Civilized's podcast 'Cannabis & Main' - brought to you by Fluent - is back with celebrated marijuana journalist Riccardo Baca returning to host the second season. To kick things off, Ricardo chatted with Jordan Wellington - a public policy advisor for the cannabis law firm Vicente Sederberg and and former member of the Colorado Marijuana Enforcement Division. Together, Ricardo and Jordan tackled the issue of legal cannabis deliveries, which are legal (and profitable) in states like California but banned in others (such as Colorado). Ricardo and Jordan discussed that ban, as well as why legal delivery services are important and what good marijuana delivery regulations might look like.
Ricardo: Hello, hello and welcome to Cannabis & Main, a Civilized podcast where we extract one element from today's cannabis-scape and go deep.
I'm your host Ricardo Baca, founder of Grasslands: A Journalism-Minded Agency, and it is so great to be with you today. You can learn more about this show alongside the marijuana news and cannabis lifestyle coverage you crave from Civilized, found on the worldwide web at Civilized.life.
This week, we're going to do a deep dive into cannabis and delivery with a guest who I would argue knows more about this particular subject of cannabis delivery than 99.9 percent of the cannabis industry. We're going to have some fun, but first, it's mid-2019. Some states have legalized some sort of cannabis delivery programs and others have not. In fact, I think a majority of legal states do not currently offer a delivery option when it comes to medical or adult use marijuana.
For example, I was in San Diego a few weeks ago, holed up at my hotel for the night and working on this keynote address I was giving at an event the next day. I bypassed the Sheraton's questionable room service menu in favor of Uber Eats, which allowed me to try Richard Blais' Crack Shack, which I highly recommend. Thanks to my friend Eric Williams for the recommendation because those chicken sandwiches are legit! As I was waiting for The Crack Shack delivery, I remembered that I also wanted to try some of the new cannabis products that were now on California shelves, but I still had work to do. I was tied to my hotel room by the marina, which is definitely a dispensary desert, to say the least. After giving up the ghost, I remembered the California tradition of cannabis delivery is now 100 percent legal. Sure enough, my weed actually beat my chicken sandwich to my hotel room. It's just a modern miracle.
Of course, I'm not alone. We have everything delivered these days from groceries, to take out, to toiletries, to office supplies, not to mention beer, wine and liquor. Of course, the paradox arises, as it often does in this cannabis conversation. Why not offer cannabis delivery, especially when so many city councils and state regulators continue to opine about not wanting stoned cannabis consumers on the road?
News Clip: We don't turn away people from their pharmacies when they can't get things delivered. We just allow people to get their medicine delivered to them. I don't hear them worried so much about FedEx trucks being knocked over everyday. The proof's in the pudding. Go to California.
Ricardo: Cannabis and Delivery—let's talk about it right here on Cannabis & Main.
Jordan Wellington formerly worked with the Colorado legislature and Marijuana Enforcement Division, and now he works in government affairs and public policy for VS Strategies and Vicente Sederberg.
Jordan, hey, give me a brief history of cannabis delivery and how we got to where we are today.
Jordan: Well, there's a long history of cannabis delivery when you really think about it.
Ricardo: I know, but this show's 20 minutes!
Jordan: The brief history is that there's two sides to the history of cannabis delivery. One is the regulated side and one is the black market side. Depending on where you grew up and the nature of your relationship with where you acquired your cannabis in the black market, which is for most of us these days who are not of the young 'un generation, that's how we grew up. We grew up getting cannabis on the black market. Sometimes you had to go to your dealer's house and quite frequently your dealer would come to you. The first cannabis delivery service I ever recalled using was in the late 90s in New York City.
You would call up a company and an hour or two—or sometimes on a bad day, three or four hours later, which were some of the most frustrating afternoons we had, you'd sit around and wait, wait, wait, wait, wait. Eventually you'd get someone show up at your door with Sensi Seed boxes, those little plastic, rectangular boxes that at least some of us from back in the day remember getting in New York City. You'd get like two grams maybe for like 50 bucks. I think we also appreciate the price drop that comes with a regulated market.
Ricardo: Serious, thank goodness.
Jordan: Those were my first experiences with cannabis delivery. Not necessarily the bastion of efficiency that we see with modern delivery services, but it was really kind of where a lot of this stuff came from. Then on the other side, we see California largely driving the way. Delivery has existed in California for a very long time, has been part of that market for a very, very long time. That has become a way that customers are used to acquiring cannabis, and I think for many of them, a huge benefit. We're starting to see more and more states pick that up as businesses across the country become interested in serving their customers, serving patients in a way that meets their needs at their home, at their place of business, depending on what state you're in, and not restrict them to shopping in a brick and mortar establishment, which certainly works for many consumers and patients, but other ones would prefer to have cannabis delivered to them. If it can be done safely, all the more reason for businesses in the regulated market to be able to do such a thing.
