Marijuana delivery has accounted for less than one half of 1 percent of total marijuana sales in Denver since the service began last summer, according to the Department of Excise and Licenses
, and Denver is ready to up the ante by dropping fees and making licensing changes.
Denver business licensing officials blame the disappointing numbers on a lack of dispensaries adopting the service; Excise and Licenses stats show that just nine of the city's 207 dispensaries, or 4 percent, currently offer delivery. That's far fewer than the number of businesses currently permitted to deliver retail marijuana in Denver.
"There’s an imbalance between the number of transporters and the number of stores they’re able to partner with," Abbey Borchers, a policy analyst for the City of Denver, said during a public meeting for marijuana business owners on July 19. "The takeaway is there has not been a great amount of participation of stores in delivery. Without stores to supply the product, transporters have nothing to deliver."
Denver's first marijuana delivery service, Doobba, shut down in June
, citing poor sales and a lack of dispensary partners.
The city's pot delivery system has two parts: transporters that move marijuana from dispensaries to customers, and the dispensaries providing the products. A dispensary must attain a permit from the city and partner with a transporter in order to offer delivery, and until 2024, transporters must qualify under local social equity requirements before they can get a license.
To be eligible, transporter applicants must qualify under one of three of the city's social equity designations: they or a family member were arrested on certain drug charges, their household earns less than 50 percent of the state median income, or they come from a community designated as a low-economic opportunity zone by the Colorado Office of Economic Development and International Trade
In Aurora, the only other city in Colorado with dispensaries to allow recreational pot delivery, nineteen of the 24 local dispensaries offer delivery. However, dispensaries that were open in the town before Aurora City Council approved delivery in 2020 were grandfathered into delivery, and aren't forced to partner with a transporter.
At the meeting, licensing officials suggested that dispensaries have been waiting until 2024 to start their own transport services — and to stymie that delay, Denver wants to make the social equity exclusivity period permanent. According to Excise and Licenses, the department will soon ask Denver City Council to also reduce delivery and transporter fees while making marijuana transporter licenses available only to social equity licensees.
"Stores would not be able to do their own deliveries at any point in Denver. They would have to do it with a transporter," Borchers explained at the meeting.
Delivery exclusivity would "require stores to pursue contracts with social equity transporters in order to deliver marijuana," according to Excise and Licenses. The department is still collecting feedback from the marijuana industry on the proposal, which would go to members of Denver City Council in August or September.
In the meeting, delivery service owners also said that being unable to deliver marijuana to hotels has hampered their earning potential, but those rules are part of state law and can't be superseded by city rules, Borchers noted.
Marijuana Industry Group, one of Colorado's largest commercial marijuana trade groups, declined to comment specifically on Denver's exclusivity proposal.
Executive director Truman Bradley argues that declining marijuana sales and high industry taxes in Colorado have hurt delivery and social equity entrepreneurs, but says he supports the idea of reduced licensing fees.
"Whether it's delivery or brick-and-mortar sales, the twelve months of sales decreases have hurt our industry badly, especially social equity companies," Bradley says in a statement to Westword
. "The Marijuana Industry Group applauds the Mayor's Office and Denver Excise and Licenses' reduction of fees for social equity transporters and stores and their continued commitment to social equity. Fee reductions are an important step, but if social equity small businesses are going to make it, it's critical that politicians stop trying to tax this industry out of existence."
Both the State of Colorado and Denver recently created incubator and technical assistance programs for marijuana entrepreneurs from communities that were harmed by the drug war. The programs launched around the same time that Colorado marijuana prices and sales plummeted
OEDIT's new Cannabis Business Office distributed sixteen five-figure grants to social equity marijuana businesses in July. According to Excise and Licenses, an upcoming marijuana pitch contest hosted by Denver's new incubation program will award a $20,000 grant to one participant.