One of the more popular innovations to the cannabis industry has been driven by a customer preference for e-commerce browsing and an option for delivery. Cannabis retailers, known as dispensaries, immediately realized that meeting customer expectations and broadening their customer base beyond an in-store experience made a lot of sense. With simple technology, individually-run dispensaries and MSO (multi-state operators,) can add cannabis delivery as a service. With competition ramping up, experts at Blaze and Onfleet know how to get you started.
Cannabis delivery soared in popularity in 2020 as states shut down due to the coronavirus pandemic. This forced some dispensaries to be a little more creative with their commerce strategies. However, even back in 2016, it was reported that 44% of medical marijuana users regularly used delivery to obtain their cannabis. Data from High There points to cannabis delivery being the fastest-growing stream of commerce in cannabis. So while the idea seems new, the proven success of cannabis delivery is not.
While cannabis delivery services are on the rise, dispensaries should still weigh whether delivery is right for them. Not all dispensaries are prepared to increase staff, add software, and spend large amounts of capital.
This article will highlight whether a delivery service is right for your dispensary, what you need to do to get there, and which software programs will invite the most success. We also spoke with experts from Onfleet for insights on how to start a cannabis delivery service in an increasingly competitive space.
Is Cannabis Delivery Right for Your Dispensary?
Before jumping right in, it’s worthwhile to investigate what delivery might look like for your dispensary. What are your customer’s needs that are creating this demand? What does your target market look like? Who are the people in your area using cannabis delivery? Questions like these help paint a vivid picture of how delivery fits in with your customer and business needs, so let’s look at each one.
Before you do anything else, seek feedback. Ask partners, brands, and vendors about their successes and challenges with cannabis delivery. Create a survey or email campaign for customers and collect feedback. Customer needs could indicate whether your dispensary can benefit from a delivery service. Feedback from those most familiar with your dispensary can provide the most honest and helpful answers you’re seeking.
Know Your Market
Study your market. Consider where your dispensary is located and what customers you serve. Do you have medical cannabis users who cannot easily access a dispensary? Dispensaries with both medical and recreational customers likely have a larger customer base, which generally means more people will prefer, or in some cases, need their cannabis products delivered. Think also in terms of logistics. Can your dispensary support 2 or 3 delivery vehicles? Will you need to hire more drivers and a dispatcher? The needs of each dispensary vary, but you should consider how adding delivery to your business model will not only fill in a gap, potentially expand your customer base, but also require you to have the right team members for the job.
Many dispensaries have found it helpful to set a geo-perimeter to limit deliveries outside of 30 minutes. One of the best means to investigate this “boundary system” is to use customer information, data, and feedback to gauge how far customers travel each visit. It’s also important to study your competition and their reach. Is there a neighborhood they don’t serve or a dispensary desert in your area? Harnessing this information to get a feel for how quickly deliveries can be made and how often will help you defend as well as build your business.
Obtain a License to Deliver Cannabis
It is no secret that cannabis compliance and licensing can be daunting, haphazard, and confusing. . But to create a successful operation that, for example, can now serve twice as many customers in a wider area, it’s a necessary task. Each state has different laws about how cannabis delivery should work. Currently, only 14 states allow for either medical or recreational cannabis delivery. These states include Arizona, Arkansas, California, Colorado, Maine, Maryland, Massachusetts, Michigan, Nevada, New Mexico, New York, Oregon, Rhode Island, and Vermont. The state-by-state rules are evolving and the expectation is for this marketplace to open up. That is, delivery permissions are forecasted to only increase both in practice and new states and locations.
Because of this state-by-state legal onboarding, cannabis businesses must research laws regarding cannabis delivery in their area. They aren’t the same in any two places. For instance, in Colorado, legal cannabis delivery was passed in 2019. However, within Colorado, each municipality must vote to allow it in their respective areas. Whereas in California, drivers must keep a designation log that accounts for each location where an order was fulfilled, called manifests. Other laws about security, like keeping lockboxes, or modes of transportation, like specifying the delivery vehicle type, vary state by state but as the industry grows, are adopted into practice. Your business will need to comply and find solutions to automate. Knowing the ins and outs of cannabis delivery in your area can help you avoid legal entanglements and keep your dispensary up, running, and delivering.
Driver safety and insurance
Also, consider the cost of insurance for each vehicle and driver. Choose insurance policies that cover accidents, break-ins, and roadside assistance. Telematix with companies like Azuga might be a consideration. Having insurance could be expensive, but not having it could be costly. Cover all bases and go with what’s safer, not cheaper.
Choosing the Right Delivery Software
If you’ve determined that delivery is permissible through an understanding of local cannabis delivery laws, that your customers (and a potentially wider customer base are seeking this option,) and you are ready to manage this new channel, it’s time to obtain your license and a means of delivery transport. What happens next is possibly the most important part of your legal cannabis delivery: choosing the right software. Streamlining delivery with a strong cannabis POS that can integrate well with a cannabis delivery service will help you grow your business and automate an increase in customer basket size and orders. There are options available to you, but there are clear leaders that will help you navigate this transition with confidence and ease.
Blaze dispensary POS software has an entire suite of tools that enable your budtenders to drive sales, manage inventory, run promotions, and create a seamless and memorable customer experience. Additionally, Blaze’s distribution software allows the user to control everything from inventory and shipments to taxes and compliance. With Blaze, you get a customer-focused software platform that integrates smoothly with Onfleet, an equally impressive delivery operation.
Onfleet is a last-mile delivery software company that powers millions of deliveries each month for over a thousand customers around the globe. Its very first customers included dispensaries and over the past six years, Onfleet has developed an expertise in simplifying the complexities involving cannabis delivery. Beyond managing hundreds of cannabis operators, from single-store dispensaries to multi-state conglomerates, Onfleet’s powerful software is built upon a simple API integration, data-driven insights, and efficient route optimization engine that enables real-time updates, proof of delivery options, contactless delivery anonymous two-way messaging between customer and driver, and more.
Onfleet’s success leaves little wonder as to why they’ve found a successful niche in cannabis delivery. When speaking to Katherine Lehman, the Marketing Demand Generation Manager at Onfleet, she explained “Cannabis is ever-changing, but so are we. We’re well versed in our licensing and SOPs which allow us to be the most trusted name in cannabis delivery.”
Creating a Successful Cannabis Delivery Business
With trusted, efficient partners like Blaze for POS and Onfleet for delivery, you can launch and run a successful cannabis delivery business. You will invite new customers who prefer delivery, increase basket size, and offer options to customers who like a choice. . The pros can outweigh the cons by a mile as once the systems are in place, they are automated and serve your growth and satisfy your customers. The marketplace will only continue to expand and become more open. This will invite competitors new to the industry, so for already established dispensaries, now is the time to execute a cannabis delivery model.
You won’t be doing this alone. Experts at Blaze and Onfleet are ready to partner and share their best practices. with the combined expertise of Blaze’s sales-driven dispensary POS and Onfleet’s award-winning effective delivery solutions, worry less and let them do the work.
And don’t take our word for it – read the reviews! Onfleet has thousands and thousands of positive driver reviews as well as the highest rankings from cannabis businesses of every size. Blaze’s ERP software has onboarded hundreds of satisfied customers.
To schedule a demo with Blaze, click here and see why thousands of customers love their dispensaries.