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How to start an online cannabis delivery business 2021

By Tanvir Singh 7th January 2021

Cannabis has always been an in-demand product for most people, either medicinal or recreational purposes. After many protests, awareness campaigns, etc., cannabis has become socially acceptable by the masses and even legal in most places. With skyrocketing sales, the cannabis delivery business is becoming an attractive and exciting business proposition among young and serial entrepreneurs. 

With the pandemic changing our lifestyle and decreasing our overall mobility for a long time, it also paved a new and better way of business, the on-demand industry, the best thing that could happen to the cannabis delivery business. The increasing affinity towards delivery can also be seen from the revenue reports by Eaze ( a popular cannabis delivery business ), which made a whopping USD 176 Million in 2020 alone. The demand for cannabis has always been high. According to a press release by Grandview research, the cannabis industry is estimated to touch 70.6 billion by 2028 in the US and record a remarkable CAGR of 26.7% during the forecasted period. 

With weed becoming increasingly popular, the need for on-demand cannabis delivery services is shooting up as well. Though starting a delivery service for marijuana may sound complicated, a well-planned business plan can help you get it off the ground pretty quickly. 

Starting an on-demand cannabis delivery business may seem a bit risky and extravagant at first. Still, in this day and age, it is one of the fastest-growing sectors in the market, making it the most potent sector to invest in. This blog will walk you through the steps you can take to seamlessly set up your online cannabis delivery business!

cannabis intro

Further, we will discuss:

  1. What is the cannabis delivery business, and why is it an attractive business proposition?
  2. Popular business types for cannabis delivery
  3. 5 Point Checklist for cannabis delivery business
  4. Building your cannabis delivery app
  5. Introducing Jungleworks cannabis suite, one-stop destination for your cannabis delivery app

What is the cannabis delivery business, and why is it an attractive business proposition?

In straightforward terms, the cannabis delivery business is associated with delivering high-quality cannabis products to consumers. A cannabis delivery business can either have its production centers or outsource weed from other legal sources such as medical dispensaries.

The reasons why it is an attractive business proposition are countless, but some of the main reasons are:

  1. Lesser Order Returns: Cannabis users are particular about the type of product they use. So when they place an order for a specific strain for a fixed amount and provide you with a convenient time for delivery. The chances of return decrease due to the level of customization offered by the business.
  2. Long Term Customers: We live in a time of convenience. It is essential to make your product more accessible to the customers. Even if you have the best product but don’t deliver, your customers will find an alternative product with a delivery option. With cannabis customers, if you pair an excellent product with on-demand delivery, more people will buy from you. This is the goal of the cannabis delivery business, a good product that is accessible on-demand.
  3. Sustainable business model: As stated earlier, the pandemic led to an increase in deliveries. Weed delivery also saw the same pattern and have seen a rise in revenue through deliveries. Existing cannabis stores can also add the delivery module to their existing setup and make it high profit-yielding and sustainable.

Popular business types for cannabis delivery business

The cannabis delivery business can be broadly classified into three types. These business models are:

  1. Delivery service for local cannabis dispensaries.
  2. Cannabis dispensary with its delivery service.
  3. E-cannabis stores or online-only stores for cannabis delivery.

In the first case, you only do deliveries for local medical weed dispensaries, enabling deliveries. In this case, you don’t need to worry about inventory or storage. Compared to having a dispensary with a delivery service or an online-only store, you quickly need a safe physical environment to store and manage your inventory.

5 point checklist for a cannabis delivery business

  1. Location
  2. Licenses
  3. Delivery Compliances
  4. Procurement of your stock
  5. Marketing your cannabis delivery business

Location

Selecting the right location for your weed delivery business is of prime importance.  In the US, where every state has its own regulation for weed delivery, you need to consider all the compliances and licenses you’ll need to have to do business.

Another important factor to consider while selecting a location for your business is the demography of the area. Ask questions like:

  1. What is the average age of that area?
  2. Are there any cannabis users in the area?
  3. Is it safe to practice business in that area?
  4. Is it an open market or a closed market?

Answers to these questions will help you decide the best possible location for your dispensary.

Licenses

Marijuana is not legal at the federal level. However, a few states permit the use (medical or recreational or both) with certain restrictions.

It would be best if you did your homework before you thought about launching your marijuana delivery business. Different locations are governed by varying laws. Check your state’s law and stance on cannabis.

Once you are thorough with the laws, it’s time to apply and acquire the necessary permits and licenses. Obtaining a business permit for a cannabis delivery business depends on your business type like:–

You are affiliated with a storefront dispensary – This is usually the case for business owners who already have an operational offline dispensary. Here, you will need a regular Retailer business license.

