When the city authorities in Denver, Colorado approved home delivery of cannabis products last April, a cannabis delivery service license was reserved for a three-year social equity business. Under this plan, entrepreneur-owned delivery services affected by the war on drugs will partner with the city’s licensed marijuana pharmacies to complete deliveries to customers.
The goal of the plan was to help create a diverse cannabis industry in the city while giving those affected by the marijuana ban policy a path to business ownership in regulated markets. To qualify, the owner or family had to be arrested or convicted of marijuana offense, or the applicant had to meet certain residence requirements. However, more than a year after the program began, Denver’s social equity cannabis delivery service providers face challenges that threaten the survival of the company.
Business owners and regulators cite high licensing costs, a saturated cannabis market, and lack of support from retailers as some of the barriers to success in the industry. Of the 206 licensed cannabis pharmacies in Denver, only nine have chosen to partner with social equity businesses to provide delivery services to their customers. Molly Duplechian, executive director of Denver’s Excise and Licenses division, said many clinics may be waiting for the three-year monopoly period of social equity delivery services to end before launching their own home delivery program. Said.
“We’ve heard that some of the existing industries may have been waiting for the monopoly period to end, or they could have their own within two years of investing in Social Equity Transporter. You may be planning to make a delivery. ” Duplechian said Local media.
High cost to raise people
Some retailers cite high license fees associated with launching courier services, while others have high delivery fees and existing orders to integrate with the operations of delivery partners. It points out the difficulty of updating the software of. Others say that there are so many weed shops in town that most customers want to shop directly rather than paying extra to deliver it. Whatever the reason, the challenges are insurmountable for some carriers.
In August 2021, marijuana delivery service Dooba released news when it became the first company to legally deliver cannabis in Denver. Due to past marijuana convictions, the owner of the business, Ali Cohen, has been qualified as an applicant for social justice. But less than a year after the first headlined delivery, Cohen’s business was stagnant and he shut down Dooba.
“About a month before the license renewal deadline, I decided not to go any further.” Cohen told Westward.. “There was considerable cost associated with it, and growth was limited and stagnant.”
“The more regulations we have to comply with and the more fees we have to pay, the harder it is for the enterprise and the more resources we need to meet those requirements,” Cohen explains. “Cannabis is one of the most regulated industries in Colorado, and it comes with a lot of high costs. Companies are closed because they can’t achieve their goals. You’re already in the store here. I’m watching it in a group and growing. “
At least one additional business, Mile High Cargo, has also refused to renew its license. According to Eric Escudero, Excise and Licenses Department spokesperson. Michael Diaz-Rivera, owner of social equity that runs Denver-based Better Days Delivery, said the fact that Dooba is out of service is not a good omen for other Denver cannabis delivery services.
“”[Cohen] I had a business chop. … He had more medical partners than I did. ” Diaz-Rivera told Politico.. “I’ve sold this dream of a generation of wealth that may already be gone, so am I just throwing money into the bottomless hole?”
Noting that few cannabis pharmacies are affiliated with social equity delivery services in Denver, Diaz-Rivera will end its three-year monopoly period before many retailers launch their own cannabis delivery services. I think I’m waiting for you.
“A year and a half has already gone up. [with] This exclusivity. And the clinic is just waiting for it, “said Diaz Rivera. “If they know they can just wait, what good does it do for us?”
Denver proposes to expand its monopoly on social equity for cannabis delivery
To support the city’s social equity cannabis delivery service, Denver authorities have proposed to permanently license a cannabis delivery service specifically for the social equity business.
“We’re not just adopting delivery, we’re also adopting social equity programs, and based on the feedback we’ve heard from our carriers and industry, industry participation isn’t very high. . ” Molly Dupretian said, Executive Director of Excise and Licenses in Denver. “What we want to do is give social equity transporters the certainty that they have a way to move forward over the next two years.”
The proposal also includes reducing license fees for social equity delivery services and retailers affiliated with them to provide home delivery services.
“Some prices have dropped from $ 2,000 to $ 25, so we’re trying to reduce and remove the barriers that really get in the way,” said Dupretian.
The Excise and Licenses Department expects to finalize the proposed changes to the Social Fairness Program before submitting it to the Denver City Council. According to media reports, if the proposal is adopted by the council, it will come into effect within a few weeks.