Ricardo: It seems so quaint now, but you mentioned California leading the way in this conversation, and certainly they have. Delivery is a part of Proposition 64, right? That is a legal part of that market now.
Jordan: Yeah, and they've adopted regulations to govern how it works. Some of them are very thoughtful and very interesting regulations to address particular kind of quirky aspects to the market, but delivery has absolutely been part of California's system for a very, very long time and will continue to be. It is my belief that delivery will become a critical part of any cannabis market.
This is about consumer choice. This is about patient access. If we're going to stay true to the vision of Prop 64 and legalization of cannabis across the board, this was not a movement born to enhance business interests. We certainly are supporters of the cannabis industry. We love it. We believe in it. We want it to grow, but at the end of the day this is about consumers. This is about patients. This is about safe access. This is about being treated equally and legitimately among other communities who maybe prefer other drugs and other things that they like to do that are also legal. If you can get anything from food to alcohol to prescription drugs and all the opiates you can dream of delivered, there seems to be no reason that the cannabis community can't get in the fun and have the products that they desire delivered to their house.
Ricardo: 100 percent. Tell me this, because you have skin in the game. Right now we're in Denver, Colorado. You're working on this issue locally?
Jordan: Yeah, I'm kind of a food nut. I prefer to pick out my vegetables and my meat and my fish, but other than that, pretty much everything gets delivered to our house. The dispensary and the grocery store are really the only two stores that we frequently go to a lot of the time, but for patients it's different. This is something we've heard for a really long time. A lot of patients really want a specific product or a specific strain with a specific cannabinoid profile, or there's a specific cultivator that they trust. If that product, that strain, that cultivar—whatever we're talking about—isn't readily available at the dispensary around the corner, you can have a lot of challenges driving long distances to acquire the particular medication that you need.
Ricardo: If there is a dispensary around the corner even.
Jordan: Even if there is a dispensary around the corner, and then one of the consistent hallmarks of cannabis regulation across the country is age restrictions. If you are a parent of a pediatric patient, it's really tricky to get to the dispensary because unlike going to the pharmacy, if you need to pick up a prescription for your child who's sick, you can take your kid to the pharmacy with you. You cannot take your kid to the dispensary with you.
Ricardo: Oh, interesting. I never thought about that aspect.
Jordan: They have age restrictions.
Ricardo: Of course.
Jordan: You can't take your child to the dispensary. We've heard stories for years about parents needing to acquire childcare to pick up medicine for their kids. That's really challenging. I think, across the board, this is a consumer rights issue. This is a patient access issue. In addition to opening up brand new markets, one of the folks we're working with, Peter Barsoom at 1906, had commissioned to study and he said 59 percent of female consumers have never been in a dispensary. That they're nervous to go into the store. There are segments of the market that either their friends are shopping for them, or they're still patronizing the black market, or don't have the access that they would truly desire that might be able to replace cannabis with some more dangerous drugs or maybe help them live a more full life. They're not participating in the market because of the fear associated with going into a dispensary. Whether those fears are founded or not, they are those people's fears.
Ricardo: They exist.
Jordan: They exist. There's a similar statistic out there for boomers as well as some other age populations and things like that, where we would really be able to serve a greater segment of the market, expand the market. In fact, today in Colorado, if you Google right now, "Colorado marijuana delivery," there will be businesses that pop up, that appear to be legitimate legal businesses that will deliver cannabis to your door that I opine are of questionable legality, and certainly are not regulated and licensed by the state.
If that's what's going on, we have an opportunity to replace black market activity, which is kind of the whole point of legalization. We have an opportunity to expand access to consumer bases that currently are not really having the full experience of legalization one way or another, and most importantly, expand access to patients who we want to make sure we understand where all of this movement came from, where all this started from. It truly has been a patient-focused movement from the start. If we are going to advance this industry forward, we should keep that in mind, and as we're growing this industry, as we're advancing cannabis legalization for everybody, making sure that we do respect patients, we do respect patient access and making sure that we do everything we can to make accessing cannabis for patients who really need it easy and simple and not challenging in their lives.
Ricardo: Why are some dispensary owners against this? What are those protectionist concerns that we should know about?
