It seems strange that cannabis home delivery is still struggling to succeed at a time where more than three dozen states and the District of Columbia have legalized cannabis consumption in one form or another. But it is. The good news is that it will not struggle forever. Someone will come up with a workable business model that gets the ball rolling on a much larger scale.
Success is likely to be found in recreational states first. States with legal recreational marijuana tend to be less restrictive in their regulatory frameworks. Likewise, medical-only states tend to have regulations that make home delivery more difficult to pull off.
Regulatory Challenges Are Real
The first thing any new home delivery enterprise would have to deal with is the reality of regulatory challenges. Imagine a company wanting to establish the cannabis equivalent of Grubhub. Investing the amount of money necessary to build an app-based business of this nature would have to be justified by a strong multi-state market. But many states with legal marijuana programs do not allow app-based delivery services.
Likewise, regulations in Utah illustrate why success is more likely in recreational states. Utah is a medical-only state. Its regulations for home delivery are rather strict. So much so that establishing home delivery in the state is an expensive proposition. An entrepreneur must have significant funding to get a new delivery business off the ground.
Create an Online Marketplace
So, is there a way to set up a profitable home delivery system in states with recreational marijuana? That remains to be seen. But one of the latest business models seems like it would do quite well. The model involves creating an online marketplace in conjunction with local retailers.
The online marketplace acts as a digital flee market of sorts, where licensed cannabis dispensaries can market and sell their products. They would still have to sell products from their brick-and-mortar store as well. But through online sails, they can reach a larger market by offering both convenience and home delivery.
They Would Deliver Themselves
The key to this particular business model is each dispensary handling its own deliveries. So instead of customers buying through an app-based business that would turn around and purchase marijuana products from dispensaries and then deliver them, customers buy directly from the dispensaries. The dispensaries send their own delivery drivers out with packages.
This sort of model might work for medical cannabis dispensaries in Utah. But again, as Brigham City dispensary Beehive Farmacy points out, the expense involved in acquiring and equipping compliant vehicles is too costly. The market in Utah isn’t strong enough to justify such expense at the local level.
It is a different story in recreational states with fewer restrictions. But to make it work, medical cannabis pharmacies and recreational dispensaries would need the ability to hire drivers who could use their own vehicles, much the same way restaurants do. If vehicles equipped with specialized safety and security devices are required by law, pharmacies and dispensaries are right back in the same boat.
It Will Be a Thing, Eventually
At the rate lawmakers seem to be getting on board with medical and recreational cannabis, it seems only a matter of time before home delivery is a thing. It is going to be normal and culturally acceptable at some point.
In all likelihood, a delivery company in a recreational state will pave the way with a business model that works. Maybe that model will be the online marketplace model. Perhaps it will be something else entirely.