How to Start a Cannabis Delivery Service in New York?

While it has been in talks for quite a few years, launching recreational cannabis delivery was still a pipe dream for New York-based dispensary owens or cannabis enthusiasts. 

Then came 2021, when the state signed the ‘Marijuana Regulation and Taxation Act,’ which made marijuana delivery officially legal. It opened the door to an untapped but high-potential business opportunity for cannabis suppliers and retailers. 

People are now capitalizing on this industry by starting their cannabis delivery services. If you are also one among them looking to start a cannabis delivery service in New York, now is the time.

However, starting a cannabis delivery business in New York requires you to navigate the complex cannabis delivery regulations that are newer and more stringent than those in states like Oregon or Michigan. 

Whether determining which licenses and permits are needed, defining delivery zones, or managing inventory, the task can become overwhelming.

But worry not – as this blog can help you out. We’ve compiled a step-by-step guide to launch your recreational marijuana delivery business successfully.

4 Legal Aspects to Consider When Starting a Cannabis Delivery Service in New York

Whether you are a retailer looking to enter the cannabis delivery industry or first-timers seeking to set up your delivery-store business, here are the four essential legal requirements you must fulfill.

1. Conditional Adult-Use Retail Dispensary (CAURD) license

Individuals with this license are eligible to apply for setting up adult-use cannabis dispensaries in New York. The NYS Office of Cannabis Management allows these licensees to open a Temporary Delivery-Only location for up to 12 months. 

If you don’t have this license, you may need to apply for New York State Adult-Use cannabis licenses, which the Office of Cannabis Management (OCM) has issued since December 2023.

2. A suitable and compliant location

Finding a suitable location is necessary whether you have the CAURD or AU general licenses. Check the zoning laws in your area to determine whether setting up a dispensary or delivery-only location is permissible.

Presenting proof of control over your proposed location and a certificate of occupancy is also mandatory. 

3. High-end security 

Once you have finalized your location, you must invest in a security system that utilizes industry-leading equipment to protect your dispensary against theft, burglary, or loss. 

This security system can include:

• A perimeter alarm has a central control panel and sensors to monitor your property’s exterior and help detect and avoid any unwarranted entry or intrusion.
• Video camera surveillance will monitor all critical areas, including cannabis storage locations and entry/exit points.
• A failure notification system that alerts you about any potential failure in your security system through audio and visual notifications.
• Reinforced glass in window panes and fully operating biometric locks for sensitive areas only authorized personnel can access.

4. Adherence to Direct-to-Consumer sales regulations and labor laws

As an NYC weed delivery service, comply with all the D2C sales regulations. For instance, you must source your products from only licensed distributors and not indulge in any wholesale or business-to-business cannabis deliveries. 

Another important thing is to ensure that all your general staff are at least 18 years old. Moreover, your delivery drivers must be at least 21 years old. It is recommended that background checks be run on the individuals hired as drivers.

5. Compliance with NYC cannabis delivery regulations

In addition to following general cannabis delivery laws, you must ensure compliance with state-specific regulations.

• Don’t deliver cannabis in public places like parks, community centers, school premises, day-care centers, or places of worship.
• Don’t deliver cannabis to someone inside a motor vehicle.
• Accept only prepaid orders, as cash-on-delivery (COD) is not permitted.
• Don’t send your delivery driver to any location outside the boundaries of New York State.
• Deliver only up to three ounces (85 grams) of cannabis flower and up to 24 grams of concentrated cannabis (oils, tinctures, or edible vapes) to a customer in a day.

Now that you are clear on the prerequisites for a cannabis delivery service let’s delve into the steps you must follow to get started with your delivery service.

5 Steps to Start Your Cannabis Delivery

1. Pick the Right Delivery Service Model

The choice of a delivery model can vary based on factors such as budget. Selecting the right delivery model is indispensable before you start delivering cannabis. 

You can choose from the three primary delivery models based on your unique requirements. 

A. Express delivery (or Dynamic or Ice Cream Truck Delivery)

Also referred to as the Ice Cream Truck or Dynamic delivery model, it involves your delivery team continuously moving around their assigned territories. These drivers have a limited inventory with which customers can order. 

