeat model. And that really
makes the scaling a lot more
cost effective. "
When starting a marijuana business about five years ago, Driven by Stem CEO Adam Berk first
purchased two cultivation companies in Oregon. Photo by Bob Williams

MJBizMag July 2021

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