Jordan: I think everybody has different reasons why they support things. Everybody has different reasons why they oppose different pieces of legislation. I'm fully in support of delivery, there's just this one aspect of it. I'd like to see it done this way or I'd like to see it done that way. As with most things in politics, the way that they would like to see it done is pretty tailored to their business model and how they like to do things. The vast majority of the industry is supportive of delivery occurring. The tricky part is how.
Ricardo: There you go.
Jordan: When you get into the how, I think, is when you get into people being like, "Well, I'd like to have it done this way," or, "I'd like to be able to do this." Manufacturers would like, in certain circumstances, to be able to deliver direct to consumers. People who own brick and mortar retail businesses are like, "Well, wait a minute. That's my segment of the market, not your segment of the market."
Jordan: "You do your thing. I'm going to do my thing." Other folks are smaller operators and want to make sure that they can leverage a third party delivery service to handle the last mile for them because they don't have the financing to acquire vehicles and outfit them in accordance with whatever regulations around security and safety are going to come up with, as well as hire full time employees. They'd like to kind of hire a third party company to handle that piece of it for them. Other folks are concerned about risk and liability associated with doing that, training around doing that, or that eroding some of the relationship between the consumer and the dispensary. Other folks are concerned about public safety issues and taking this outside.
There's a myriad of concerns that people have expressed. I think that as policy people, as the people working on this bill, what we have tried to do is first and foremost pass a bill. Because at the end of the day, if the bill doesn't pass, then no consumers and no patients get delivery, no businesses can expand into this opportunity.
How do we find a way that tries to create as level of a playing field as possible, where the government is not forcing you into one business model or another business model, but respecting the existing industry, not causing massive market disruption—which we know is not good for any industry, but especially cannabis—and making sure that we only restrict patient access in the ways that we need to while respecting the local governments, respecting law enforcement's concerns about public safety?
I've worked on a lot of public policy issues in my time in cannabis, and before I fixated solely on cannabis, other things as well. This one is thorny. There's a lot of patient interests, consumer interests, business interests of all different—not just sizes but segments of the industry, in addition to local governments, in addition to law enforcement. Threading a needle that everyone can at least maybe not like, but could be comfortable enough with, has been challenging. I think that we have a really good piece of legislation. We've worked a lot with different kinds of stakeholders. We certainly have not taken every suggestion that has come our direction from every individual stakeholder.
Ricardo: You can't please everybody.
Jordan: We have a lot of stakeholders where one person is saying, "I'm going to oppose the bill if you do this," and then literally if we do that, someone else is like, "I'm going to oppose the bill if you do that." It literally would be impossible to make everybody happy because we have people pulling in different directions. What we've tried to do as much as possible is just create a level playing field, focus on protecting consumers, protecting the public at large, and putting forth a piece of legislation that we think is both responsible, consumer and patient driven, as well as expanding opportunity for large businesses, small businesses, new entrants to the marketplace. That idea that someone can do the last mile delivery for a dispensary, that is a lot less costly of a business for someone to get into than opening up a brick and mortar store. We think we're creating an access point that has reduced barriers to entry, which people can call social equity or they can call other things social equity.
I tend to be a little bit more a market-oriented when I think about those things. I'm looking for like, how do you let someone either get into the industry in a way that's cheap that doesn't need $5 million of investment? We're trying to create something that has — even if everybody's not happy with it, there is something for everybody in there that maybe when all the dust settles and they look at it and they're like, "I don't know, maybe there's a business opportunity here for me," or, "Maybe I can start a new business," or, "Hey, I've been driving for Uber Eats for a while, but I'm like a huge cannabis consumer and I love cannabis."
Ricardo: Interesting. "I'm tired of my car smelling like hamburgers."
Jordan: Right, but it could smell like weed, which is way better.
Ricardo: Way better, way better.
Jordan: Especially if you like try to go on a date later, you pick up a girl and like all of a sudden your car smells like cheeseburgers.
Ricardo: Oh, the worst.
Jordan: It's been a long time since I've been on a date, like 15 years, but in theory, I would assume that what holds true, at least back then, still holds true, is you don't want a smelly car when you pick someone up.
Ricardo: Tell me this though. I'm curious, because you mentioned the retailers, the manufacturers, all of that makes sense. It's complicated. You're never going to please everybody. What about the growers? Do they have an opinion here? Are they trying to go? Are they trying to skip their dispensary partners and go direct to customers, or do they have an opinion on this? I'm guessing they must.
