Entities licensed to deliver cannabis differentiate with “black market” and “traditional market” competition by providing superior customer service and lab tested products, explained Phil Smith, owner of Freshly Baked in Taunton, Mass. and Jerry Millen, owner of Greenhouse in Walled Lake, Mich. during a February 17 Grown In webinar.
“Delivery is a cost center,” said Millen, whose service makes about 20 deliveries per day for his Greenhouse dispensary and medical provisioning center, charges a $5 service fee for each trip, and saves gas money by using Lexus certified pre-owned hybrid electric vehicles. “If the competition is going to do it and I don’t, then I will lose customers. I operate delivery at a loss.”
Smith said that delivery constitutes five to 10 percent of the business generated by his vertically-integrated company which makes the bulk of its money through manufacturing and wholesale.
As to competition from unlicensed cannabis delivery services, Millen said that despite the ubiquity of options in Michigan that “the people that order in the black market over here are not the type of people that go to the store.”
In Massachusetts, Smith noted that. “there are a lot of barriers on the regulation side,” that licensed operators must adhere to. “There is too much we have to do to manage compliance.”
While both panelists said they were approached for partnership by national delivery companies including Eaze, Lantern, and Leafly, both declined citing unpredictability and bad manners on the part of those suitors.
“In Michigan we kind of take offense when strangers come in and try to monopolize the industry,” said Millen, who pointed out that if one of their driver’s got in trouble it would put his hard-earned license at risk.
“All of these companies cost me money at the end of the day,” said Smith. “And they do have an arrogance to them.”
