How to Start a Marijuana Delivery Service 

Marijuana’s reach extends to virtually every country in the world, with 147 million people using it in some form. There’s a growing trend towards legalization, and the legal cannabis market is predicted to show a compound annual growth rate of nearly 15% between 2023 and 2028. 

Legalization is a major hurdle for anyone interested in the cannabis delivery business model, because local laws vary. But there’s huge potential for recreational marijuana and medical marijuana delivery.

Why delivery? Because demand for delivery services is growing across the board. Just take a look at the demographics: 55% of Gen Z and 60% of millennials in the U.S. have more delivery apps than streaming services. That’s huge.

If you want to know how to start a marijuana delivery service, you’ll need to consider:

• Legalities
• What types of delivery service to offer
• Creating a business plan
• Partnerships 

But before anything else, entrepreneurs must understand the legal requirements they’re up against and other nuances that make this type of business complex. Let’s start there.

1: Is it legal? 

You can’t move past ideation if you don’t know one simple answer: Is this a legal business in your area? Business owners have the burden of understanding regulatory issues and the evolution of laws in their area.

The laws are often complex:

• In some places medical cannabis is legal, but recreational cannabis is not. Greece, Ireland, and Lebanon are examples. 
• Some countries allow recreational cannabis use but don’t allow it to be sold. This is the case in Italy and parts of Australia, for example. 
• In other places recreational cannabis is still illegal, but possession is not criminalization. 

Canada has allowed medicinal use since 2001 but didn’t legalize recreational use until 2018.

If you want to start a business in the United States, legality is even more complex and varies from state to state. For example:

• Federal law still classifies cannabis as a Schedule I drug, even though state laws differ.
• 38 states have legalized medical marijuana.
• 24 states have legalized recreational use.

For example, California and Oregon both have legalized recreational and medical use, but recreational use is illegal in Iowa. 

If it is legal, check your local laws to know the rules

Even if the laws are in your favor, you’ll need to know licensing requirements, including whether you need a special delivery license.

Every startup in cannabis retail will need to be familiar with the rules:

• What is the maximum amount of cannabis you can sell to a customer at one time?
• How old do buyers need to be to purchase cannabis products?
• Is a cannabis delivery business legal, or is a dispensary the only option?
• If you deliver medical cannabis, what documentation must you collect from buyers?
• How much are the licensing fees and how will these affect your pricing and profitability?

It’s absolutely essential to work with a lawyer to create a legal cannabis business because the landscape is changing, and you’ll need legal guidance to navigate it.

Once you get through all the legal marijuana concerns, you can finally move on to the fun and exciting parts of starting a business!

2. Decide what type of marijuana delivery service to offer

There are several different ways of starting your own delivery business. You can: 

1. Work as a logistics and delivery partner for local dispensaries that already exist.
2. Open your own dispensary and deliver to your customer base either on-demand or using a subscription model. 
3. Run an online store where you have a mobile app, social media, and online presence to attract buyers and deliver items to them.

If you choose to work with existing dispensaries, you have the benefit of letting them handle suppliers. You simply work with your own delivery drivers, acting as an intermediary between the dispensary and the customer.

If you have to find suppliers, procure the cannabis and CBD, and manage delivery vehicles, your business will be more complex to operate. The upside? You enjoy more profits.

All of this must be in your business plan, where you’ll consider the ins and outs of your marijuana delivery business and how you plan to make it a success.

3. Create a business plan

Business plans are intimidating — it’s not just you! But it’s absolutely worth the effort to create one. It forces you to move beyond ideation and dig deep into what will really make your business work. Once written down, a business plan increases your odds of starting a business by 260%.

A typical business plan outline will include:

1. Executive summary
2. Company overview
3. Industry analysis
4. Customer and market analysis
5. Competitive analysis
6. Marketing strategy
7. Operating strategy
8. Management team
9. Financial projections

We have an extensive guide on creating a delivery service business plan where we cover each of these points in great detail.

