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Ready to Go Mobile: Demand for Delivery on the Rise

Delivery is a dirty word in the cannabis industry. It is the red-headed step-child of brick and mortar retail dispensaries. But, is there really a reason for the tough treatment of this relatively innocent bystander? Everyone wants convenient deliveries and recognizes the value of service at home, but few want to allow specific delivery licenses.

However, deliveries can be controlled and regulated in the same way as store shopping and purchasing. And beyond cannabis, you don’t have to look very far to see that a delivery business can be a safe and viable operation (pharmaceuticals, alcohol, etc.). There’s not much question that delivery has a place in our society, and an increasing value to American consumers.

Let’s go down the rabbit hole a little and explore what it means to operate a cannabis delivery.

Mobile display case

There are two basic business models for a cannabis delivery: “Bag and Carry”, where customers place orders for specific products they want delivered (traditional delivery model), or “Display Case / Mobile Dispensary”, where customers choose in person from a selection in a mobile display. And of course, there are advantages and disadvantages to each.

As a quick note, I actually have experience with both of these models because we have used both in my delivery (M Delivers in California). We now use AutoCAD engineered laser-cut foams inside die-cast cases of our own design, and those fit neatly into pizza bags to look like we are just delivering pizza. We’re a little ahead of the curve, but have proven success with both models, and both models can be favorable when properly managed.

In order to start a delivery, you will need at least one person to be a driver. You need a person to answer calls and take the delivery order. You need a person to package and prepare products for the deliveries, but this can be the same person who is answering your calls. Since it will be slow in the beginning, you can have your management person ordering product, answering phones, and preparing orders. So, surprisingly, two people are all you really need to start a fledgling delivery operation. Scaling from there is relatively easy, and mostly just requires additional drivers.

Operationally, you won’t need complex systems or serious capital. You need employees. You need product to sell. You need somewhere to work. You should also use a point-of-sale system like Meadow, MJ Freeway, etc. to track all inventory and sales so that nothing gets missed. Once you have these things, you just need a phone number, an email address, and a computer.

In evaluating delivery, you will need to pick a delivery business model, and there are benefits to each. In a mobile dispensary, your drivers carry product with them, and drive from delivery to delivery. This helps decrease delivery times, but drivers can only carry a controlled selection of products because of the physical constraints of the display case. Bag-and-carry delivery businesses can offer a much larger selection, but the downside is that their delivery drivers need to go back and forth from customer to hub for every order.

Mobile dispensary offers a fantastic opportunity for in-person customer service though, and you can make sure the client is happy with their choice before the driver leaves. It also offers a much better opportunity for up-sell because you have additional enticing options literally at their fingertips. The downside is that you need to have a lot more inventory, because every driver will be carrying a selection of stock with them.

So, there’s the good, the bad, and now let’s talk about the ugly.

Ok, so what are the concerns? Robbery. Car accidents. Other liabilities. Product spoiling out in the heat. Really, just the normal things that any delivery business faces. These are things that can all be overcome with insurance, intelligent preparation, and careful business control.

UPS boasts they deliver and average of 15.8 million packages per day. If they can deliver 475,000,000 packages per month, I am guessing you can figure out how to make at least a small delivery operation work.

This all sounds manageable, but why even set up a delivery? Every store has physical limitations in how many people can visit at a given moment in time, and many stores have issues with limited parking. There are also limits to how many people have the ability to make it to a store, because of financial constraints or physical disabilities. There are also people (like me) who are just busy and prefer to save time by getting things delivered for convenience.

Lastly, there are people who might consider your store too far to visit. For all of these reasons, delivery can help you better manage traffic in your store, increase your total sales, and expand your market footprint.

In every other aspect of our society, delivery is becoming the way of the future, and it’s inevitable it will be in cannabis as well. Doesn’t it make sense for us to get on this bus now? There should be a place for cannabis delivery in our markets, and it’s something we should all be considering.

Chris BoudreauChris Boudreau

Chris Boudreau

Chris Boudreau is a entrepreneur with over 15 years of corporate experience that includes senior management developing of a regional sales office for a national lender, executive management overseeing an entire bank loan portfolio, and operational management creating financial analysis models and reports for monitoring business performance. Chris co-founded and developed Calyx Brands, after several years of working in the cannabis space and recognizing the retail dispensary need for a compliant and well developed channel of intelligent marijuana products. Currently serves as Founder & CEO at Sunstone Distribution.

This Post Has 2 Comments
  1. Chris – I would like to speak with you about the transportation guidelines in the state of California. On your website it doesn’t say what your operators license is to transport in the state? Do you have those now or is that “coming soon” as well?

    The reason we ask is we find way too often companies are trying to transport product and are doing so without being compliant to state laws. You may have these and it was left out of the article and on your website – but you may want to make people aware that they need these to be legal.

    Recently a transport company was incarcerated because they lacked the proper permits and or insurance to transport. I value the effort to get things out in the open about delivery but I would caution advising people that there is a ton of money to be made as we have spent thousands to get the proper licenses and permits in place. Could you let us know where you are in this process? Do you have your licenses in place to do delivery if so great. If not – what is your opinion of the guidelines for transportation of product put forth by the BMRC in CA?

    That might help a bit. Good luck on your venture and we hope its a great success.

    Contact me with any questions and again – to growing a great business.

  2. A mobile delivery platform is a no brainer! Amazon proves this model daily. I’m in Southern Calif. It’s crazy to have to drive 15 miles in this traffic to a dispensary, check-in with their security and then wait for a budtender; we launched our own service. Licensing? Jeff Sessions? DEA? Insurance? The cities? Product & inventory? Huge questions, unknown and fraught with risks but our patients demand the service and we provide free product to our local hospital’s cancer support group.

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