Cannabis Distribution

 

The cannabis plant is derogatorily called "weed" because it grows so easily in many places and under diverse conditions. In that sense, the plant is widely available. According to UNODC,  in its 2020 World Drug Report, around 151 countries cultivate cannabis making it a universal crop and commodity. Distribution of cannabis, therefore, involves relatively short distances, from grower to the end consumer. This is as compared to heroin, cocaine or even pharmaceutical drugs, that are manufactured in relatively few places, and then transported across the world for distribution to global markets. That is one more way in which cannabis has a smaller carbon footprint than other recreational drugs. 

 

However, with the prohibition of cannabis by governments worldwide, specifically with the aim to boost the trade of the above mentioned heroin, cocaine and pharmaceutical drugs, besides alcohol and tobacco, cannabis's distribution from farm to retail is largely under cover. In many places, where the plant flourished freely in nature for millions of years, indiscriminate action by governments, drug enforcement and law enforcement have destroyed vast areas of cannabis growth so that even though the plant may still be geographically widely distributed, its density and diversity have come down tremendously. It is a very significant point to be considered that, despite the illegal status of cannabis, it is still the world's most popular and widely consumed drug. As early as in 19th century India, where the whole cannabis prohibition circus was started by the British to promote their preferred drugs - opium, tobacco and alcohol - it was found that even though the government imposed tight regulation and taxes on cannabis in their provinces, cannabis continued to flow in from the adjacent unregulated Indian states. To counter this, the British decided to extend cannabis regulation, and ultimately prohibition, across the entire country. Even this failed miserably as much of the country continued to access cannabis surreptitiously, considering that it was intrinsic to India's social, religious and medical traditions. Cannabis prohibition was opposed by many knowledgeable and eminent persons in both the government and Indian society, with one of the key reasons for opposing prohibition being stated as the need for maintaining a large and untenable preventive legal establishment. Despite the warnings from these wise persons, the government went ahead with cannabis prohibition, which was then, and as is now, an utter failure.

Where the plant has been legalized, or, as in most parts of the world, where it is available only through the black market, large and medium scale growers need to have an efficient distribution system, so that the plant can reach retailers and finally the end customer. Legal cannabis distribution involves some processing, packing and finally the transport of the plant and its derivatives in large quantities by professionally managed logistics and distribution companies. These distributors need to ensure that the quality and safety of the product is retained. Illegal distributors employ innovative methods to avoid detection whereas legal distributors follow compliance and regulatory rules to ensure that the best quality product moves from the farmer to the consumer in the most efficient manner. There are technologies to track this process and many specialty distribution companies are emerging in the cannabis industry.

Cannabis, both legal and illegal, is now distributed globally, like the notorious pharmaceutical drugs, and illegal drugs heroin and cocaine. This is mainly because the countries that came up with the highly destructive idea of prohibiting cannabis, mainly North America and Europe, now face an ever increasing demand for it from its people, who having been forced to rely on synthetic drugs for decades, have now realized that cannabis has many benefits. So cannabis, grown legally in Uruguay and Canada, and illegally in Afghanistan and Morocco, is distributed by legal and illegal entities to different parts of North America, Europe and Oceania. 

 

In the US, where many states have legalized cannabis for medicinal and/or recreational use, distribution however remains intra-state since cannabis is still federally illegal because of which inter-state distribution is prohibited. In many US towns, where retail sales are prohibited, as well as in municipalities without retail outlets or dispensaries, even though the state has legalized it, purchase can be done online and various platforms ensure last mile delivery of product to the end user. Distribution requires a separate license in many US states. Home delivery of cannabis is vital for the elderly, and for those who are medical patients with serious ailments. With distribution and delivery of cannabis becoming a vital part of the booming cannabis industry, the potential for job creation and working in the cannabis industry in this segment has also shown growth and looks very promising. During the recent fake pandemic, Covid, created by those opposed to cannabis to boost their hold on markets, many US states with legalized cannabis deemed cannabis as an essential service alongside food and medicine. This provided a much needed impetus for the e-commerce of cannabis, with a number of companies setting up cannabis delivery operations through online platforms.