Note: We have a FREE business plan template that you can use to get started on your plan. Click here to download your own copy.

Outside of the typical business plan sections, we do want to touch on a few things that are specific to a marijuana business:

A: Marketing strategy and legal issues

Cannabis as an industry is in an odd stage of transition. Laws are moving toward legalization in many places, but they haven’t arrived yet. Even if you have a business license, you’ll still face restrictions that don’t exist in other industries.

A prime example is in marketing.

In the United States, you’re generally not able to market a cannabis delivery service on radio or television because transmissions may go over state lines, creating a legal grey area. You will probably need to have extensive targeting and filtering in place if you use social media ads or advertise on search engines.

Additionally, in the U.S., there’s no federal policy in place for cannabis advertising, so regulations are on the state level. This can make it very challenging to market your service or goods. You’ll need to have policies and procedures in place to ensure that any marketing that you engage in is legal. Again — consult a lawyer!

B: Finding funding

If you have funding already, you can skip this section. Funding remains a major hurdle for any type of business, but you’ll find plenty of options available:

• Seed capital. Companies with specialized products may seek seed capital from investors who want to fund their success — but seek funding from friends and family first.
• Cannabis funds. You may find cannabis-specific funds that are available to try and promote the industry.
• Angel investors. An angel investor may invest in your company in exchange for equity in the business.
• Industry companies. Local dispensaries or growers may be willing to invest in your business idea and partner with you.
• Loans. Depending on your location, you may be able to take loans out from banks or other financial institutions.

Funding opportunities vary from place to place, so be sure to research the options thoroughly and add them to your business plan.

C: On-demand vs scheduled delivery

You can offer on-demand and/or scheduled delivery options. These could include:

• Regular scheduled deliveries to subscribing customers. You’ll benefit from monthly recurring revenue and steady income.
• On-demand deliveries to a mix of casual and regular customer. You’ll have to ensure faster delivery options.

If you offer scheduled and subscription options, you’ll have greater control of your delivery routes and revenue. The downside? You may not attract as many customers as you would with on-demand options.

D: Partnerships with cannabis growers or dispensaries

You need to source your products from somewhere, so start building partnerships with reputable cannabis growers or dispensaries. Vet each supplier you’re considering to ensure their products are high-quality and that they’re operating legally.

4. Have a plan for secure storage and transport 

You have your business plan, and you’ve started building partnerships with cannabis cultivars. But what about the storage and transport of your products?

Marijuana doesn’t technically expire, but if you don’t want it to lose its freshness, you need to store it properly. Smart, secure storage is key.

Ideally, your inventory should be stored in:

• Vacuum-sealed packages, OR
• Glass jars with airtight lids

If you plan to store your products for longer periods of time, make sure that your storage space is cool and dry. Moisture and heat will encourage microbial growth, so keep the temperature at around 21°C (70°F).

When it comes to transporting cannabis, there are several important considerations.

• Company-owned vs. driver-owned vehicles. Do you want to invest in your own vehicles? Doing so will give you more control over the customer experience, but will come at an additional cost and responsibility.
• Discretion. Marijuana is a sensitive product. Many of your customers won’t want others to know that they’re having cannabis delivered to their homes. Branded company cars may not be a wise idea.
• Safety and security. Your drivers will be handling and transporting marijuana, which could make them a tempting target for robberies. Make sure their vehicles are in good working condition and equipped with locks and alarms.

If you decide to add branding to your company vehicles, consider adding a sign stating that no marijuana products are stored in the vehicle. Bad actors will be less inclined to target your drivers if they don’t think you’re transporting marijuana.

5. Invest in the right software

At this point, you have most of the logistics figured out, but there’s one essential thing that you need to sort out: software.

Whether you run a dispensary with a storefront, have an online shop, or just want to offer delivery services for other dispensaries, technology will play a big role in your operations.