You are not affiliated with a storefront dispensary – In this case, you will need to get a Retailer Non-Storefront business license. Along with this, you will also need to procure a physical premise, but it won’t be accessible to the public.

You will need to complete the Cannabis Retailer Application before you invest in the business. The information is provided by The Bureau of Cannabis Control here.

It’s also recommended to consult a legal expert who can educate you on your state’s cannabis law’s nitty-gritty and nuances. Make sure you are not leaving out any necessary documentation.

If you are in any other place besides the United States, here’s a link that can help you check the legal views of your country on the cannabis delivery business.

Delivery compliances 

As a highly regulated market, cannabis distribution comes with strict rules that you must follow as you start your business. Delivering marijuana works a bit differently than it does for other commodities like food, supplies, etc. You will need to know what counts as a violation to avoid getting into a sticky situation. Make sure your drivers are thorough with the delivery rules in your city and state. 

Your delivery drivers must be competent and reliable people with a strong work ethic. Any carelessness from their end can get your business in jeopardy. By law, they are required to –

  1. Be at least 21 years of age.
  2. Carry the necessary documentation that proves they are allowed to distribute cannabis, driver’s license, and employer ID badge.

Other important things to note are –

  1. Drivers must not be under the influence of cannabis of any form.
  2. All delivery vehicles must have an active GPS tracking device installed in them at all times.
  3. Most states do not allow carrying products worth more than $3000 at any instant.

You will also need to ensure a robust dispatch system to ensure all deliveries are fulfilled in time and to the right customer. A delivery management system like Tookan makes it easy and efficient for you to track, manage, and coordinate your delivery fleet in real-time!

cannabis delivery

Procurement of your stock

It’s pivotal to find a source that is reliable and trustworthy to acquire your marijuana stock. You will find many dealers in the market who trade the plant without the licenses and permits. It will help if you stay clear of any illegal cannabis suppliers.

If you are planning to launch your cannabis marketplace, you can either –

  1. Tie up with a dispensary and handle their online deliveries.
  2. Find a legal wholesaler who can source your inventory for your stock.

Although complicated and time-consuming, you can even consider starting your farm if you want to.

Marketing your online cannabis delivery business

As a legal yet tabooed product, marijuana comes with its marketing challenges. But first off, get your business listed on all social media platforms that you know your customers frequent. Cannabis has a market consisting of users from all age groups, so bear that in mind. 

Get your word out through Instagram and Twitter. You’re likely to reach middle-aged to older people on Facebook. Tik Tok is another excellent platform to reach your younger audiences these days. 

Working your way up through digital marketing is another sure-shot way of getting traffic on your website. However, online paid advertising is mainly restricted to cannabis businesses. Social media platforms are federally governed, which means running paid ads on them is prohibited. The same holds for Google Ads.

Whereas Linkedin allows you to promote your cannabis business using paid ads but the cost for advertising on LinkedIn is way too high.

Ergo, getting organic traffic through intelligent SEO practices. Gearing your website and content as highly SEO optimized will help you increase your online footfall. The stigma around cannabis primarily arises from misinformation; making your marketing content educational and informative may help you disperse the unawareness, building credibility for your brand.

cannabis app

Building your online cannabis delivery app

The presentation and efficiency of your app will speak for your business. It is particularly essential as you will want to nurture a positive brand perception in your customers. You will need a user-end app, vendor app, and an admin dashboard to manage your sales.

An efficient customer app should have the following features:

  1. Smooth registration with secured identity and age verification system.
  2. Easy search and select components with relevant filters.
  3. E-wallet options
  4. Real-time GPS tracking
  5. Option to upload prescriptions and age verification while registering.

The app for vendors should have features to handle orders, payments, product catalogs, and refunds.

Along with these, you will need a unified delivery management system that helps you manage your orders safely. It should include driver verification, status updates, real-time tracking, and other crucial information to fulfill an order safely.

Introducing Jungleworks cannabis suite, your one-stop cannabis delivery app

Yelo online marketplace builder can help you start your cannabis delivery business with just a few clicks. You can design your delivery business with Yelo, which is made to fit your business model!

With delivery being the most crucial bit of running a cannabis business, you will need a competent fleet management system that gets the work done! Using Tookan, you can easily oversee your orders with a click! 

With route optimization, automated dispatches, and a live chat feature, you can efficiently deliver cannabis products to your customers and resolve their queries.

Sign up and find out how Yelo and Tookan can help you kickstart your cannabis delivery business right now!

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