How to Start a Cannabis Delivery Service in Massachusetts

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Now is a great time to start a cannabis delivery service in Massachusetts. As it so happens, the permit limit was not reached during the last application window. This means that there are still spots open and the next one could belong to you! Of course, this means that you should apply sooner rather than later, because applications are considered on a first come first served basis.

With more and more cannabis businesses opening up in Massachusetts, expected profits are currently going through the roof. Experts are speculating that within five years the cannabis industry in Massachusetts could be a billion dollar industry.

Legalization in Massachusetts

The compassionate aka medical cannabis program in Massachusetts was voted in via ballot initiative Question 3 successfully in November of 2012. Massachusetts was the 18th state in the US to legalize medical cannabis.

During a certain amount of time there was a limit of 35 sites (dispensaries or cultivation centers) allowed, at the time only 15 licenses for these businesses were awarded.

Massachusetts then went on to legalize recreational cannabis during the 2016 election, along with seven other states. Amazingly, Massachusetts became the first state on the east coast to do so. Prior to this, the application window for Registered Marijuana Dispensaries (RMDs) was last open in June 2015. RMDs are nonprofit organizations that need a Certificate of Registration to operate.

As of today, the application window is open once more, and does not look to close again anytime soon. Applications are reviewed on a first come first serve basis, so it’s best to get your application in as soon as possible. Since the application window remains open for the foreseeable future, and there is no limit on the number of dispensaries that are allowed to operate, any applicant has a chance of being accepted. This is as long as they follow the regulations and Chapter 369.

How Many Retail Businesses Allowed in Maine?

As of right now there are 12 medical cannabis businesses operating in Massachusetts. There is currently no limit on the number allowed. So far there have been nearly 100 applicants, but they are only in the eary stages – and have not yet been approved to receive a license. It is estimated that there are over 5,000 medical cannabis patients through out the state.

Keep in mind that recreational licenses are different. There is a limit of 75 total businesses until October 2018. No licenses have been issued so far. The number of businesses allowed to operate in a certain area are left up to individual municipalities. As always, priority will be given to medical cannabis businesses.  After that, the rest will be decided via lottery.

What is the Delivery Market Worth?

Massachusetts’ cannabis market is doing remarkably well. In 2016, medical sales topped out at 100 million dollars. By 2021 this number is expected to be around 238.4 million dollars. Recreational sales are expected to bring in even more revenue, with estimates sitting at around 929.3 million dollars by 2021.

How much money is there in the delivery market

How much money is there in the delivery market – Image powered by Marketwatch.com

Business Opportunities in Massachusetts

Currently, Medical Marijuana Treatment Centers, or Registered Marijuana Dispensaries (RMDs), already operate in Massachusetts. RMDs are nonprofit and are allowed to dispense, grow, and obtain cannabis and products related to cannabis. Recreational businesses have been allowed since the voter initiative passed in 2016.

Retail cannabis stores (including delivery services), cannabis product manufacturers, cannabis cultivators, and testing facilities all have provisions as of December of 2016

The official application process has not been established by the state. Recreational businesses may begin the application process in April of this year. The first licenses will be issued in June of this year.

Businesses will be able to open this July. Until then, businesses with the highest level of experience operating medical cannabis treatment centers will be given priority over licenses. After that, licenses will be given out via a lottery.

License Requirements

Along with dispensaries, cannabis delivery businesses fall under the retail category. Other licenses available include: Testing Facility, Manufacturer, and Cultivator.

Cannabis license requirements are designed to be similar to the requirements of obtaining a liquor license. If an applicant has had prior cannabis convictions, they will not necessarily be disqualified.

There is a chance that the Cannabis Control Commission will decide to cap the number of cannabis cultivation businesses in the state. Thus far, there is a limit of 75 until October of 2019. There is also a limit of 75 cannabis product manufacturers until October of 2018.

Once an applicant submits their application (to the Cannabis Control Commission), a copy of it is forwarded to the specific municipality that the applicant wishes to establish their business. A rejection or an approval notification could take up to 90 days to receive after the initial application is received.

Financial Requirements

Cannabis business licenses in Massachusetts are as follows:

Adult Use:

  • Initial Application fee: up to $3,000
  • License for retail cannabis store: $15,000
  • License for a cannabis cultivator: up to $15,000
  • License for a cannabis testing facility: up to $10,000

Medical:

  • Dispensary Stage 1 Application Fee: $1,500
  • Dispensary Stage 2 Application Fee: $30,000
  • Architectural review: $8.25 per $1,000 of construction costs, with a minimum fee of $1,500

What is My Expected Profit?

Cannabis delivery service profits can vary, but they generally bring anywhere from 50 thousand a year up to millions – at times even more.

Timeframe

It is best for you to allow yourself a year to get finances in order, acquire necessary licenses, source suppliers and hire employees.

Consulting Companies

These consulting companies can help you get started with your cannabis business. They provide a variety of services, from helping potential owners navigate state licensing requirements to running and stocking your business.

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3 Comments

  1. James M Kashmanian on

    Are there any major players for transportation services in Ma yet ? I would like to inquire about potentially running a fleet for a major delivery service located in Massachusetts, thanks

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