It wasn’t that long ago that marijuana was illegal to even keep in your pocket in New Jersey. Now, it’s not only legal to sell over the counter — before long, it might show up at your front door.
On Sept. 27, the New Jersey Cannabis Regulatory Commission will open license applications for cannabis delivery companies, which will contract with dispensaries to deliver cannabis products directly to consumers’ homes. The commission will also begin accepting applications for cannabis wholesaler and distributor licenses, which buy, sell and transport cannabis products between other licensed cannabis businesses.
Cannabis delivery is still a relatively new phenomenon. Of the 23 U.S. states where marijuana is legally sold to adults, about one-third still don’t allow residential delivery to recreational customers.
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“There’s been interest in delivery from the beginning,” said Scott Rudder, a former assemblyman and president of the New Jersey CannaBusiness Association, which operates as the state cannabis industry’s de facto chamber of commerce. “It’s a different type of industry with different requirements, but there’s a convenience factor that’s especially important for patients.”
New Jersey law is very specific: Home delivery is allowed by companies that receive licenses from the Cannabis Regulatory Commission. Municipalities can stop those companies from locating their businesses within their borders — like offices or depots — but they can’t stop the deliveries to customers who live there.
“I think this will be a big convenience factor for consumers. I think it’ll help the market move forward, an additional service that recreational customers can count on in New Jersey’s market,” said Jeff Brown, executive director of the New Jersey Cannabis Regulatory Commission This will really jump-start home delivery.”
With the state primed for a new niche sector of the cannabis industry, here are some of the key things to know.
How will all of this work?
On its face, cannabis delivery in New Jersey will operate like UberEats, GrubHub or other delivery apps.
A delivery company will partner with one or more dispensaries and host their products on their delivery platform, which allows customers to shop around, enter their address and place an order.
When the delivery driver arrives, they’ll be required to verify their age in order to actually receive their order. And because cannabis companies are still largely unable to secure federally secured banking, the customer will likely be paying cash, Brown said.
Tiyahnn Bryant, CEO of East Orange cannabis delivery start-up Roll Up Life, sees it as a three-pronged system that requires every part to work in unison. In order for customers to be happy, a dispensary needs to make sure it’s able to process the order — that they’re not running out of product — and delivery companies need to get it to them efficiently.
If one part of that system fails, it defeats the purpose of offering deliveries, Bryant said.
“I think about deliveries from a holistic standpoint, not just how to execute it, but how to become a platform,” Bryant said.
Roll Up Life launched in 2018, years before weed was even formally legalized, and spent five years investing in its tech. Bryant hopes the app won’t just appeal to customers but to other delivery companies, which can license the software.
“We’re trying to have as large a footprint as we can,” he said.
But for drivers, it’s not as simple as throwing a few pizzas in the truck. Delivery companies must also meet strict safety protocols in order to securely handle both valuable cannabis products and cash.
“From our perspective, it has to be trackable. We want to make sure the product is secure in the vehicle and that they have security protocols. This is still largely a cash business, which is a security issue in and of itself,” Brown said. “There are additional security protocols, but Uber and Lyft drivers are vetted for safety, too.”
Just like that? A few clicks, and legal weed shows up at my front door?
It might take a little longer at first. Delivery times are expected to be directly proportional to the number of companies fulfilling orders — which means it might take a while at first.
Rudder expects that the first few months will involve customers being given windows during which the delivery will arrive, instead of an up-to-the-minute update.
“It’ll be similar to a cable service coming to your house,” he said.
Can I get legal weed delivered now?
During the height of the COVID-19 pandemic, medical marijuana dispensaries were cleared to begin delivering to patients. But as of this week, only six of the state’s 45 medical marijuana dispensaries were fulfilling delivery orders — and, like any business offering deliveries, there’s a radius beyond which they won’t travel.
“This is very important to the patient community,” said Ken Wolski, executive director of the Coalition for Medical Marijuana New Jersey, which advocates for medical marijuana patients. “So many patients are disabled and to try and go to one of these dispensaries is a real hardship just to obtain their medicine.”
What if I’m not a medical marijuana patient? Can I get weed delivered?
Enter the “gray market.”
Like other states, New Jersey’s cannabis laws have a giant loophole. While you’re only allowed to sell cannabis if you have a license, it’s perfectly legal to give — for free — up to 1 ounce to your friends, family or anyone you’d like. It’s the same way you might offer a beer from your fridge to a house guest.
In that gaping loophole, quick-thinking entrepreneurs have launched their own “gift” businesses that sell cheap novelties like T-shirts or simple, cannabis-free baked goods.
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Those simple products might cost $40 or $50, far above the going rate. And when the delivery comes, the driver can offer, as a gift, some amount of marijuana.
These companies are rarely subtle. Some sites contain entire cannabis menus with prices and sales, even though they remind customers that the driver may only offer marijuana as a gift.
So just how expensive is it to get one of these legal weed delivery licenses?
It’s much cheaper than opening a dispensary or a cultivation center, that’s for sure. According to the Cannabis Regulatory Commission, applicants must pay $1,000 to $2,000 in application fees, with the smaller amount charged to microbusinesses.
An annual license costs just $1,000 for a microbusiness or $3,000 for a standard license. Standard dispensary licenses cost $10,000, and cultivation licenses can cost up to $50,000 per year.
The lower-priced fees are part of the commission’s attempts to lure black market entrepreneurs, along with a three-month exclusive window for social equity applicants — those previously arrested for marijuana possession or live in communities hit hardest by the War on Drugs.
From September to December, the commission is only opening up applications from potential licensees who qualify as social equity applicants. And from December to March, only social equity and diversely owned businesses — minorities, women and disabled veterans — will be allowed to apply for licenses.
“Legacy businesses have been offering home delivery for many, many years. It’s been a part of the legacy cannabis experience for a long time,” Brown said. “This is formalizing its inclusion in the regulated market.”
When the idea of the window was first proposed in June, Cannabis Regulatory Commissioner Charles Barker even called for a longer exclusive window of six months.
“This creates an opportunity for social equity businesses to make it through and open up, especially for these new license types,” Barker said.
Why is this so important?
Cannabis industry insiders look at delivery as a key hurdle in New Jersey’s cannabis market building out to its potential. As of this week, there were 32 recreational dispensaries open in the Garden State — nearly triple as many options as were available on the first day of legal weed sales in April 2022.
But in a state of more than 9 million people, it amounts to one recreational dispensary for every 290,281 people. It’s the third-highest resident-per-dispensary ratio of any legal weed states, behind just New York (which has only opened a handful of dispensaries since sales began last year) and Minnesota, which began the first recreational sales this month.
States like Maryland and Missouri, which passed marijuana legalization laws last year, already have more dispensary options and lower customer-to-dispensary ratios.
What does that mean in the real world?
You’ll be hard-pressed to find a dispensary in most parts of New Jersey that doesn’t have a line out the door during peak hours, and allowing some of those customers to stay home could ease the wait times.
It hits even harder for medical marijuana patients, many of whom can’t physically get to a dispensary location to purchase their prescribed cannabis. And with New Jersey the only legal weed state that doesn’t allow its medical marijuana patients to grow cannabis at home, those patients could see huge relief by having an order arrive at their doorstep.
“Until the last month or two, there wasn’t a single dispensary in Ocean County. And there are still some places without a lot of options,” Wolski said. “There’s just not a lot there, so it’s an industry that’s crying out for more businesses.”
H/T: www.app.com
