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What percentage of marijuana transactions are done through delivery vs in person? What is the total size of the marijuana delivery market in the US today? What companies are the main drivers behind the marijuana delivery market?
Hello! It is my pleasure to answer your question about marijuana delivery services and the size of that market.
As of this writing (January 2016), 23 states and the District of Columbia (Washington DC) have laws legalizing marijuana in some form: Alaska, California, Colorado, Connecticut, District of Columbia, Florida, Illinois, Indiana, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, New Hampshire, North Carolina, Oregon, Pennsylvania, Washington, and Wisconsin. Four states and Washington DC have legalized it for recreational use (as well as medical): Colorado, Washington, Alaska, Oregon, and the District of Columbia. Additionally, a number of states (around 14) have also decriminalized the possession of small amounts of marijuana, or passed laws allowing for the limited use of medical cannabis for specific conditions (like seizures).
At this time, at least 10 more states are already considering legalizing recreational marijuana and two more states are considering legalizing medical marijuana. ArcView reports that California leads the way with the largest legal cannabis market in the US, and in 2014, Arizona had the fastest-growing market. More than 1.5 million shoppers purchased legal marijuana (either medical or recreational) in 2014. The District of Columbia’s legal market is in its first year, but no real data has been collected as congressional Republicans are fighting to block the new law, and not much in this market has developed in that area of the country.
According to MJ Biz Daily, marijuana sales are expected to reach $3.1 – 3.6 billion in 2016, $3.6 – 3.9 billion in 2017, and $4.5 – 6.0 billion by 2018. These numbers take into account only those states that have already legalized it (in some form), and those that will possibly do so this year or next. They also estimate that “if cannabis is eventually legalized across the US, marijuana sales could easily hit $46 billion annually”. According to the Huffington Post, “legal marijuana is the fastest-growing industry in the United States and if the trend toward legalization spreads to all 50 states, marijuana could become larger than the organic food industry”.
Marijuana delivery services are new to the scene (within the last two years, basically), but seem to be taking off quickly in this rapidly-expanding market. For example, a search of “marijuana delivery services in US” on Google produced 11.5 million results! Since the market is so new, there are no specific numbers available for the current market share. So, we will have to calculate an estimate of how much of the MJ market share delivery services may hold. We can do this by taking the number of estimated amount of sales for 2016 ($3.1 – 3.6 billion) and dividing it by the estimated 1 – 25% costs that delivery services are charging. This will give us a rough figure of the value of this market (though this figure may vary significantly based on changes in laws during 2016).
• 1% of $3.1 billion = $31 million
• 5% of $3.1 billion = $150 million
• 10% of $3.1 billion = $300 million
• 15% of $3.1 billion = $450 million
• 20% of $3.1 billion = $600 million
• 25% of of $3.1 billion = $750 million
To sum up, at its absolute best, the MJ delivery service market could be worth between $31 million and $750 million dollars in 2016. According to Fortune Magazine, the “on-demand everything” attitude that we’ve developed from the inception of same-day delivery services and apps like Uber, will inspire this market to ever-greater heights in the coming years. So it seems that the potential for growth in this market is (and will continue to be) astronomical.
Since this is such a new market, and there are no guidelines in place regarding tracking the number of MJ sales made in person or via delivery, this information was not available in any form, nor could it be calculated from available data. Give it another year – and by then there will be a significant amount of data available on not only the growth of this industry, but also the percentages you hope to see.
The last part of your query (concerning the leaders in this market) is the easiest to answer. According to Pot Locator, MJ delivery services are currently available in the following states: Alabama, Arizona, California, Colorado, Connecticut, District of Columbia, Main, Massachusetts, Michigan, Montana, Nevada, New Jersey, New Mexico, New York, Ohio, Oregon, Rhode Island, and Washington.
Although there are many new start-ups in each of the states where some form of marijuana is legal, there are only a few leaders in this new (and starting-to-boom) industry:
CALIFORNIA
• Eaze: Modeled after Uber (and often called the “Uber for Weed”), Keith McCarty founded this delivery service based in San Francisco. If this proves to be successful, the founder plans to expand into the rest of California, and then into Colorado and Washington.
• Meadow: Former food blogger-turned-entrepreneur David Hua founded this app-based service in California for MJ delivery. You can order through your smartphone after using their HIPAA-compliant registration service, and delivery is promised in under an hour. Meadow collects a $3 delivery fee from their own dispensary (where the MJ is provided for the customer).
• MediDrops: Medical MJ delivery app based in Davis and Sacramento.
• Grassp: Founded by David Johnson, this app also tracks the expiration date of your doctor recommendation / certification, and will connect you with a doctor to make sure you stay current.
• Speed Weed: This Los Angeles-based service is a bit different from the others, as it offers statewide overnight delivery in California (whereas the others are typically limited to a specific area).
WASHINGTON
• Canary: This app has also (along with Eaze) been called the “Uber for Weed” and is based in the Seattle area. Founder Megh Vakharia says they want to expand into the rest of Washington, but current state law prohibits it. Currently there is a 10-25% surcharge for each delivery, but the company is exploring other payment avenues (like flat fees or charging dispensaries with large customer bases through the app).
COLORADO
• CannaRabbit: This fully-licenses marijuana courier also offers testing of samples and MJ disposal services.
Thank you again for your question, and I hope this information gives you what you need. Please Ask Wonder again for any other questions you may have!