Convenience is key when it comes to selling consumer goods, and cannabis is no exception. If you are considering opening a cannabis delivery business or adding a cannabis delivery component to your existing business, there are plenty of hoops to jump through, but you may be making a valuable investment.
Consumers across the U.S. are looking for fast and easy ways to get their favorite strains delivered to their doorstep, along with everything else. From restaurant food delivery, groceries, and meal kits, to retail goods, flowers, and countless other items, delivery services are booming. You can even purchase a car online and have it delivered directly to your home!
In one survey of 840 people, 90.1% of respondents said that cannabis delivery services were their primary means of buying cannabis during the pandemic. This reflected a 70% increase from the pre-pandemic era. Similarly, retail deliveries skyrocketed during 2020 and 2021 and have continued to remain significantly higher than in previous years.
What You Need to Know Before Starting Your Cannabis Delivery Business
Unfortunately, you can’t just start taking orders, load up the car, and head out the door. That being said, cannabis delivery does not have to be complicated. It’s important to have the right cannabis business compliance and logistics structure in place and the right partner to help you navigate the regulatory landscape.
According to Vangst’s State of the Cannabis Economy report, 52.4% of cannabis business owners found compliance and regulations as their prime challenge.
Every State Is Unique
Because cannabis is not federally regulated, it is up to each individual state to create and implement its own rules. There are currently only a handful of states that allow cannabis delivery and even fewer allow delivery to all legal adult consumers without additional restrictions.
As of this writing, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, Michigan, Missouri, Nevada, New Jersey, New Mexico, New York, Oregon, Rhode Island, Texas, and Vermont all have different degrees of cannabis delivery programs. Regulations may differ by jurisdiction, so even if your state has legalized cannabis delivery, it may not be allowed in certain areas. Learn more about your state’s cannabis delivery business regulations to understand your options and limitations.
Cannabis Delivery Licensing
Depending on where your business is located, you will need to acquire a specific license for cannabis delivery and ensure you understand all of the steps required to legally operate in the state. Some states have multiple delivery service types or may require multiple licenses.
For example, in Massachusetts, there are two different types of delivery providers. You must register as either a Marijuana Delivery Operator or a Courier. Delivery Operators are permitted to buy, sell, and deliver licensed wholesale cannabis. Couriers earn a fee for delivering cannabis products from licensed dispensaries to consumers. There is no state that allows any marijuana to be delivered across state lines, even if the business is licensed.
Cannabis Delivery Systems
The development of compliant cannabis delivery systems has both supported legalization efforts and helped establish customer loyalty for cannabis businesses that provide efficient service. It is crucial that any compliance software or system you choose meets the specific needs of both your customers and your state regulatory body.
Research shows that 82% of customers who are satisfied with a delivery service will share and recommend the brand to friends and family.
Having detailed standard operating procedures (SOPs) establishes processes that are not only compliant but also easy for both you and your customer to use. System malfunctions or programs that are difficult to use can delay deliveries and result in a poor customer experience. If placing their order becomes stressful, you can be sure your customers have other options.
Payment for Delivery
If you do not have an existing cannabis business, you may not be aware of the challenges associated with bank operations. The vast majority of card companies and banks will not allow cannabis businesses to open accounts. There are some exceptions, but many companies operate using cash payments and potentially e-wallet apps or custom delivery apps.
55% of Gen Zs and 60% of Millennials have more delivery apps than streaming services. Offering cannabis delivery may increase your marketability to younger consumers.
It is important that you stay flexible because things can change quickly in the cannabis industry. Recently proposed legislation could have a dramatic impact on the ability of U.S. cannabis companies to have access to additional banking options. Until then, bank compliance can also impact your ability to operate legally.
What’s the Difference Between Cannabis Delivery and Cannabis Transport?
There may be some confusion as to whether you need a cannabis delivery or cannabis transport license. Delivery licenses are generally from a business (wholesale or dispensary) to the consumer. Transport includes delivery from business to business such as from a grower to a processing facility, or from an edible manufacturer to a dispensary. These business types may seem similar but they have different licensing and regulatory requirements.
Cannabis Delivery Business Compliance
There are strict compliance regulations established across the cannabis industry. These include guidelines for marketing and advertising (including what is on your vehicles), document management, employee training, inventory tracking, security, and more. Your cannabis delivery business will also have to monitor and restrict how much product can be delivered per order according to state regulations. Drivers may have to obtain customer signatures, validate identification, and maintain thorough records, all while providing timely, friendly service.
98.1% of e-commerce consumers say delivery experience affects their loyalty towards a brand, according to a Last Mile Retail Study.
For most cannabis business owners, compliance is their least favorite and most stressful part of what they do. At Simplifya, we’re dedicated to making cannabis compliance easier, so you can focus on growing and enjoying your business.
Our user-friendly software is designed to streamline cannabis compliance and keep up with changing regulations. Compliance violations can put you at risk of fines, suspensions, and even revocation of your business license, not to mention damage to your reputation. When you are ready to launch your cannabis delivery business, we are here to help. Contact us to schedule a demo.