Many challenges currently faced by the cannabis distribution companies in the US include the lack of banking support for the cannabis industry, resulting in unsafe cash handling. Even where cannabis is legal, many local cities, municipalities and local law enforcement continue to oppose the home delivery of cannabis citing various vague reasons, such as the potential increase in crime and increase in youth consumption. Then there are the ever present drug and law enforcement agencies to content with. It is comical to note that drug and law enforcement agencies spend vast resources to curb the distribution of the natural herb and commodity, cannabis, while the really dangerous drugs - methamphetamine, opioids, cocaine, etc - are easily smuggled all over the place. This is because cannabis is the most easy drug to detect. Hence you will find law and drug enforcement seizure statistics completely dominated by cannabis figures, hiding the real failures under a mountain of cannabis seizure data. This is one of the key reasons why law and drug enforcement are among the chief opponents to cannabis legalization, as this would expose them very badly.

 

With growing international awareness and the rapidly changing legal status of the plant, we can be sure that cannabis distribution by small and large players operating across state and national borders, will only increase in scale and efficiency, and that too exponentially, in the coming years, taking the produce from the farmer to the processors and/or to retailers and, finally to the end consumer.

Related articles

The following set of articles related to the subject are taken from various media. Words in italics are the thoughts of yours truly at the time of reading the article.  

 

 

'The coronavirus pandemic popularized direct-to-consumer cannabis delivery, but marijuana operators say the practice is here to stay.

“People just don’t want to have to leave their houses for anything these days,” said Monica Gray, chief operating officer of delivery-only cannabis retailer Nice Guys Delivery in San Rafael, California.

For marijuana retailers in jurisdictions that permit delivery, a well-designed delivery service will be a critical way to capture market share and serve customers.'

https://mjbizdaily.com/key-factors-to-consider-when-launching-a-cannabis-delivery-service/

 

'Cannabis delivery and technology companies say that Apple’s recent decision to let iPhone apps process marijuana transactions is already bringing benefits after these businesses launched new apps for Apple’s iOS smartphone operating system.

Upsides of the change to Apple’s App Store rules for cannabis companies and marijuana tech platforms include:

- Seamless ordering and purchasing, because cannabis consumers can perform transactions within apps instead of having to complete them via a mobile web browser.
- Greater willingness for online shoppers to actually purchase cannabis.
- Improved customer engagement.
- An early increase in orders.'

https://mjbizdaily.com/apples-new-cannabis-app-rules-benefit-marijuana-businesses-but-google-a-holdout/

'U.S. cannabis sales in the regulated marketplace have traditionally been intrastate only: i.e., California cultivators could sell only to California dispensaries, Colorado cultivators to Colorado dispensaries and so on.

This was to minimize the potential for scrutiny from the federal government and criminal penalties stemming from discrepancies between state and federal laws.

The prohibition on interstate sales is rooted in the Commerce Clause contained in Article 1 of the U.S. Constitution.

By virtue of the Commerce Clause, the federal government, specifically Congress, is vested with the authority “to regulate Commerce with foreign Nations, and among the several States, and with Indian Tribes.”'

https://mjbizdaily.com/the-pros-and-cons-of-marijuana-interstate-commerce


https://www.bloomberg.com/news/articles/2021-09-01/amazon-s-answer-to-delivery-driver-shortage-recruit-pot-smokers


'The Denver location of Colorado marijuana retail chain Strawberry Fields is the city’s first recipient of a cannabis delivery license.

Possessing that permit means Strawberry Fields may legally offer marijuana delivery in Denver once the business makes arrangements with a licensed transport service, a city official told MJBizDaily via email.

The retailer told Denverite that it intends to start working with transport service Doobba to provide direct-to-consumer delivery once the city approves the transport company’s license.

The Denver City Council approved cannabis delivery in April through a program that gives priority to social equity applicants.'

https://mjbizdaily.com/denver-approves-first-marijuana-retailer-to-work-with-licensed-delivery-service/

'The explosive growth of e-commerce during the COVID-19 pandemic has propelled new interest in acquisitions involving direct-to-consumer cannabis delivery.

Some marijuana companies have acquired delivery-only cannabis dispensaries, while others have spent more to acquire vertically integrated MJ firms with home-delivery operations included.

Companies involved in recent delivery-related acquisitions have said that the deals help them:

- Quickly access an existing base of loyal delivery customers.
- Gain delivery expertise to apply to their existing operations.
- Leverage delivery assets in other U.S. markets.'

https://mjbizdaily.com/online-cannabis-sales-boom-amid-covid-19-spurs-delivery-service-acquisitions/

'Previously, people buying marijuana through the nation’s largest cannabis delivery service had to leave the prior version of the app and submit orders through a less-convenient mobile version of the company’s web page. The Apple policy change means the service is streamlined, and it represents a significant development in the evolving relationship between Big Tech and the marijuana industry.

