Entrepreneurs and businessmen watch market trends before investing / starting a business. Some of the trends are indicative of things to grow big in the future. One such trends is Cannabis or Marijuana delivery. Another trend that is rising is the online online delivery of alcohol.
Smart people will recognize the potential in these areas and will start a business of their own while things are in the nascent stage. This article deals with how to launch a cannabis delivery business in the US. It will act as a guide to help you get started.
First let’s take a look at…
Why Should You Start A Marijuana Delivery Business?
Opening a marijuana delivery business has never seemed more exciting or a necessity for existing cannabis retailers. The business model is the same as any other delivery based business with the exception that it is only available to people of legal age. Even though the pandemic is slowly ebbing, consumers are still wary of venturing out to stores and prefer the online delivery of Cannabis. The past 2 years has shifted buying habits and this will become the norm – online buying.
The time is NOW.
Statistics To Make You Think Seriously About Selling Online
Legal sales across the U.S.
36 states allow for medical sales : record of $17.5 billion – 46% increase from 2019, according to a new report.
Colorado – Sales increased by 26% to reach $2.2 billion
Oregon – Sales hit $1.1 billion, a 29% increase over 2019
Illinois – Saw the largest dollar gain in 2020, rising by $784 million. It is doing over $1 billion in sales.
California – Grew sales by $586 million – the country’s largest cannabis economy is at $3.5 billion,
Florida saw a $473 million increase.
About 30% of consumers surveyed by BDSA said they shop for cannabis products more often
25% of consumers say their cannabis usage has increased since before the pandemic.
In that have legalized recreational sales, 43% use cannabis, up from 38%.
In Colorado, where market penetration is greatest in the country, 48% of Coloradans imbibe.
How To Start A Cannabis Delivery Business In The US?
What Type of Marijuana Delivery Services Would You Want To Offer?
There are three main types of cannabis delivery services.
- The local courier companies that deliver for local marijuana dispensaries – which is actually not the best option as it may lead to time delays.
- Deploy your own in-house delivery service – Good option but difficult to manage the overhead of drivers if the business expands.
- Develop your own cannabis delivery software app – It allows you total control as most of it is automated. You can hire free lancer drivers to deliver them,
Understand these and you will know which direction to take.
Know the Laws Fully As It Will help You Operate Smoothly
Arm yourself with the rules and regulations of the place in the state where marijuana is legal. You need to adhere to the rules or you will end up with high fines or even a suspension of your marijuana business license.
- Only medical marijuana orders are allowed for delivery in Arizona, even though you can sell both medicinal and recreational marijuana.
- Limit of the amount a client can buy at a time – In New York, an individual can possess up to 3 ounces of recreational marijuana.
- In Boston, marijuana courier companies need to have two employees on every delivery, wearing body cameras during the drop-off.
Pizza delivery model – A driver can only carry one customer order on them at a time. After completing the delivery he heads back to the store/dispensary to pick up his next order.
Ice cream truck model – A driver can carry multiple orders at once or even additional inventory. He returns at the end of the day or until all orders have been delivered.
Devise A Water Tight Operations Plan For Delivery
This is a crucial part as it helps you formulate how you will go about the operations.
Things to be considered are:
- Receiving orders – Do you have an app or website that accepts online orders? Or do you have a method that allows you to create delivery orders.
- How will you actually deliver? Look up on the laws in your state. There are 2 models of delivery – “ice cream truck” model – A truck with a full inventory of products drives from one location to the next, returning to a dispensary only at the end of the shift. Second is the “Pizz truck model” – Single delivery.
- Will you want to deliver the items as soon as you receive the order or will you wait until you have reached a specific number of orders and then deliver them altogether?
- Vehicles used for delivery – what kind of vehicle will be used and what changes you need to make to them so that they comply with state law?
- Who will perform the deliveries? Do you need to hire an additional person?
- How will you ensure the safety and security of the vehicle and of its inventory?
- Have you outlines the process once a delivery order is received? How do you gather and prepare the products for transport and securely get them out to the car?
- How do you handle cash transactions? How much change should drivers carry with them?
Obtain Your License
This can best be done by browsing your state or city’s cannabis website and see if they’re accepting applications for cannabis delivery licenses. If they are you need to fill out all the required forms.
The forms you fill out typically include:
- A business plan
- A delivery plan (described above) – detailing how you intend to transport cannabis, including the processes you’ll use
- Details of the vehicles you’ll be using – make and model, year, license plates
- A tracking plan – detailing how you’ll track and keep records of all deliveries
- A security plan – how you intend on protecting your products and drivers from theft
Make sure to read your state or city’s laws closely to ensure your plans cover all the required processes and rules. Get some help from a cannabis consultant or lawyer if you need it.
You may or may not have to already have your company vehicles ready for inspection before your delivery licenses can be approved.
Cost Of A License For Online Delivery Of Cannabis
The cost of a state license varies according to the type of license you’re applying for as each city and county has its own licensing fees.
There are two basic types of license fees in general.
Application fee – paid when the application is submitted and covers the cost of having the regulating body assess and process the application.
Actual license fee – paid after the application is granted.
Company Vehicles For Delivery
You cannot use your personal cars to make deliveries, so you’ll need to procure at least one company vehicle if you don’t already have one. It must be clean and professional-looking.
Depending on the state, you may be required to customize your vehicle with:
- A secure lockbox to store cannabis products
- A GPS tracker (the one built in to your phone and app may suffice)
- Cameras pointing both inside and outside the vehicle
You cannot put any company branding or any indication that there are cannabis products in the car as it may become a safety issue. Also this will avoid the likelihood of people robbing cannabis delivery vehicles to resell the product on the street.
Get Delivery Software
Your dispensary’s POS software or app may already have all the delivery features you need. Check if your app software has the delivery features you need. These include:
- The ability to create delivery orders
- A mobile app so drivers can track deliveries on the go
- An integrated ID scanner
- Integration with the state tracking system such as Metrc.
There are also specialty delivery applications like Eaze and Weedmaps that can integrate with your POS software if you need more delivery features for your your cannabis delivery business in the US.
You May Want To Consider Third-Party Delivery Service
This is a good way to outsource your delivery to a third-party company, like the ones used by restaurants like Doordash and Postmates. Third party will relive you of the burden of having to purchase and customize a company vehicle. Also the onus of timely deliveries will be on them and not you. But this means you have to share your revenue with someone else, which you may not want to do.
Market Your Business Well
Without proper marketing your business will be buried under other competing businesses. Before your start marketing check out the regulations as they are pretty strict. Be sure to read up on them and make sure you’re complying with them whatever you do.
Depending on your target audience, you may consider methods like billboards, social media, Google Ads and other apps like Weedmaps, etc.
Give time to your delivery operations to start and flourish. You might not get delivery requests as soon as you launch your services. You will discover that it will take time and lot of effort to develop a loyal customer base.