Jordan: I would think that to some extent that they are aligned with the manufacturers, but it's important to remember that Colorado's regulatory history has not produced a lot of independent growers. Back in the day they forced all the medical businesses to vertically integrate. The vast majority of large scale-businesses in Colorado are vertically integrated dispensary chains. We don't have a ton of independent cultivators that are looking for direct access to consumers. In fact, at the end of the day, I think that those businesses, they're looking at things not just through an independent cultivator lens. They're largely looking it through a dispensary lens. There are a handful of independent cultivators in Colorado. I'm not saying that there are none, but it's a much smaller number of voices and ones that really have not been as directly engaged in this particular process.
Jordan: The ones that I know of don't really employ regular lobbyists down at the capital, don't get engaged in these kinds of things. The folks that are doing that are the larger businesses, either part of an industry group or a dispensary chain. What you're hearing most loudly are the voices of large dispensary chains, smaller mom-and-pop dispensaries, and manufacturers, obviously, as well as consumers, law enforcement, local government, all of these different groups. The cultivators here are different. I think if you had this conversation in Washington where a lot of the cultivation is much more independent, the cultivators would engage on that issue very, very differently, whereas when you have the LivWells, Native Roots of the world in Colorado, those businesses are vertically integrated. They're cultivating and retailing and so they're not looking at it through the same prism as an independent grower.
Ricardo: Totally makes sense. What about this? You mentioned the lawmakers. Are they still concerned that there's going to be mass robberies of these drivers carrying around a lot of expensive product as well as potentially cash, although I'm guessing this is going to be a cashless transaction?
Jordan: The regulations allow the Marijuana Enforcement Division to adopt regulations governing payments. We kind of want to leave it flexible at the statutory level because then if everything legalizes at the federal level and you can start using credit cards, we don't want to have to go back and pass another bill.
Ricardo: Oh, makes sense.
Jordan: It's a lot easier to change a regulation than it is to change a statute. Yeah, I mean the law enforcement concerns are those. There could be robberies of drivers. There could be robberies of this. What happens when you take this out of the very controlled environment of a store and you are moving it to delivery, right now our bill is restricted to private residences, so to someone's house? There are concerns about high school parties and big brothers and all of these different things.
We feel like the bill does a good job of addressing those things. It creates broad rule making authority for the Marijuana Enforcement Division on a variety of public safety issues. We've had several meetings with law enforcement to talk about training and different kinds of ways that this can be addressed: restrictions on inventory in vehicles, potential restriction on cash in vehicles, all of these different kinds of things, if cash was even allowed, which my guess is it's probably not, but that remains to be seen. At the end of the day, I'm not sure there is really anything that we could put into this bill that would result in law enforcement dropping their opposition.
At the end of the day, I think the truth of the matter is that law enforcement is not comfortable with cannabis delivery at all, and quite frankly, and in moments of candor, they will tell you that they are not comfortable with cannabis legalization and have concerns about legalization writ large. I think that they basically were in a position where they kind of just oppose anything related to cannabis and they oppose cannabis delivery under these grounds, but we have liquor delivery here in Colorado. One of the things, the points, that we've made is liquor delivery has been allowed in Colorado for a very, very long time. There is still not a single permit issued to conduct deliveries.
Jordan: They just opened the doors. They passed almost no rules, almost no regulations and didn't permit the activity at all.
Jordan: They were just like, "Liquor stores can deliver. If you have one of these couple of types of licenses, you can deliver." That was really about it. There was a bill passed last year that regulates a little bit more of this conduct, and they're going to start permitting things for delivery in the liquor industry, but the end of the day, like liquor delivery has been going on for a long time. That hasn't seemed to be an issue. One of the things that I think someone really adeptly pointed out is, like, if you wanted to rob a delivery truck, you should just wait for the day that the new iPhone comes out and like rob a FedEx truck because it's not going to have the same level of like security requirements required by statutes and regulations and all this stuff that we get in cannabis.
Ricardo: Good point.
Jordan: iPhones are like really, really valuable and really expensive these days.
Ricardo: $1,200 a hit, yeah, a small box.
Jordan: Right. Cannabis is pretty small for value. An ounce of cannabis isn't that big. It's maybe a little bit bigger than an iPhone, but like it's worth 150 bucks. It ain't worth 1,200 bucks. If you're trying to rob a delivery truck, go rob the iPhone truck.
