By At last count, there were nearly 40 states – along with the District of Columbia and four U.S. territories – with some sort of legal marijuana industry. Some allow only medical cannabis while others allow both medical and recreational use. At this point, it would seem that nationwide delivery should be a thing. But it’s not. Why?
There are a number of hindrances to nationwide marijuana delivery. The biggest hinderance of all are the differences in state and federal regulations. The laws are so different to that it is difficult for any company to succeed at establishing a nationwide delivery platform. It is easier done at the state and local level, but even that is challenging.
Massachusetts Company Shutting Down
Lantern is a Massachusetts company that tried to make a go of marijuana home delivery via a mobile app. Their business model was similar to that of so many other app-based services that deliver everything from groceries to restaurant meals. They recently announced their intention to close.
The company apparently did very well in their home state. They were hoping to expand outside of Massachusetts, beginning with neighboring northeast states. But it quickly became clear that the plan wasn’t going to succeed. Why? Because many states do not allow the use of mobile apps to arrange for home delivery using third-party contractors.
It would be nearly impossible for Lantern to set up an efficient and streamlined delivery service by having to accommodate the different regulations in every state. It is just too much work. As for why the company has decided to not keep doing business in Massachusetts, it is hard to say.
Home Delivery in Utah
There is no indication that Lantern intended to do business in Utah. But the Beehive State offers the perfect illustration for why a nationwide delivery network is so difficult to establish right now. For starters, there is no recreational market in Utah. Only medical cannabis is allowed. That automatically limits market demand in the state.
Second, delivery companies must utilize specially equipped vehicles with onboard safety and security features. This particular requirement all but eliminates the possibility of an app-based business that relies on individual consumers acting as contracted drivers. Your typical contractor doesn’t have the kind of money necessary to buy and outfit a compliant vehicle.
Despite all of that, Utah dispensary Beehive Farmacy says home delivery is legal in the state of Utah. There is at least one company that operates throughout the state. Whether or not others will get into the market remains to be seen.
The Cross Border Issue
Yet another problem for would-be delivery providers is the issue of carrying marijuana across state borders. If a delivery company operates only inside the borders of a given state, there are no issues. But that delivery company could not cross state lines, for delivery purposes, without breaking federal law.
To a company that wants to establish in nationwide delivery network, not being able to cross state lines introduces unnecessary inefficiency. in Lantern’s case, cross border deliveries would have been a problem even if their app-based business model were not.
The bottom line is that state and federal marijuana regulations can be drastically different in everything from production to distribution and consumption. Until the rules are reconciled, it is more attractive for delivery companies to operate on a state-wide basis. Yet such a small market makes it difficult to justify the expense of developing an app-based business model. That’s why you don’t currently see the marijuana equivalent of Instacart or Grubhub. Will we ever see it? Who knows?
