Surprised That Weed Delivery Hasn’t Taken Off? You Shouldn’t Be

I remember when I first heard of delivering marijuana to customer homes. Like so many other people, I had visions of some company stepping up to be the Amazon of weed. Not only has that not happened, but weed delivery isn’t even close. It has not taken off as so many people thought it would.

If you are surprised by that, you shouldn’t be. There are particularly good reasons behind home delivery proving itself elusive to so many entrepreneurs. Address those reasons and cannabis delivery could explode exponentially.

The Federal Law Problem

For the record, none of what you read in this post is intended to imply that cannabis home delivery doesn’t exist. It does. Many states with legal marijuana programs allow home delivery to one extent or another. But nowhere is cannabis delivery as prevalent as food delivery, retail delivery, etc.

The biggest roadblock is federal law. It is a real problem. Marijuana is still illegal in Washington’s eyes. That makes it a liability for any insurance company or bank that would otherwise support a delivery service. Banks are out of the question until federal lawmakers do something with the SAFE Act. As for insurance companies, how many of them want the added risk of covering delivery companies?

Still a Cash-Only Business

Speaking of banks, a lack of access to traditional banking services dictates that the legal marijuana business be a cash-only business for the most part. Cash is fine as an instrument of legal tender. But holding large amounts of cash puts a business at risk.

Delivery drivers running around in vans full of marijuana and cash become targets for criminals. It is just not a good situation. While there are a small number of delivery companies willing to take the risk, there aren’t enough of them to make home delivery mainstream.

State Regulations Can Hamper Efficiency

Weed delivery can be made more difficult by state regulations. Simply put, regulations tend to hamper efficiency. That is the case in Utah, where the Beehive Farmacy near Logan, UT says that deliveries can only go to home addresses. In addition, patients must be there to physically accept packages in person.

The law exists to protect patients, delivery drivers, and pharmacies alike. But that does not change the fact that having to physically interact with patients makes delivery less efficient. If a driver reaches a patient’s house and she isn’t home, the trip was a waste of time. He’ll have to go back and try again later. That’s not efficient.

Then There Are Delivery Charges

Whether or not patients care about efficiency, they do care about cost. And one thing we can say for sure is that home delivery drives up prices. It has to. Someone needs to pay to cover delivery costs. We all know who that is: the customer.

To be honest, this could be the biggest issue of all. Illicit weed is already cheaper than legal weed sold in licensed dispensaries and pharmacies. Illicit operators do not pay taxes. They don’t support large payrolls or offer benefits. They don’t have the same overhead expenses. They can sell cheaper because their total cost of producing weed is so much lower.

Legal operators must charge higher prices to cover their costs. Throw in additional delivery charges and it is difficult to compete with black marketers. And yes, there are illicit operators who will actually deliver their product. So it’s a double-edged sword.

Cannabis home delivery hasn’t taken off like so many people thought would. But when you step back and look at the reasons, it all makes sense.