Depending on your business model, you may need solutions that are unique to your particular delivery operations, but in general, you’ll want to make sure that you have the following:

A: Online ordering system

Customers should have an easy way to order online, but here’s another area of your business where you’ll need to check your local regulations.

For example, New York state requires customers to attest that they are at least 21 years of age when placing an order for cannabis delivery orders. Customers must be residents of New York to order and receive their deliveries.

Other U.S. states and other countries will have other requirements. Although recreational and medicinal marijuana is legal in Canada, each province has its own rules for online sales and minimum purchasing age.   

Your location may also have certain requirements, so research your local laws and regulations to make sure that your ordering system is in compliance. 

The great news for cannabis delivery services is that there are quite a few e-commerce solutions already available that make it easy to:

• Get your online shop up and running
• Accept orders online
• Manage orders
• More

It doesn’t matter whether you’re running your own dispensary or operating strictly as a delivery service for dispensaries, you can find an e-commerce solution that works for your business.

Some of the most popular solutions include:

• Dutchie Ecommerce, which offers ordering options for delivery, curbside, or in-store pickup. Kiosk and more.
• Flowhub (pick-up only), which is really just an order-ahead platform — still very useful for dispensaries.
• Weave, which integrates easily with a point-of-sale (POS) system and has customer-facing features (purchase history, loyalty points, etc.).

Weigh your options carefully and consider the costs of each solution. If you’re also running a physical cannabis dispensary, you’ll need to make sure that your online ordering system integrates with your POS and plays nicely with your current tech stack.

Once you have your ordering system figured out, consider whether you want to offer a delivery app.

Do you need a cannabis delivery app?

Today’s consumers prefer apps. In fact, 57% of shoppers say they prefer mobile apps to other channels. Why? Because they’re quick and convenient, and the in-app experience is already optimized for mobile devices.

Offering a companion app for your cannabis delivery service will incentivize customers to do business with you.

Apps allow customers to:

• Place orders
• Track deliveries in real-time and receive notifications
• Browse your inventory
• Contact your support team

An app also makes it easy for you to offer:

• Loyalty programs
• Special discounts

Apps are worth the investment, but if it’s not in your budget at launch, you can make it a future goal.  

B: Route planning and delivery management software

Having a reliable and robust online ordering system is a great start, but once customers place an order, you need to have a way to manage deliveries and dispatch drivers. That’s where route optimization and delivery software comes into play.

The right software solution can help you:

• Plan smarter in-house delivery routes.
• Make your routes cost-efficient and reduce your cost per delivery.
• Make your drivers happy (intelligent routes are less frustrating and time-consuming!).

Routific can help you do all of this and more. In fact, route optimization is our specialty. We can help you:

• Reduce your cost per delivery by 25% compared to manual route planning.
• Create optimized routes based on your driver preferences, traffic patterns, priorities, and more.
• Dispatch routes to your drivers using our user-friendly driver app. You can even track their progress in real-time and review their stats.

When you’re dealing with fresh deliveries (like cannabis), we also know that time is of the essence. For example, cold-pressed juice delivery service Greenhouse Juice faced two challenges: 

1. Making quick deliveries.
2. Ensuring customers were there to receive deliveries.

Routific solved that problem by optimizing their routes and ensuring that customers received notifications when their order was on the way. 

We make it easy to provide a real-time delivery tracker link to your customers, so they know exactly when their cannabis delivery will arrive. That will save your drivers time, as customers can be ready and waiting to provide their ID when their order arrives.

Route planning and optimization will play a key role in the success of your marijuana delivery service. Take the time to find a solution that aligns with your goals and will meet your needs.

As more regions of the world continue to legalize medicinal and recreational marijuana, the demand for cannabis delivery services will rise. Now is the perfect time to launch your delivery service, but proper planning is key. Having a solid plan and the right technology to manage orders and deliveries will help you get started on the right foot.