Just because you can, doesn’t mean you should. If you’re a retailer with a delivery license, let that marinate a bit.

Having a license to deliver weed is not a good enough reason to do it. That said, beyond the license, there are some solid reasons to launch delivery and some solid reasons to pump the brakes.

Sometimes it’s best to defer to the wisdom of experience. This is what I learned when I launched delivery at Tropicanna.

Why I Launched Delivery at Tropicanna

When I opened Tropicanna’s doors, I had made a conscious decision to leave delivery for another day. I was maxed out with the retail startup and it seemed like a crazy reach to launch another startup that I knew nothing about.

Then Covid-19 hit and the crazy reach became an absolute, immediate necessity. I pulled the delivery regs, drafted a compliance memo for the ops team, hired a seasoned GM from a recently failed delivery, and turned them loose.

At the same time, Eaze approached us to deliver under our license. Talk about serendipity. I cut the deal, but the structure was novel, complicated, and I wasn’t sure it would work.

Why’d I do it?

We just opened, we were in the red, and they cut big checks that stopped the bleeding. Moreover, they would operate out of our building and be open with their SOPs. It was a perfect opportunity for our delivery team to accelerate their learning curve.

It was the right call under the circumstances, it all worked out (with some bumps in the road), and I’m grateful for the experience. That said, the exigent circumstances that compelled me to launch delivery are gone and cannabis retail has returned to normal (or as normal as cannabis retail gets.)

So…

Can a Dispensary Compete With Delivery Services?

It depends.

As challenging as retail is, delivery is next-level. It’s a brutally competitive low-margin game squeezed by extreme operational restrictions, taxes, and black market delivery that can drop a dub sack on your customer’s porch at half the cost. Further, you have monster delivery companies like Hyerpwolf and Eaze that already dominate your market and are very good at what they do.

That said, the savvy retailer has few things in their favor. They already own a delivery license, some of the infrastructure (purchasing, inventory, website), have local brand awareness, and a customer database. These can be leveraged.

Beyond these factors, delivery strategy matters. Moreover, where you land on the future of cannabis retail may also influence your decision. While it’s popular to say delivery is the future, that’s far from the whole story.

Is Weed Delivery the Future?

Amazon. Uber Eats. DoorDash. Instacart. You can get almost anything dropped on your doorstep in a couple of hours, including weed. But will weed delivery make brick-and-mortar cannabis retail obsolete?

Brick and Mortar Retail Is Resilient

Look around. Sure, delivery is everywhere, but brick-and-mortar retail has been surprisingly resilient. People still like to shop, but not just anywhere. If you want to get them off the couch it takes a destination retail experience that’s exceptional.

This story tells the tale:

Amazon started as an online bookseller. Book delivery was supposed to crush brick-and-mortar bookstores. Yes, Borders Books closed. But hip, independent bookstores like Blue Willow and Books & Books are booming and over 300 independent bookstores have opened nationally in the last couple of years.

Create a Destination Dispensary Experience

So, if indie book retailers can create an experience that stands up to Amazon, it seems reasonable to think that weed retailers can create an experience that stands up to Hyperwolf and Eaze.

My favorite question to ask cannabis retailers that want to grow their business is “Why should someone shop at your dispensary? A compelling answer to that question is essential if you want to compete with delivery (and other retailers and the black market.)

You need to give people some damn good reasons to visit your dispensary and create an experience that’s worth the trip.

The Best Delivery Strategy for Retailers

There’s a retailer out there who will make me eat these words but I’m going to say them anyway because it holds for 99.9% of dispensaries:

Your delivery will not compete with monsters like Eaze and Hyperwolf. You will not beat them at their game. That said, you don’t have to play their game.

How Hyperwolf and Eaze Play the Delivery Game

Eaze and Hyperwolf deliver just about everywhere and both rely on the “Ice Cream Truck” Model” to get that done. With the Ice Cream Truck Model, a driver loads up with products at the depot, stays in the field, and covers a wide-ranging territory. To make this model work, the menu must be limited.

How Your Dispensary Should Play the Delivery Game

This is the basic strategy I ran to build a successful delivery service at Tropicanna:

• Limit your delivery zone to areas your dispensary serves to leverage your brand recognition and your customer database.

• Use the “Pizza Delivery Model”. With this model, the driver leaves the depot with packed orders, delivers, and returns to the depot for more orders.

• Offer your whole menu. This means more choice and it also means more localized choice. Menus serve their communities so your menu should feature more local favorites than a generic delivery menu that serves the entire state.

This delivery strategy won’t make you rich, but an additional 50-100 sales a day doesn’t hurt, your loyal customers will appreciate the service, it protects your dispensary from losing customers to another delivery service, and it will expand your customer base.

In addition, you’ve also diversified your business and hedged for an uncertain future. If delivery does kill retail, you’re set up to pivot.

Delivery Operations

You’re going to need a few things to make delivery happen. Treat this more like a jumping-off point than an exhaustive list:

1. Space: You will need a call center and driver lounge.

1. Personnel: You will need to hire an experienced GM, sales specialists, dispatch, fulfillment, and drivers.

1. Compliance: You need to track vehicles in real-time and product needs to be secured in a locked container at all times. Video surveillance is recommended.

1. Website: Delivery must be added as a feature as well as a system for verifying the buyer’s location and age.

1. Ecomm: A credit/debit solution is preferred although these solutions may violate federal law. If you plan to implement, vet with counsel and choose wisely.

1. Insurance: Driver’s cars must be insured with at least the minimum state-required coverage.

Delivery Marketing

When people search for a dispensary, they use the search term “dispensary near me”. When they search for weed delivery, they may use a city name + delivery or search terms like “weed delivery” or “cannabis delivery.” Regardless, delivery will require a marketing campaign distinct from your dispensary if you hope to grow that business.

Insider Tip: One of the things we did at Tropicana to improve SEO performance for the dispensary and delivery was to change our name to “Tropicanna Dispensary and Weed Delivery.” We had to file a new DBA and make some other minor adjustments, but the results were worth the lift.

Should Your Dispensary Launch Delivery?

Just because you can, doesn’t mean you should. But if you have the bandwidth, the space, the budget, and the right strategy, delivery can diversify, protect, and add value to your retail business.

If you’d like to know more about the best marketing strategies for weed delivery, you can hit up deeproots partners anytime. Whether it’s delivery or retail, we’re always here to help you sell more weed.