The Cannabis Control Commission filled in the blanks Thursday of its long-discussed marijuana home delivery rules, agreeing upon a framework that creates two types of delivery licenses and settling on a timeline that would have new cannabis industry rules in place in about a month.
The CCC adopted draft delivery regulations Thursday that would create two distinct delivery license types: a “limited delivery license” that would allow an operator to charge a fee to make deliveries from CCC-licensed retailers and dispensaries, and a “wholesale delivery license” that would let an operator buy marijuana wholesale from cultivators and manufacturers and store it in a warehouse. The licensees would augment retail stories and serve as a new means for people to acquire recreational marijuana.
“What we’ve done in addition to creating those two license types is also to establish new fees and fee structures, to require warehousing for wholesale delivery licensees, to authorize white labeling for wholesale delivery licensees, we’re defining specific operational requirements that will be in addition to the general operational requirements, and we are amending existing relevant regulations to incorporate the license types and the activities that they can undertake,” Commissioner Britte McBride, who led the regulation writing process, said.
McBride said the limited delivery license “isn’t much of a change at all from the delivery-only license that had been included in our regulations.” When it started this latest round of regulatory revisions earlier this year, the proposed rules would have limited delivery operators to a courier role, sourcing marijuana and marijuana products from CCC-licensed retailers and making same-day deliveries. Several prospective cannabis delivery operators told commissioners during a public hearing that the framework for delivery would not work as initially written.
Last month, commissioners voted to allow delivery companies to source the marijuana and products they offer for delivery from CCC-licensed cultivators and product manufacturers on a wholesale basis, a change that one regulator said is key to equity in the newly-legal industry. That policy decision manifested itself Thursday in the form of the new wholesale delivery license type.
Operators that hold a wholesale delivery license would be required to maintain a secure warehouse that meets all of the CCC’s existing requirements for security and storage of marijuana. The warehouse must also have a loading dock or sally port where delivery vehicles can be securely loaded.
Wholesale delivery licensees would also be allowed to white-label products or have their suppliers white label the products for them. White labeling is when a product is rebranded and in this case would likely mean the delivery service would put its own logo, label and more on the marijuana it delivers rather than leaving the marijuana branded with the logo of the company that grew or processed it. Vaporizer devices could not be white-labeled, the CCC decided, and all white-labeled products would still be required to be included in the CCC’s product database.
The draft delivery regulations establish a $1,500 application fee for both delivery license types, along with a $5,000 annual license fee for limited delivery licensees and a $10,000 annual license fee for wholesale delivery licensees. The CCC agreed to waive the application fee and first-year license fee for limited delivery licensees and to reduce the fees by half in the second year.
“The reason that we’re doing that is because we really, through this license, the entire purpose of the limited delivery license was to try to create a pathway that included lower barriers to entry and by providing for this waiver, we really want to foster those lower barriers and create opportunities as a priority with this license,” McBride said.
Delivery licenses are available exclusively to participants in the CCC’s Social Equity Program and certified economic empowerment applicants for the first three years.
Home delivery of marijuana has long been allowed under the state’s medical marijuana program, and advocates pushed for a delivery-only license in the recreational market arguing that it will help level the playing field between large corporations and small businesses because the barriers to entry for delivery are typically far less burdensome than those for retail licenses.
The CCC will soon open a public comment period on the draft delivery regulations adopted Thursday. Chairman Steven Hoffman said he expects the commission to consider feedback and vote to finalize the delivery regulations on Oct. 20.
“When we first did our draft regulations back in July there were some changes to our delivery regulations and during the public comment period we did receive significant comment on delivery. The changes that we’re voting on today though are substantive enough that we feel it is imperative to solicit and consider additional public comment on these specific changes,” Hoffman said.
On Oct. 29, the CCC is expected to vote on its larger suite of rewritten regulations.