Cannabis delivery firms seek immediate rule change
Cannabis Delivery Entrepreneurs Express Frustration as State's Two-Driver Rule Remains Unchanged Despite Push for Reform.
Cannabis delivery entrepreneurs have been pushing regulators to change the state's two-driver rule for years, and when the rule was put on the agenda for this month's Cannabis Control Commission meeting, some thought it meant changes were finally coming.
But, once again, no progress was made, and no progress is expected to come for at least a few more months, leaving delivery companies saying they're fed up with regulators.
The two-driver rule requires two people in a car for every cannabis delivery. Commissioners have said they understand the pressure the rule is placing on delivery companies, but entrepreneurs say that's not enough: They want the commission to vote to drop the rule now.
The driver rule was originally put in place by the former commission board, to head off public concerns about safety for businesses and customers, but the companies have long said other safety measures — such as security cameras and product limits — are plenty. There have been no safety issues in more than 200,000 deliveries, according to Cannabis Commissioner Nurys Camargo.
Meanwhile, the two-driver rule is expensive, boosting payroll and insurance costs, making it difficult for businesses to succeed in an already-challenging industry. Regulators set up the delivery-business license as a pathway for equity companies by giving certain applicants an early shot at establishing their businesses, but that has yet to pan out partly because, entrepreneurs say, they're burdened by regulations.
Commissioner Bruce Stebbins told reporters that he knows that delivery has not produced the "lucrative license type that might have been envisioned when it was first set up."
Cannabis regulations under review
The Cannabis Control Commission has the power to remove the rule because it is a regulation and not state law. Yet commissioners contend the rule change needs more review, so they decided to bundle it into the more-comprehensive regulatory review it is undergoing now.
Camargo told reporters after the meeting earlier this month that she supports resolving several issues at once, as she sees this as a pathway to “economic opportunities.”
“If we're going to do it, we got to kind of do all of it,” she said. “'I’m not going to create emotional policy. Right? I want some data, I want some information and not just from our drivers. …The two-delivery driver (rule) is a big situation, but there's more to it and I think that if we can kind of get it all, then we would make a big difference.”
The commission is now amid its regulatory-review process, the time in which it opens its regulations to changes. It has statutory mandates from the Legislature that must be finalized by Nov. 9. This means the regulatory review of two-to-one-driver likely wouldn't come until after that, pushing back the possibility of changes for at least a few more months.
Delivery drivers want action now
Cannabis delivery entrepreneurs say the two-driver mandate should be dropped now, and that the CCC can figure out other issues with regulations later.
“Being able to deliver to ‘no towns,’ being able to deliver to hotels, federally subsidized housing — that stuff can be attacked down the road,” Devin Alexander, co-founder and CEO of cannabis delivery company Rolling Releaf, said about the other issues at stake. “But right now, the main priority is the two-driver rule.”
Gabe Vieira, co-founder and CEO at Zyp Run, added that the two-to-one driver rule is different from the other delivery regulations because it affects the financial stability of the companies. The other rules, he said, are more about expansion.
“You can't have growth until you rectify your expenses and your overhead,” he said. “One is for just stability, and one is for ascension.”
Drivers find possible detour closed
Delivery companies have also filed eight waivers trying to get out of the two-to-one driver rule. They've been unsuccessful because, according to the CCC's enforcement counsel Rebecca Lopez, waivers are meant for individual licenses, rather than overall policy changes.
“It is not a vehicle for effectuating policy change,” she said. Lopez did say, however, that a waiver was granted in the past to make a policy change to allow telehealth visits for medical marijuana patients during the Covid-19 pandemic.
Commissioner Ava Callender Concepcion asked if instead of Covid, businesses could get the waiver considering the undue hardship of financial stress.
Lopez said that this might not work, as Covid may be “distinguishable” and that an extra formal study would be needed by the commission to move forward. Alisa Stack, chief operating officer, stepped in to say that it may end up taking just as long to do the study as it would to do the regulatory review.
Ulysses Youngblood, president at delivery company Major Bloom, failed a waiver, and in the denial it said that he should petition the regulation. But Alexander said a similar petition he pursued took up time and led nowhere.
“We did [a petition] and we got nothing — for a full calendar year,” Alexander said.
For his part, Youngblood added that it took seven months just for his waiver to get rejected in the first place.
Pushed towards the regulatory review by attorneys and without a clear path forward on waivers, Commission Chair Shannon O’Brien said she wants to deploy some official working groups so they are “ready to go" after the Nov. 9 deadline.
As for next steps, commissioners decided they wanted to meet with delivery companies again to discuss the rule change.
“There are a lot of questions that I think all five of us would benefit from being in the same room with the delivery couriers and having this real candid conversation,” Stebbins said.
Delivery entrepreneurs said there's little more to say.
“In our eyes, what is there left to discuss? Why do they need to have this discussion? We've talked about this until we're blue in the face,” Alexander said, noting that delivery companies have had three meetings in the last year. “At what point does it end?”
In the meantime, Vieira said the concern is that more of his friends in the industry will go out of business.
“At the end of the day, we can have these meetings over and over again. But real businesses, real people, real entrepreneurs, and real social equity members are going to lose their businesses overnight before the end of this year,” he said.
