To ensure patients have access to the medical marijuana they need without requiring that municipalities allow dispensaries, some states have decided to approve statewide cannabis deliveries, which includes deliveries to cities, towns, and other municipalities that previously banned dispensaries and retailers.
It’s not uncommon for states to allow local municipalities to ban cannabis businesses within their borders, but in doing so, they’re limiting access to the medical marijuana that patients within those cities and towns need. As a result, patients have three options. They (or their caregivers) can travel longer distances to make a purchase, forego medical marijuana to treat their conditions, or buy from the black market.
In all three cases, patients typically don’t get the medical marijuana they need or they’re forced to add to the illicit market’s sales. The same is true for consumers who want to purchase recreational cannabis. Without access to a licensed retailer, many turn to the black market.
Fortunately, some states have recognized that when municipalities ban cannabis dispensaries or retail locations, the result isn’t less drug activity. In fact, dispensary and retailer bans often have the opposite effect and ultimately benefit the black market.
To solve the problem, some states are approving statewide delivery rules, but increasing access to medical and recreational cannabis through statewide delivery is facing obstacles from local municipalities.
Statewide Cannabis Delivery in Oregon
On December 28, 2018, a rule from the Oregon Liquor Control Commission went into effect in Oregon, which allows medical marijuana patients to order cannabis for delivery in any municipality, including those that have prohibited licensed marijuana activity. That means medical marijuana deliveries can be made to patients in towns that have banned cannabis sales and dispensaries.
While many town officials disagree with the statewide delivery rules, the Oregon Liquor Control Commission believes the rules give medical marijuana patients access to the marijuana they’re entitled to, particularly those who don’t live close to dispensaries (i.e., in “cannabis retail deserts”) and can’t travel.
Statewide Cannabis Delivery in California
In January 2019, California began allowing licensed cannabis businesses to make adult-use cannabis deliveries in municipalities that banned retail stores. Considering that the California Cannabis Industry Association estimates fewer than 20% of California’s cities allow retail stores to sell cannabis for recreational use (in Los Angeles County, more than 93% of cities ban retail sales), this was great news for residents.
The regulations allow licensed retailers to deliver to any jurisdiction in the state as long as orders are placed with a state-licensed retailer, the delivery is made to the same address as the one from which the order was placed, and the delivery vehicle doesn’t display any type of advertising, images, or messages that promote cannabis.
For many licensed retailers that are competing with thousands of unlicensed delivery services that already deliver in cities where licensed stores are banned, the new rules will enable them to better compete with the black market.
However, statewide cannabis delivery in California is the focus of multiple lawsuits. On one side, Santa Cruz County and 25 California cities sued the California Bureau of Cannabis Control in April 2019 claiming the delivery rules violate the state’s 2016 cannabis law, which gave local governments the authority to ban commercial cannabis activity.
In a separate case, the California Bureau of Cannabis Control filed a motion to join a lawsuit by Salinas-based East of Eden Cannabis Co. against Santa Cruz County arguing that the state’s law allows licensed businesses to deliver cannabis statewide – even where local bans on commercial cannabis activity are in place. The California Bureau of Cannabis Control has stated that the January 2019 statewide delivery rule simply clarified existing rules that allowed licensed businesses to deliver cannabis to any jurisdiction within the state, but it didn’t change the existing rules.
The Future of Local Bans vs. Statewide Delivery Rules
It remains to be seen what will happen with the lawsuits related to statewide cannabis delivery in California, but it would seem that allowing statewide delivery of cannabis, particularly medical marijuana, would solve patient and consumer access problems and divert some business away from the black market.
If statewide delivery ends up working well in Oregon and California, it’s likely that other states will follow. Consider Michigan where recreational cannabis sales are expected to begin in the spring of 2019. Currently, 70% of municipalities have opted out of allowing recreational cannabis businesses within their borders.
As of October 25, 2019, 1,201 of Michigan’s 1,773 municipalities had opted out, but they can opt in at any time in the future. It’s expected that some of these municipalities will opt in once they see how recreational sales and the industry works first. The city of Detroit has already indicated that it’s opting out temporarily until it develops effective rules and ordinances. Still, a 70% opt-out rate isn’t good and will significantly limit patient and consumer access in Michigan.
Things are only slightly better in Illinois where 47% of municipalities (27 out of 30) have banned cannabis sales. In other words, consumers will not be able to purchase adult-use cannabis in nearly half of the state’s cities, towns, and other municipalities when it’s available in 2020.
Statewide delivery could be a viable solution to patient and consumer access problems, but as we’re seeing in California, implementing statewide delivery won’t be easy in many states.
Originally published 1/15/19. Updated 11/29/19.
Susan Gunelius, Lead Analyst for Cannabiz Media and author of Marijuana Licensing Reference Guide: 2017 Edition, is also President & CEO of KeySplash Creative, Inc., a marketing communications company offering, copywriting, content marketing, email marketing, social media marketing, and strategic branding services. She spent the first half of her 25-year career directing marketing programs for AT&T and HSBC. Today, her clients include household brands like Citigroup, Cox Communications, Intuit, and more as well as small businesses around the world. She has been working with clients in the cannabis industry since 2015. Susan has written 11 marketing-related books, including the highly popular Content Marketing for Dummies, 30-Minute Social Media Marketing, Kick-ass Copywriting in 10 Easy Steps, The Ultimate Guide to Email Marketing, and she is a popular marketing and branding keynote speaker. She is also a Certified Career Coach and Founder and Editor in Chief of Women on Business, an award-winning blog for business women. Susan holds a B.S. in marketing and an M.B.A in management and strategy.