Jul 29, 2022 - News

Denver could make weed delivery exclusive to social equity companies

Illustration of three hands holding marijuana leaves, one hand belongs to a Black person.
Illustration: Aïda Amer/Axios

Cannabis delivery in Denver has yet to take off, and the weak demand is threatening to put marginalized entrepreneurs in the city out of business.

Why it matters: In a multibillion-dollar industry dominated by white men, industry leaders say pot delivery licenses can serve as a path for business owners from diverse backgrounds to break into the hyper-competitive space.

Driving the news: City officials are looking to address the issue by providing exclusive access to marijuana delivery licenses to "social equity applicants," or business owners considered disproportionately harmed by the war on drugs.

  • The proposal, pushed by the Department of Excise and Licenses, would also slash licensing fees for social equity delivery companies and the retailers they partner with.
  • Of note: The move comes as Denver leaders are rolling out a 10-week social equity and technical assistance training program for aspiring entrepreneurs in the cannabis industry.

State of play: Since the city launched its weed delivery program last year — which requires dispensaries to deliver through social equity transporters through July 2024 — nine of Denver's 206 pot shops offer the service, Excise and Licenses spokesperson Eric Escudero tells us.

  • With few businesses to deliver for, the licensed social equity transporters are faced with "severe challenges" to avoid going out of business.
  • At least one delivery company, Mile High Cargo, isn't renewing its license this year because of this dearth of partners, Escudero says.

Between the lines: Industry experts tell Axios Denver that the Mile High City might be so oversaturated with dispensaries that delivery will struggle to catch on.

  • The reality is that many people would rather pick up their pot than pay extra for delivery.
  • Additionally, many cannabis companies have been reluctant to pursue partnerships due to "costly" permitting fees, and many have chosen to wait out the exclusivity period.

Yes, but: Industry insiders overwhelmingly agree that the proposed policy is "creative," and significantly better than the status quo.

  • "Everyone should have a chance to find opportunity in Colorado's cannabis industry. The barriers to entry can be really, really high — especially for social equity entrepreneurs," Marijuana Industry Group executive director Truman Bradley tells Axios Denver.

What to watch: Axios Denver has learned that Native Roots' medical and retail dispensary on Grant Street was approved for a delivery permit on Thursday.

  • The development marks the largest-volume marijuana store to receive a delivery permit and become eligible for a social equity delivery partnership.

What's next: Excise and Licenses' proposal will be presented to a Denver City Council committee in the coming weeks, and must be approved by the full council, Escudero said.

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