When a customer places an order, it rushes to their address without requiring a trip to the distribution center or retail store, significantly minimizing delivery times. This model can suit you if you want to scale your business rapidly. 

B. Pizza-Style Delivery 

This delivery model involves a central location (your dispensary or retail store) where your drivers sit and wait until your customer places an order. Once you receive an order, you pack, label, and dispatch it to the intended address. 

This model is highly beneficial if you have just started your business and have a tight budget, making paying for the high fuel and vehicle wear/tear costs caused by drivers on the move is infeasible. 

C. Hybrid Delivery

As the name indicates, the Hybrid Model fills the sweet spot between the Pizza-Style and Ice Cream Truck delivery models. It is more appropriate to have an established delivery service with a large delivery radius.

This lets customers place orders from your dispensary, retail store, or delivery drivers’ inventory. While this model is the most flexible, it is also one of the most complex and expensive to operate among the three models. However, it is the most complex logistically and the most expensive to operate of the three models.

2. Define your delivery radius

Start by defining your delivery zones, considering multiple factors, such as the number of drivers, gas costs, fleet size, insurance charges, and overhead expenses. You must also consider your local regulations to determine how far they permit you to deliver.

As a thumb rule, you can start by delivering to a small, densely populated area to maximize your revenue and minimize fuel costs. As your popularity increases, you can consider expanding your delivery zones.

You can check for the distances nearby restaurants, grocery stores, or other dispensaries travel to get a better idea of their delivery radius. It can also help spot the areas they don’t cover and check if your local laws allow cannabis delivery to tap into their revenue potential.

3. Streamline your inventory management

Whether you include cannabis delivery as part of your existing business or start a new delivery-only business, efficient inventory management is non-negotiable. For that, you should keep track of sales trends and identify your best-selling premium cannabis products, which can be cannabis drinks, extracts, or water pipes. 

It helps ensure that you always have these products available in stock to minimize delivery times. However, it is equally essential to avoid over-ordering any product to prevent it from turning into dead stock once the demand goes down. Investing in inventory management software can help you manage your inventory levels efficiently. 

4. Hire and Train Delivery Drivers

Ensure you hire competent delivery drivers above 21, possess a valid driver’s license, and have no criminal background. Physical fitness is also a desired trait.

Delivery drivers interact with customers daily. Therefore, expanding their training beyond manual obligations is important, as is the case for other dispensary employees. 

It must be rather more exhaustive and must include the topics, such as:

• Ensuring safe use of cannabis products
• Verifying the recipient’s age to prevent legal violations
• Emergency protocols that they must follow in case of exceptional delivery circumstances, like accidents, vehicle breakdowns, or inclement weather
• Compliance with your state laws, such as speed limits or maximum weight per trip
• Safe disposal of cannabis product waste
• Practices to maintain customer privacy and confidentiality
• Customer communication skills

5. Streamline Your Cannabis Delivery Routing

You’ve established your delivery radius, determined the most suitable delivery model, streamlined your inventory management, and trained your drivers. So far, so good! Now comes the actual execution of deliveries in the bustling streets of New York. 

It may be tricky without well-planned routes that account for constraints, such as real-time traffic, customers’ preferred delivery time windows, drivers’ working hours, or your business delivery hours. This is where a cannabis delivery route planning software solution like Upper can help you create the most efficient routes to ensure fast and reliable delivery.

All Set to Launch Your Cannabis Delivery Business?

New York is relatively newer and more conservative compared to states like California and Oregon when it comes to recreational cannabis delivery. Therefore, the idea of opening and running a cannabis delivery service may feel overwhelming at first sight. 

However, you can always penetrate this promising market worth over $150 million to establish yourself as a renowned delivery business.

You must obtain the necessary licenses, choose the most suitable delivery model, comply with delivery regulations, and train your drivers on delivery protocols. 

So, are all the steps completed? It’s time to let your drivers hit the road. Upper can help you with that by creating optimal routes that help them reach your customers promptly while minimizing fuel costs and maximizing cost savings.

Don’t believe us, take a 7 days free trial to believe only what you see.