Whenever a state takes the steps to legalize medical marijuana and opens the market to entrepreneurs, there are huge opportunities for innovative solutions to deliver the product to new clients. One of the newest offspring of the marijuana legalization movement is the home delivery services. These services are allowed to deliver medical marijuana prescriptions directly to patients where they live, so that they don’t have to travel long distances themselves. Even when medical marijuana is legalized, there is often a long period of time before a significant amount of dispensaries begin to appear across a state.
The demand for medical marijuana is high (pun intended) once patients begin to receive prescriptions for it from their doctors, and the sooner a dispensary is able to deliver this medicine to the their homes the more popular they will become.
Many dispensaries and clinics are beginning to form mobile medical marijuana organizations as a way to provide their patients with safe, secure access to this unique plant. There is also a matter of privacy on the part of the patient who is prescribed this medicine. Often time’s people can feel uncomfortable physically entering a marijuana clinic or dispensary because they don’t want their neighbors to form a poor opinion of them. Although medical marijuana is becoming more accepted as time goes on, there are still those who feel very strongly against it. Having a medical marijuana delivery service satisfies a client’s privacy as well as their need for relief from their medical condition.
Currently, there are 25 states, along with Washing D.C., that allow patients access to legal medical marijuana. Each state has their own specific guidelines regarding growing practices and delivery services. You may want to consult with an attorney to determine if a marijuana delivery service is legal to operate in your state, and many times these lawyers will provide a free consultation.
Medical marijuana delivery services can be a complex and difficult endeavor, but can also be extremely profitable. There are some factors you should consider, however, before you embark on this exciting business venture.
Getting Started – First Steps in Starting a Cannabis Delivery Service
Since storefront medical marijuana dispensaries can often come under attack from law enforcement for the slightest infraction of any legal code, patients are beginning to create medical marijuana delivery services that draw far less attention than a storefront would. One state that has become particularly popular for this service is California, since their state law allows for a marijuana delivery service to be operated with the same protections that are given to patients who start marijuana collective.
As with a storefront operation, you will want your delivery service to be incorporated as a non-profit mutual benefit corporation under the laws of your state. Under California law, for example, medical marijuana collectives may incorporate as a non-profit by utilizing the proper legal paperwork that either you or a lawyer will be able to complete. This legal paperwork is good for starting a medical marijuana delivery service anywhere in the state, so the same paperwork can be used to set up a mobile medical marijuana collective, delivery service or storefront collective.
Analyze Your Cost vs. Benefit
Before considering a business in the medical marijuana industry you must first make sure that your venture will be profitable. Although starting a business can be fun and exciting, you have to keep in mind that you will need to maintain profitability in order to service your customers. Depending on the laws in your state and how you intend to supply patients with medical marijuana, starting your business may not be cost effective. Some states charge extremely high fees and taxes for engaging in a business opportunity such as this.
For example, in Washington D.C. you could incur costs upwards of $200,000 by the time you pay all of the investing fees, equipment and cultivation services. In addition, you will need to hire experienced growers in order to operate an effective marijuana delivery service. You can greatly reduce this cost with a delivery service if you have a small collective of growers who contribute.
In other states, however, such as Arizona where dispensaries are just beginning to become established there is great opportunity for new delivery services. Currently the state allows for what are called, “caregiver compassion clubs,” which allow patients to obtain marijuana legally because the clubs provide personally cultivated plants that are donated by registered patients. Using a business plan such as this can be highly profitable, since you already will have a source of supply, and delivering the product to patients can be a very lucrative plan.
Consider Security Requirements
Security is a key concern for any business, but especially so for medical marijuana delivery. Your drivers are not going to be in a store, where it’s often easier to provide safety, they will be out in the open handling a large amount of product along with cash. Remember, marijuana is a highly desirable substance to criminals, who can often times sell it on the street for immense profit.
Besides providing a safe environment for your driver, you will also need to ensure that you can trust the employees who are handling the marijuana delivery service. These employees will be handling transactions, product and cash on a daily basis. If you driver is by themself during each trip, it allows for a lot of time for thinking about ways to skim off a few extra dollars or grams here and there.
If your delivery people are new employees to you, and you have no previous background with them, it may be a good idea to include a driver and a passenger in each vehicle for a while. This not only ensures that your business isn’t getting ripped off, but it also makes the vehicle a less attractive target for thieves since there will always be someone present.
Other means of protection may be considered as well, communicating with patient prior to delivery to help establish guidelines for the transaction and to get a sense of who you are about to do business with. Having a check-in system so your driver communicates with you on a regular basis can also help increase security and safety.
Consideration must be taken of the laws in your state if non-deadly or deadly weapons are used for personal protection, and with medical marijuana patient services many times possession of weapons could be considered intent to commit illegal activities especially when considering a mobile service.
If you decide to start a medical marijuana delivery service, weigh all the costs before beginning that venture, not only financial, but personally and legally as well.