“Eaze has always been about using the latest developments in technology to make shopping for legal cannabis more accessible,” CEO Rogelio Choy said. “It’s hard to overstate how important this is to our company and the industry. It’s deeply gratifying to launch the Apple Store’s first fully-functional cannabis delivery app, making it even easier for our two million registered customers to legally consume.”'

https://www.marijuanamoment.net/first-full-service-marijuana-delivery-app-launches-on-apple-store-following-policy-change/

'As simple as it may seem in concept — online shopping and delivery is the norm in many industries, after all — plenty of work, complexity, and controversy went into Monday’s first-of-its-kind sale.

For one thing, Freshly Baked and other delivery operators must follow a series of stringent Cannabis Control Commission regulations.

Under the rules, vans must be unmarked, staffed by two employees, and equipped with a GPS tracker, cameras, and a secure storage area. They cannot operate as “rolling dispensaries” that carry a mix of inventory to be parceled out as orders arrive, instead carrying only pre-prepared orders for specific customers. As a result, all Freshly Baked deliveries will arrive the next day, which also gives the firm time to plot out an efficient route.

The commission also requires customers to submit their photo ID online for pre-verification. And every doorstep transaction must be filmed by a body camera, with the footage retained for 30 days, a measure meant to protect drivers from theft and guard against sales to minors.'

https://www.bostonglobe.com/2021/06/09/marijuana/taunton-microbusiness-makes-states-first-ever-recreational-marijuana-delivery-founders-house/

'You’d think that marijuana delivery executives would quake in their shoes after the head of a ride-sharing giant recently floated the idea of getting into their line of work.

But that apparently wasn’t the case after Uber CEO Dara Khosrowshahi told CNBC last month his company “absolutely” would explore cannabis delivery if the federal government legalizes marijuana.

Rather than fear such a declaration, cannabis delivery executives welcomed it as a sign there’s a national market for the services they’re building.'

https://mjbizdaily.com/ubers-interest-in-marijuana-delivery-highlights-sectors-potential-and-pitfalls/

'Denver’s about to become even more marijuana-friendly, with weed delivery likely starting this summer after the Denver City Council unanimously agreed Monday to overhaul the local industry with two sweeping measures.

The changes have been in the works for several years, with city officials also wanting to make the industry more equitable. The first bill lets dispensaries hire third-party vendors to deliver weed directly to customers and removes Denver’s 220-store recreational dispensaries cap, which has been in effect since 2016. People who want to deliver weed or open a new store must meet the state’s social equity criteria.

The second change would legalize bars where customers could bring their own weed to smoke, as well as clubs that could sell small amounts of pot to be smoked there. Denver will also be cool with tour buses or shuttles that allow weed on board.

The Council voted to approve both without discussion.'

https://www.denverpost.com/2021/04/19/denver-weed-delivery-marijuana-city-council-2021/

'The Commerce Clause of the U.S. Constitution prohibits state laws that unduly restrict interstate commerce under a well-established doctrine created by the U.S. Supreme Court and known as the dormant commerce clause.

Under this doctrine, state laws prohibiting the import and export of state-legal marijuana are almost certainly unconstitutional.

So why do they persist?'

https://mjbizdaily.com/how-interstate-commerce-could-upend-the-marijuana-industry/


'Colorado issued its first adult-use cannabis delivery permit, reflecting a continuing nationwide trend to allow home delivery in the wake of the coronavirus pandemic.'

https://mjbizdaily.com/colorado-awards-first-adult-use-cannabis-delivery-license/

'The ruling, which follows a Monday hearing, is certain to bring a giant sigh of relief from California marijuana businesses.

If the policy had been overturned, the delivery consumer base would have been greatly reduced because most of the state’s cities and counties still maintain bans on cannabis commerce.'

https://mjbizdaily.com/court-rules-in-favor-of-californias-statewide-cannabis-delivery-policy/

'Using CBD products as an onramp to a marijuana business also makes sense from a cash-flow perspective. When a state legalizes cannabis and announces a future date for its sale, companies need to hire employees, rent space, find distribution etc. There can be delays in licensing and other issues. Selling hemp-based CBD products while the company waits for the THC business to kick in, provides an income stream to draw from.'
https://www.forbes.com/sites/julieweed/2019/08/24/cbd-companies-positioning-themselves-for-cannabis-legalization/