Ricardo: Mind you, Jordan is not advocating any highway robberies of any kind. But Jordan, it's also interesting because it's like they're picking and choosing as well. If they're concerned about potential robberies of cannabis delivery drivers, and yet here we are, five plus years into a legal, regulated adult use market in Colorado, where a majority of these businesses still don't have access to traditional banking services. I mean, talk about robbery potential. I mean, our friend Andrew Freedman, years ago was talking to the New York Times in 2014 and he said that was the single biggest concern and the single most dangerous area of modern cannabis is the fact that this is still so much a cash business. This cash has to be transported at some point. I mean, is there a parallel there? Are they picking and choosing?
Jordan: Well, I think that that's some of the point that I'm making, is if it's good for the goose it should be good for the gander too, kind of thing. That's where we run into some of these logical inconsistencies. Yeah, there's cash being driven around the state. There are armored car services. There's ways that we deal with this professionally.
Jordan: Actually, the analogy that I like even better than the cash, is the B2B transfers. All of the pounds of weed need to get from the grow to the manufacturer or the retail store if someone's going to buy it. The customers aren't going into the grow and like clipping flowers off plants, right?
Ricardo: That would be cool.
Jordan: That would be cool. That would be a fun new dispensary concept, but ...
Ricardo: Not super hygienic.
Jordan: Or permissible, but at the end of the day, like one of the things that I think came out of California, which Eaze is also working on this legislation. One of their folks brought up ... They had data that something around 300,000 deliveries last year in California and there was one security incident.
Ricardo: Oh wow.
Jordan: We're talking about a very, very small probability. We don't want anybody to get hurt. We don't want anybody to get robbed. We don't want anybody to get mugged. There's none of that. We know that the Denver Police Department has come out and said Colorado cannabis dispensaries in Denver are lower targets of crime than other dispensaries. We know that this hasn't been a massive security issue in California. When we were recording the first episode of our podcast, The Blunt Rules ... Sneaky plug.
Jordan: We had a friend of ours, Nina Parks from California on with Shaleen Title and Nina was like, "I ran a delivery service in San Fransisco for like three years and I'm like a five foot one woman and like nobody ever messed with me. I was totally fine." I think that we need to use these learned experiences to adopt thoughtful, smart regulations to protect public health and safety. We can do creative things like certain states have required GPS in delivery vehicles to make sure that we know where things are moving and what's going on.
Ricardo: Sure. Easy.
Jordan: There's limits on the amount of cannabis that you can keep in the delivery vehicle, like $3,000, $5,000. That's a way to make sure, kind of to let criminals know—like that sign on the door like, "There's only 25 bucks in the register at 7-11," or whatever.
Ricardo: Tell me this though, because you mentioned access, and I agree. I see that patient access is huge as well as consumer access, whether you're buying on the recreational or medical market, but there's that access and then there's the other access. It almost feels like some of these lawmakers or law enforcement are trying to prevent access because maybe they don't want to make it easier for the general public to get cannabis and that's why they're opposing this. Is that a part of this too?
Jordan: Yeah, absolutely. I first want to note just that difference between consumer and patient. That's a line that I think is a lot blurrier than even you and I are talking about, right?
Jordan: There are a lot of people that shop on the retail side that are medical patients and consuming for medical reasons.
Ricardo: For sure.
Jordan: I think it's important to recognize that when we talk about adult use cannabis and what that means.
Jordan: We are dealing with the scenario where there are folks who don't view increased access as a good thing, that cannabis use is bad, that if we made it easier for people to acquire cannabis then they might use more cannabis, and then that is more bad stuff.
Ricardo: That's a moral judgment that technically doesn't uphold the law, the Constitutional law, is that right?
Jordan: Well, certainly one of the issues that I've said is that law enforcement in the state of Colorado doesn't get to dislike cannabis anymore. It's in the Constitution. They took an oath to uphold the Constitution. It gets a little squishy when they're like, "Well, we just don't like cannabis."
Ricardo: They tried suing the state already. That didn't work.
Jordan: There's been a challenging history as we've worked through what will likely be a generational change in law enforcement to shift perspectives on this issue, but there are concerns about access. There's concerns about youth access. We've had to make some really challenging sacrifices in our bill to kind of move it through the process.
Ricardo: Jordan, thank you for the work that you've done on this. Let it be known, I very much support this legislation and recognize the need for this in Colorado and other states with legal marijuana programs. This is cannabis and delivery. Jordan Wellington, thank you so much for joining us today.
Jordan: Thank you very much for having me. It's been a blast.
Ricardo: Thank you everybody for joining us for this episode of Cannabis & Main. I'm Ricardo Baca. We'll see you next week.