Cannabis dispensaries have not put their foot to the gas to offer delivery services in Denver.
The city will only grant cannabis delivery licenses to brick-and-mortar establishments, but until July 2024 they must contract those services with companies that have a transportation license under Denver’s social equity program, which are businesses with owners who were convicted of cannabis crimes when it was widely illegal or owners who operate in census-designated poor areas.
Delivery services in Denver have been legal since April, and the first delivery was made in August, but since then there has not been the surge in delivery the city had hoped, according to Eric Escudero, a spokesman for the city’s Department of Excise and Licenses.
“We are seeing a concerning trend,” Escudero said. “Stores have to get a delivery permit, then develop a business partnership with the social equity delivery companies.”
Escudero said large marijuana companies indicated they supported social equity programs at various public meetings leading up to legalization. But since the licensing for transportation services opened, only 11 out of the 204 retail cannabis locations in Denver, or about 5 percent, have applied for a delivery license.
“These new delivery companies that are social equity applicants, they can’t get a bank loan to pay for the vehicles, required security measures in vehicles or very high-cost vehicle insurance because marijuana is still illegal at the federal level,” Escudero said. “They can’t take federal tax deductions either, so they need businesses now to partner with.”
The cost of obtaining a delivery license in Denver is $2,000 for both transporters and deliverers.
Denver’s Department of Excise and Licenses hosted a social equity informational event on Oct. 16, and Escudero said 30 cannabis businesses had information booths and more than 300 people attended, including Shanda Lacompt of Canna Couriers, a social equity cannabis transportation service.
Lacompt said she has reached out to about 50 brick-and-mortar dispensaries seeking to contract with them for service, but with no luck so far.
“I was really surprised,” she told BusinessDen. “We have been doing a lot of networking and asking a lot of friends and family members how they would feel about having cannabis delivered to their home, and they’ve been real positive. What’s holding us back is contracting with the dispensaries.”
Tim Cullen, the CEO of Colorado Harvest Company, said his business received its Denver delivery license last week, but his Aurora store has had its delivery license for six months, as that city legalized the transportation services earlier.
Cullen said it may be because many cannabis companies renew their licenses with the state at the beginning of the year and they may not want to add a delivery license to the cost of that at this time.
He said some customers may not know cannabis delivery services are available, but people should expect to see an increase in the demand for delivery services soon, as calls for services in Aurora jumped considerably as time went on.
“There was this little ramp-up period for the first few weeks,” Cullen said. “It just gained in popularity when people could see how convenient it is. (Customers) just need to learn that the service is available.”
Cullen said about a third of his initial calls for delivery service came from Denver customers, but before this spring his drivers could not yet transport cannabis orders to the city that kicked off the legalization movement.
The company he uses for delivery is through a social equity license holder who owns 51 percent of the business Go Harvest, while Colorado Harvest Company owns the remainder.
Cullen said although there have not been many delivery license applications so far, he said it would be detrimental to cannabis companies to wait three years until the social equity requirement ends.
“They’re going to miss the boat,” he said. “That ship is going to sail.”
A list of all delivery and transportation licenses is available on the city’s cannabis delivery license application website. Some stores may have more than one license listed for retail or medical services and various locations.