In California, the marijuana delivery business is doing well, while in Oregon the picture is not as promising. This difference can be attributed to several factors, including the constantly changing patchwork of state and local laws, customer habits, and urban geography.
Deliveries in California allow cannabis access in remote places
One key factor in Southern California is drive time. As anyone who lives in Southern California knows, it can take a long time to drive anywhere, which increases the appeal of waiting at home for a delivery rather than driving to a dispensary. A search on Yelp for delivery services in Los Angeles, for example, yields 21 pages of results, with 30 listings per page. In Portland, however, Yelp lists only one page of delivery services.
This number of delivery services in Los Angeles highlights one aspect of the delivery market: not all of it is legal. The number of licensed delivery services in the Los Angeles area is 128. In part to take business away from unlicensed delivery services, California is considering expanding the legal delivery market. According to proposed new regulations issued in July, California’s Cannabis Control Commission would allow delivery businesses to operate statewide. This is in part a response to the issue of access in the many counties and municipalities that have banned marijuana businesses. Delivery services would improve access for patients in areas where dispensaries are banned.
The proposed expansion of delivery services in California has met with opposition. Among the opponents is the California Police Chiefs Association, which has said that delivery vehicles and drivers will be a target for crime. The California League of Cities also opposes more legal delivery, which would effectively end the bans that many cities have placed on marijuana businesses. This resistance to delivery also exists in Oregon and explains why delivery is banned in Colorado (although the ban may soon be lifted). Finally, the United Food and Commercial Workers (UFCW) Western States Council, a union that represents dispensary workers, also opposes allowing more delivery, even though California’s proposed regulations mandate that delivery drivers be employees, not independent contractors.
The regulations for drivers are extensive. For example, they require a: dedicated GPS device for identifying the geographic location of the delivery vehicle. A dedicated GPS device must be owned by the licensee and used for delivery only. The device shall be either permanently or temporarily affixed to the delivery vehicle and shall remain active and inside of the delivery vehicle at all times during delivery. At all times, the licensed retailer shall be able to identify the geographic location of all delivery vehicles that are making deliveries for the licensed retailer.
Drivers would also be required to maintain logs and adhere to rules about how they run their deliveries.
Oregon’s regulations hamper efficiency of delivery services
Regulations also affect delivery businesses in Oregon, where, for example, drivers must return to their dispensaries after each run, a rule that severely hampers the economic efficiency of a delivery service. In addition, delivery dispensaries must operate under the same regulations as walk-in dispensaries, which means they must have the same expensive security setups.
Regulatory issues are not the only reason why delivery services are not doing as well in Oregon as they are in California. Another is culture: Oregonians like to see and smell the weed before they buy it, and unlike people in Los Angeles, they do not see delivery fees as a small price to pay for not having to face traffic. While California dispensaries also allow people to see and sniff before buying, many are content to buy according to blend, brand name, and price.
In legal states, delivery remains a contentious topic, and this debate is reflected in regulations that either hamper or foster delivery businesses. Regulations aside, however, geography and customer preference also play significant roles.
What do you think? Will California’s government tame its illegal delivery market? Will opposition to delivery decline once well-regulated markets are established? Leave a comment below.