The Great Delivery Debate

The cannabis industry has always been one shrouded in a cloud of misunderstanding, convoluted legal documents spanning thousands of pages, and applications processes that can costs tens of thousands of dollars.

Within Massachusetts there is a change coming to the adult and medical cannabis industry, the addition of delivery services.

Delivery services are nothing new, even in the cannabis industry, and as health and safety during the pandemic have become a priority for many consumers and businesses, delivery services in the cannabis space have come front and center within our state. Within Massachusetts the only business owners currently able to apply for delivery licenses are those who apply under the Social Equity or Economic Empowerment programs (those from communities that have been most affected by the War on Drugs over the years;) and there are two types of licenses delivery companies can apply for a “Warehouse” model and a “Courier” model.

The Warehouse model license allows the business to purchase products wholesale from cultivators within Massachusetts and sell them directly to the group’s customers. The Courier license allows the business to make deliveries for licensed dispensaries and retail facilities. Each license has its pros and cons and will take time, just as everything does within the Cannabis space, to fine tune and create a safe and fair delivery model.

Having talked with three dispensary presidents, Payton Shubrick of 6 Bricks, Ulysses Youngblood of Major Bloom and Professor at Clark University, and Patrick Jonsson of Curaleaf, all stress the issues of Courier Licensing and the strain of warehouse management for the consumer. “The Courier License alone is not a financially feasible model”, says Ulysses Youngblood, the costs associated with the courier model start immediately because the license holder is at the whim of dispensary pricing and then must add an additional fee to the consumer, which can add up very quickly with taxes and other charges. Another issue with this type of license is the employee cost. Two employees must deliver the products, and for certain SE and EE licensed groups that are already struggling with budgeting, these additional costs can make this type of license not as profitable as we have seen in other states.

The Warehouse License model has

“Additionally, because the delivery license does not restrict companies to a specific city or town learning how to effectively scale will be key.”

PAYTON SHUBRICK CEO OF SIX BRICK’S

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“The Courier

License alone is not a financially feasible model, the costs associated with the courier model start immediately because the license holder is at the whim of dispensary pricing and then must add an additional fee to the consumer, which can add up very quickly with taxes and other charges.”

ULYSSES YOUNGBLOOD

PRESIDENT OF MAJOR BLOOM PROFESSOR AT CLARK UNIVERSITY less downsides as the group can purchase wholesale from growers and sell to their own consumers, but this can be both taxing and expensive. Managing the products, keeping products on shelves for consumers, and managing incoming and outgoing products is a large operation that can require a large amount of expertise and manpower— again driving up costs. However, at the end of the day, the delivery services will provide a much-needed service to the consumers, as well as a safe and legal means to receive products from their favorite stores!

The biggest affects we will see in 2021 and beyond is the accessibility of cannabis products, a larger market for groups to target, and potentially a decrease in black market sales due to a wider service range. Payton Shubrick also commented that “due to the pandemic, we have seen the importance of being able to provide effective and efficient services for customers while being financially feasible”, and I am sure cannabis advocates and users can attest to the importance of safety and health during this time. According to Patrick Johnson, “While some consumers will like the convenience of ordering from home, we believe the majority of the market will still prefer the instore experience where customers can interact with dispensary associates and get a more complete view of the products available.” He also stated that “We (Curaleaf), do not believe there will be a major impact to the price as delivery comes online”.

Payton Shubrick of 6 Bricks also brought up an excellent point once delivery licenses are more common within the market; she stated, “From a business aspect, this will require many companies to try and become more vertically integrated so that they are not too dependent on one side of

ULYSSES YOUNGBLOOD

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the spectrum, the delivery/retail side or the manufacturing/ cultivation side of things”. Many companies and businesses within the market will have to obtain a license or an agreement otherwise potentially face a reduction in clients due to the convenience of delivery. Creating a delivery license system is an amazing opportunity for the businesses that acquire a license and for the customers convenience, but it will disrupt the current market and force many companies to change their marketing, branding, distribution, and pricing models.

Coming from California and seeing firsthand the changes delivery services can bring to the industry, I can attest to the tumult adding delivery services will cause from a safety and security standpoint to distribution of wealth and products, but the most important item that must be remembered is the consumers safety and comfort. Adding delivery licensing will have far reaching effects on the consumer and the individual business as it will increase the market value and client range, making the importance for brand recognition and product quality more important. California, just like Massachusetts, went through a month of learning how to do things right, and Massachusetts will be no different. As consumers and industry leaders we must all remember we are learning and growing the industry together and must support one another to ensure the industry’s success and the customer’s comfort!

Adding delivery licensing will have far reaching effects on the consumer and the individual business as it will increase the market value and client range, making the importance for brand recognition and product quality more important.

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Keep product out of reach of children. This product has not been analyzed or approved by the FDA. Marijuana can impair concentraaon, coordinaaon, and judgement. Recreaaonal and medical marijuana is available under MA law, however it is illegal under Federal Law and is not available to individuals under the age of 21. MA License RMD#1345.