California’s new permanent regulations make it legal to deliver cannabis statewide.
Regardless of whether a customer lives in a municipality that prohibits cannabis locally, non-storefront delivery companies are able to serve these “cannabis deserts” and have cannabis shipped straight to their front door.
Not every client or patient feels comfortable to head into a dispensary and buy cannabis...or maybe they just don't have the time to make the trip.
Either way, adding delivery and online shopping can be a lucrative new revenue stream for many cannabis operators. It increases your throughput of customers per hour and can increase your revenue numbers.
But it takes some strategy – and some smart financial projections – to make delivery and online shopping work for your business.
Here’s what you need to know about online shopping and cannabis delivery.
Online Shopping in the Cannabis Marketing
Many cannabis operators get started in cannabis delivery by establishing their online presence.
However, there are certain caveats to promoting your business online you must know before investing in digital marketing.
First and foremost, there is no law that explicitly prohibits selling cannabis online. But, most states have restrictions around selling and buying to specific locations.
As a result, most cannabis operators use their online presence to promote their location, hours, pricing, and to sell cannabis-related products. Payments processing happens IRL upon completion of the transaction.
Beyond setting up a website, you should also become familiar with the restrictions to online advertising.
Social media platforms like Twitter and Facebook prohibit promoting the sale of cannabis – as does Google. You can use these platforms to build your brand, but offering cannabis for sale is a big no-no.
Each platform has a different use base and a different value proposition to the end user which is something you need to be very understanding of when creating social content. Use the specific context of each social platform to craft messages that are helpful information or beautiful pictures that increase the desire for your product.
Don't know what your social media strategy should be? Don't reinvent the wheel, simply go look at what your successful competitors are doing to kickstart your content game.
Now, if you're looking for sales, then advertise your product and delivery service on cannabis-specific sites like Weedmaps, Leafly, Stickyguide, and more. We recommend adding a pop-up to your website that asks user to confirm their birth date before entering the shopping portion of your page.
If you're going to do paid ads on any of these online platforms, please understand that you will likely not be able to write any of these expenses off because of IRC 280E.
Check Your State Regulations
Many other states that have a legal adult-use cannabis market allow cannabis delivery, though certain restrictions may apply.
For example, in Oregon, a cannabis retailer must have approval from the state’s cannabis Commission and may not carry more than $3000 in retail value worth of cannabis or cannabis products at one time.
While researching your state regulations, do some competitive analysis to make sure your delivery service is feasible.
California is a crowded market: the LA times reports that 128 permits have been issued statewide to allow dispensaries to deliver. Meanwhile, in Oregon, there are only six licensed delivery services in Portland due to low demand.
Cannabis Delivery Business Model
If the market looks relatively open and you have an established online presence, the next step is to create a business plan specifically targeted toward your delivery service.
You need to account for factors including:
- Vehicles, gas, and tolls
- Drivers and driver salary
- Driver safety and security
These costs can add up quickly, so some dispensaries partner with a third-party delivery service like Eaze to have them provide the link between the dispensary and the final sale.
Eaze offers a curated menu of cannabis products from their “trusted brand partners,” and can also provide powerful marketing insights.
Hip Joynt is another option for reaching medical cannabis patients. Either way, adding cannabis delivery to your dispensary can mean some big upfront costs; make sure you’re at a stage where financially your business is ready to take on new expenses.
Another critical consideration is having a designated delivery team leader or manager. If things do start to go well for cannabis delivery, you will need someone to take charge and continue to grow that stream of revenue.
Now this could be your current in-store manager, but depending on your sales volume, this may need to be an entirely separate manager.
If you’re interested in learning more about cannabis delivery and setting up an online store, get started by clicking the button below.