No, Amazon Won’t Destroy the Marijuana Delivery Industry

By Jamie Steigerwald, Chief Marketing Officer – Nug Avenue

On June 1st, 2021, online retail giant Amazon not only announced it would cease drug testing its workforce — some 1.3 million employees — for marijuana use, but also signaled its support for the MORE Act.

According to Leafly, the MORE Act would encompass sweeping changes regarding the decriminalization, legalization, taxation, and nationwide access of marijuana in states where it is available for legal purchase to adults aged 21 or older. For instance, it would remove cannabis from the Controlled Substances Act of 1970, establish a federal excise tax on legal cannabis, reinvest a portion of tax revenue into communities disproportionately affected by the failed “war on drugs,” and establish a Small Business Administration (SBA) loan program.

Amazon’s announcement heads in the right direction. The idea that workers who use marijuana cannot also be healthy and productive employees was a prohibition-era myth.

Yet the company’s unexpected shift has also caused many business owners and investors within the legal cannabis delivery industry to worry about Amazon’s potential to consume most of the industry’s market share in the US.

As valid as these concerns may initially be, partially due to Amazon’s track record of putting many companies in other industries out of business, there are a number of reasons why Amazon’s potential involvement in the US’s legal cannabis delivery market — particularly in the industry’s current state — are no cause for concern.

Cannabis is organic and perishable

First and foremost, cannabis is an organic and perishable product. Over the past two decades, the majority of Amazon’s growth and success has been due to its ability to source and sell consumer products and deliver them to customers virtually anywhere in the world. This success has largely been attributed to Amazon’s construction and use of massive warehouses and storage facilities where these consumer goods can be stocked for weeks, months, or even years on end.

However, high-quality cannabis products — particularly high-quality cannabis flowers — cannot maintain their level of quality when stored in these conditions. Customers who have their marijuana delivered to them rightly expect the product to retain its freshness and quality. An Amazon cannabis delivery service is simply not yet equipped to address or handle these two factors.

Cannabis deliveries require prompt delivery

Secondly, there is the issue of timely deliveries. Amazon has not yet attempted to enter the marijuana delivery sector for the same reason it has not entered the food delivery industry. Their delivery service, be it via trucks or drones, is simply (and literally) not up to speed. When any customer orders a perishable product, they expect it to be delivered promptly in order for its freshness and quality to be maintained.

Imagine asking a customer to wait 2-3 hours or more for a pizza delivery. This request simply isn’t practical to ask of any consumer. Why would it be any different regarding cannabis delivery? The answer is as simple as it is unsurprising: it wouldn’t be.

Cannabis deliveries require physical confirmation and hand-off

Another reason why Amazon’s potential interest in the cannabis industry should not be expected to disrupt the cannabis delivery market is a simple matter of legality. Cannabis and cannabis-derived products containing amounts of THC are still considered as “controlled substances” by the federal US government, while Amazon is accustomed to operating across state lines.

In states where marijuana is legal, the cannabis delivery market is only allowed to operate according to strict “Track and Trace” or “seed to sale” rules. As a result, delivery drivers must not only confirm that the recipient is the same customer who placed the order, but also hand the package to them personally.

Unlike most of Amazon’s products, cannabis cannot simply be dropped off on a porch or doorstep to await pickup. Similar to ordering a pizza or any other food or perishable product for delivery, customers don’t just want to be physically present when their cannabis delivery arrives — they need to be. This is true not only for the sake of quality assurance, but also for the sake of legality in the case of cannabis.

Concluding Remarks

Overall, the cannabis industry in the US (and the nation’s cannabis delivery market) would be subject to extreme and rampant change if Amazon tried to enter the fray. However, given the issues mentioned above, cannabis delivery as it stands today simply presents too many barriers to entry, even for a company with substantial operational systems already in place like Amazon. That isn’t to say that Amazon will never enter (or attempt to enter) the cannabis delivery market. But for now, it simply makes no sense for the retail giant to move towards such a substantial endeavor.

Jamie Steigerwald is Chief Marketing Officer of Nug Avenue, the Los Angeles marijuana delivery service that specializes in hand-selected flowers.

Order online within the service area, and the package will reach your front door the very same day.