What’s Required for a Medical Marijuana Delivery Service
The list of requirements for starting a delivery service is smaller than for opening a dispensary. You will need a steady source of supply of medical marijuana, most likely from a collective. In reality a collective, in its simplest form is a place where those who provide medical marijuana can help those who currently do not grow or have their own. A collective allows both types of patient the ability to participate as long as they have a valid medical marijuana recommendation or card and they are a member of the collective itself.
The term “collective” actually comes from the provision under California Health and Safety Code §11362.775 which is what allows patients and caregivers the legal ability to collectively or cooperatively cultivate medical marijuana. The term “cooperatively” refers to the cooperation between medical marijuana patients to help supply each other with their medication.
Checklist of Requirements
- You and your employees should each have their own medical marijuana recommendations, or be named by someone else as a caregiver. In order to start a collective, each person in your business who will be handling product should also be legally prescribed medical marijuana. This is the primary requirement of a collective.
- You will need to collect the standard documentation from each of your clients. This documentation comes in the form of the written, or other state requirements, that your clients should possess in order to legally obtain medical marijuana. Each state has different laws and guidelines around the prescribing of medical marijuana, and you’ll want to ensure that both you and your clients are covered in order to avoid any legal entanglements.
- You will need cheap, reliable transportation along with trusted drivers. You will not need particularly large vehicles, a simple mid-sized sedan is sufficient to start out depending on the number of your clientele. You’ll need to ensure that you have at least one source of backup transportation, however, as if your main vehicle breaks down you don’t want to leave your clients waiting and in need of their medication.
- You will need a standard computer database to manage your client list. You can use any contact management software, or if you are proficient in Microsoft Excel you can even use spreadsheets to gather and record customer information. You will also need to be able to track customer orders and deliver confirmations.
- It is recommended that you have two business telephone lines. You should have one line for new customers, and this is the number you will want to advertise publically, so that you have dedicated support. You’ll also want a secondary phone number so that existing clients can contact you regarding questions or delivery issues.
- Although not required, building a website can be very useful to assist your clients and draw in new business. There are many different strains and types of medical marijuana and many customers won’t be able to decide which is best for them. Having an outlet for patients to browse, learn and choose their own strain would be extremely useful to them. It can also help free up your telephone lines so that instead of customers asking questions, they can simply browse a website and get most of the information they seek.
Pros and Cons of Operating a Delivery Service
A delivery service has many reasons that make it an attractive option for new business owners. It offers you the ability to grow at your own pace rather than setting up a storefront and being overwhelmed with customers. Often times demand will be high, depending on the area you are operating in, so it’s a good idea to ensure you can handle the supply before you venture out into the market.
Operating a delivery service eliminates the need for costly overhead expenses like additional employees, a secure cashier counter and additional security systems. Since you will not actually have customer traffic in and out of your business, you can greatly cut down on the costs associated with that avenue.
Having a delivery service also helps you regulate the clientele that you deal with on a daily basis, as well as temporarily halt the intake of new customers until additional medical marijuana is available.
One of the downsides to a delivery service is the potential for additional costs incurred from travel expenses. This is especially true since there can often be issues with customers giving the incorrect addresses to deliver to, forgetting their ID or proper paperwork, and forgetting to be home when a delivery is being made. All of these are common issues when running any type of delivery service, and you will have to manage them carefully or you’ll quickly find your income being eaten up by time and gas expenses.
You will need to be assertive in making sure that each order is processed correctly by asking the client the right questions, pre-verifying their eligibility over the phone and having them fax/scan copies of their ID and other documents prior to accepting them. This will not only reduce the margin of error for your orders, but also ensure that you are operating within the legal framework for a medical marijuana deliver service.
Costs Associated with Running a Delivery Service
Starting a medical marijuana deliver service is amazingly inexpensive compared to running a physical dispensary. You will not have to invest heavily in any sort of infrastructure such as utilities, security and staff costs.
A medical marijuana delivery service can remove about 90% of the costs that you would usually have to pay for a physical storefront. It is an attractive option for those who want to target a specific location to service in their state as well. You will be able to choose who you want to work with and supply, rather than being overwhelmed by random customers on a daily basis. This can greatly reduce the cost of doing business and gives you more control over your regular expenses.
Most of the time you can get a delivery service operational for less than $10,000 in the majority of cities where it is legal. This is a much lower price than if you were to start up a dispensary, which can easily cost upwards of $100,000 after fees and permits are paid. Plus, you will not have to compete with other dispensary businesses in the area, since you can service a far greater distance than most storefronts.
It’s important to examine the laws in your state carefully and make sure that a medical marijuana delivery service is legal. It may also be a good idea to consult legal counsel who specializes in medical marijuana services prior to starting your business. Regardless of the path you choose, dispensary or delivery service, if you run your business carefully you can stand to be very successful while helping patients relieve their conditions every day.