'Members of the state's Cannabis Control Commission decided this week in favor of regulations to establish licensing for retail cannabis deliveries and for limited on-site consumption facilities.'
https://norml.org/news/2019/09/26/massachusetts-regulators-vote-in-favor-of-cannabis-deliveries-on-site-consumption-facilities

 

'Home delivery is likely an important factor for New York’s 10 medical marijuana companies since they’re limited to four storefronts apiece – meaning many registered patients face a long drive to a brick-and-mortar MMJ dispensary.'
https://mjbizdaily.com/new-york-medical-cannabis-delivery-expands-and-liquor-stores-lobby-to-sell-mj/


'Headquartered in Los Angeles, WAYV connects licensed cannabis companies to licensed brands and provides next-day delivery of cannabis products — it’s essentially Eaze for the cannabis enterprise not the average cannabis consumer. The startup was founded last year and has so far delivered to retailers in California only.'
https://techcrunch.com/2018/10/29/eaze-co-founder-keith-mccarty-raises-5m-for-his-new-b2b-cannabis-startup/


'In addition to providing secure logistics and cash management services, Brink’s and Canopy Growth will develop a cross-selling program that enables Brink’s to provide services to Canopy Growth’s affiliated growers and retail customers. Canopy Growth’s international transportation and security needs will be provided by Brink’s Global Services (“BGS”), a Brink’s subsidiary that provides secure logistics for international shipments of high-value commodities.'
http://globenewswire.com/news-release/2018/11/08/1648530/0/en/Brink-s-Announces-Partnership-with-Canopy-Growth.html


'State officials on Friday moved ahead with a plan to allow marijuana deliveries to homes throughout California, including in cities that have outlawed pot shops.

The state Bureau of Cannabis Control said it sent the proposed rules to the state’s Office of Administrative Law, which has 30 days to conduct a routine review of their legality before the regulations become final in January.'
https://www.latimes.com/politics/essential/la-pol-ca-essential-politics-may-2018-california-advances-plan-to-allow-home-1544226217-htmlstory.html


'Oregon regulators will allow medical marijuana to be delivered to patients who live in areas of the state where licensed cannabis activity is prohibited and also increase the daily purchase limits for MMJ cardholders.'
https://mjbizdaily.com/oregon-approves-medical-cannabis-deliveries-banned-areas/


'MJIC said its superhighway will create the infrastructure to legally transport, distribute and sell marijuana amid a thicket of regulations that hamper the industry supply chain. At present, a licensed grower can’t legally transport his crop to his own licensed extraction facility across the street without hiring a licensed distributor, according to Karban. The company is acquiring dozens of licenses, trucks and warehouses across the state to build a legal corridor for cannabis stretching from San Diego to Oakland.'
https://www.bloomberg.com/news/articles/2019-01-08/u-s-firm-building-cannabis-superhighway-plans-canada-listing


'In a statement, Eaze President Ro Choy called the development a “pivotal moment” for a company that is said to have supported more than 3 million legal deliveries in California.

In November, Eaze launched an online marketplace, Eaze Wellness, to ship CBD products to 41 states across the U.S. and the District of Columbia.

That option, however, takes four to six business days, while Eaze’s on-demand delivery in California and now Oregon are same-day delivery for customers.'
https://mjbizdaily.com/california-cannabis-tech-firm-eaze-expands-into-oregon/


'For now, the current advisory, which was first reported by the marijuana law blog Kight On Cannabis, stipulates that it is legal to mail hemp-derived CBD products in compliance with research-focused provisions of the earlier 2014 version of the federal agriculture legislation.

However, postal customers must first take certain steps such as providing a signed self-certification statement and documentation confirming the hemp producer is licensed through a state agriculture department.'
https://www.marijuanamoment.net/u-s-postal-service-issues-advisory-on-mailing-hemp-derived-cbd/


The Uber of cannabis
https://www.youtube.com/watch?v=qs9mShKcVBc


'California’s adult-use legislation sets a framework for a wholesale supply chain by licensing distribution businesses, separate from the licenses granted to producers and retailers. That means distributors can handle transportation and logistics for multiple manufacturers and represent multiple brands when selling the goods to stores —similar to distribution in the alcohol industry. Cannabis distributors in California also must test products for safety and pay state taxes on the goods. '
https://www.wsj.com/articles/cannabis-supply-chains-coming-out-of-the-shadows-1535016610