Home delivery of marijuana starting next week
Initial licensees must be social equity applicants
NEXT WEEK, Freshly Baked Company in Taunton will make history when it begins delivering marijuana-infused gummies to any adult purchaser near Taunton. It will be the first time members of the public in Massachusetts can, under state law, legally buy marijuana for recreational use and have it delivered to their house.
“For me, it’s huge,” said Aaron Goines, president of the Massachusetts Cannabis Association for Delivery, a trade group representing delivery companies. “It’s monumental not only for Massachusetts but for the entire country.”
And for at least the next three years, any marijuana being delivered legally will be transported by a company deemed a “social equity” or “economic empowerment” licensee. That generally means it is owned by people who were disproportionately affected by prior drug enforcement laws, such as by being a racial minority, living or working in a high-arrest community, or having a drug arrest themselves or in their family.
The advent of marijuana home delivery has been a long time coming. Although the 2016 ballot question legalizing recreational marijuana specifically allowed home delivery, the Cannabis Control Commission initially decided to delay discussions about home delivery until after the retail market was up and running. Last year, the commission began discussing regulations, and controversy quickly emerged over how to structure the delivery business model and what it would mean for existing retailers. A group of retailers filed a lawsuit over the delivery rules, then withdrew it.
Freshly Baked, which is already operating as a product manufacturer, is a microbusiness with a “delivery endorsement.” Microbusinesses are small companies that are limited in how much cannabis they can produce. They can only deliver their own products.
In May, the commission started accepting license applications for marijuana couriers, companies that partner with a retailer to deliver that retailer’s products – similar to GrubHub for restaurants. There are eight companies in the preliminary or final stages of getting approved as couriers.
On Friday, the commission opened the licensing process for marijuana delivery operators. This license would let a delivery company buy marijuana products wholesale, warehouse them, then sell them to consumers with their own branding.
The Cannabis Control Commission is allowing pre-certification, in which they review partial applications and give a preliminary approval, which the company can take to investors or host communities as they raise money or seek a location. So far, 62 courier businesses have received pre-certification, although some may switch to apply for a delivery operator license.
Cannabis Control Commission Executive Director Shawn Collins said he anticipates applications for marijuana delivery operator licenses will start coming in soon. “Folks have been chomping at the bit for this to be available,” Collins said.
Collins anticipated that more delivery businesses will be approved to begin operations throughout the summer, and delivery will become more widespread.
Smith is an Iraq War Marine Corps combat veteran and co-founder Jenny Roseman was an Air Force medic, who deployed to the Pentagon after the September 11, 2001 terrorist attacks. They founded the company because of their own experiences using cannabis to manage post-traumatic stress disorder.
Smith said allowing delivery will be a major step for Freshly Baked, a 13-employee company that is competing with multi-state operators. As a manufacturer of cannabis-infused gummies, which is still working on building a cultivation facility, Smith said it is a challenge to find retailers to buy his gummies and place them on their shelves. Now, he can sell directly to consumers. He said the exclusivity period lets him get a foothold in the market early at a low cost of entry. “As a small operator, especially in an industry where we’re dealing with giants, that extra income is super important to us,” Smith said. Allowing Freshly Baked to sell its products directly to customers, he said, gives the company the revenue to “compete with the big boys, most of whom have retail outlets.”
Chris Fevry, co-founder of Your Green Package, is among those in the pipeline for a courier license. Fevry has a contract with a retailer and hopes to start operating a courier business as soon as he gets final license approval, with plans to consider expanding to a warehouse operation.
While retailers have worried about increased competition, Fevry said allowing delivery could actually expand the customer base to the elderly and people who can’t visit dispensaries. He called the start of delivery “an incredible opportunity to grow the pie in Massachusetts in terms of the cannabis market.”
Fevry and most of his leadership team are Haitian, and he said he sees the social equity exclusivity period as an opportunity to diversify an industry that, according to commission statistics, has been largely dominated by white men.
State law requires the Cannabis Control Commission to create opportunities in the industry for the participation of people disproportionately affected by enforcement of prior marijuana laws – a mandate commissioners have struggled to meet. “The fact that it’s exclusive for the first three years at least I think is a critical gesture to the fact that it’s really important that these folks have access to a marketplace they can be competitive in,” Collins said.
But Collins cautioned that diversity remains important across all licensing types, and he does not want people to have the perception that the only path for a minority entrepreneur is through delivery. “I hope it’s an opportunity for folks that if they want to pursue delivery they know it’s available to them. But I wouldn’t want to put all our eggs in that basket,” Collins said.
Goines, the head of the cannabis delivery association, said as other states legalize marijuana and start to create their own social equity programs, he hopes Massachusetts can be a model – and other states are able to avoid the delays that plagued the rollout of delivery in Massachusetts. “’I’m happy we got through the hurdles and glad other states got to see this long, drawn-out battle so they could prepare for the possibilities in their states as they try to implement social equity and inclusion,” Goines said.
David O’Brien, president and CEO of the Massachusetts Cannabis Business Association, said he thinks retailers still have concerns about competition and the potential for a small number of delivery companies to dominate the market. But he is hopeful the delivery regulations are written in a way that the businesses will add to the cannabis market, as opposed to taking away from retailers. He noted that building a successful delivery company still takes significant investment and a solid business plan, and it will take time for the industry to fully develop.Delivery will be limited to municipalities that allow adult-use retail; are home to a delivery business; or that notify the commission that delivery may operate there. A company cannot deliver to cities and towns that ban cannabis businesses.
The regulations include numerous safety precautions. Vehicles need two people in them. Trucks will have surveillance cameras and delivery agents will wear body cameras. Vehicles can only contain a limited amount of product and can only drive to fulfill specific orders rather than driving around with a stock of inventory.