Why Capping Delivery Hurts Sacramento Consumers & Business

In a letter to members of the Sacramento City Council this month, the CCCA opposed a proposed cap on the number of cannabis delivery businesses that will be allowed in District 6.

Please join us on August 28th at 3:00 PM at City Hall to speak out against this cap! If you can’t make it in person, please write to the members of the City Council requesting their “no” vote on this item and that they bring delivery companies to the table before deciding on a cap.

The Letter:

I am writing today on behalf of the California Cannabis Courier Association (CCCA) in strong opposition of an effort to place a moratorium on cannabis delivery businesses in District 6. The CCCA is an organization of licensed cannabis delivery businesses that advocate for well-structured policies and regulations that increase access, improve public safety, and limit the illicit market. We recognize that the City of Sacramento places a high value on creating opportunities for businesses that offer low barriers to entry for underrepresented populations, and it is our hope that these comments will serve as a supplement for a more robust discussion on developing a policy that will both allow small businesses to thrive while protecting public safety.

It is currently estimated that home-delivery encompasses more than 50 percent of the market-share of cannabis sales in California, and while there are a handful of very large operators in dense urban areas like Los Angeles and San Francisco, these businesses in Sacramento are often small and serve a loyal patient base. Delivery thrives on community, and delivery companies are operated by individuals from a variety of social, cultural, and socioeconomic backgrounds while serving some of the most vulnerable populations, including cancer patients and individuals with disabilities who are physically unable to travel to a storefront dispensary.

We believe that delivery is vital for patient access. Business owners fear that excessive taxation and fees, an inability to collect tax deductions, compounded with an ever-increasing real estate market, will lead to the closure of most small delivery companies and encourage a handful of larger operators to control the market. This has been the experience of other industries, and we feel there is an opportunity to learn from lessons of the past and ensure that we allow small, locally-owned deliveries a chance to participate and succeed. For the following reasons, we encourage the City Council to consider waiting and conduct a study on the impacts of delivery before rushing to implement harsh restrictions. We would also recommend conducting a more robust stakeholder process that includes the voices of those who will be impacted by this policy.

Equity

The conversation around promoting equity and encouraging a market that allows those who have been impacted by a many-decades-long war on drugs is an important one happening statewide and here in Sacramento. Indeed, the city is in the process of creating its own CORE program to address this very topic. While we are focusing on such important issues, we should also be careful not to miss the “low hanging fruit” opportunities to uplift people in this industry.  One such opportunity is to allow cannabis delivery businesses – which traditionally have lower barriers to entry – to exist and thrive.

Timing

While having a conversation about over-concentration of any type of business is a valid one, we feel this is happening entirely too soon without gaining a full grasp of what the issues are and what’s needed. The state just began licensing in January, and the finalized state regulations will not even be implemented until closer to the end of the year – by restricting delivery businesses now, it will penalize those who have waited to understand and comply with the full scope of state and local laws.

Additionally, the proponents of a cap on delivery cite concerns over the potential impacts of the proliferation of delivery vehicles on roadways without providing factual data to support their claims. We would suggest waiting for finalized regulations as well as an in-depth understanding of the actual impact of delivery vehicles before creating policy decisions that will reduce the number of people who can participate in the market.

Route Efficiency

In addition to being more environmentally-friendly, producing efficient delivery routes and using economical vehicles are savvy business decisions for cannabis delivery businesses. Most use technology that maps out the least congested path, during the least impacted time of day, with the most amount of orders possible per trip. This runs counter to the claim that delivery vehicles may significantly increase traffic congestion – it is not a sound decision from any perspective to spend staff time and gas waiting in traffic.

Additionally, because drivers are delivering products to the safety of a legal consumer’s own home, it is reducing the traffic that would be produced by multiple individuals driving to and from storefront dispensaries, which may be many miles away. As an example, the average delivery driver can process 30-40 orders in an 8-hour shift – this potentially eliminates the need for up to 40 vehicles on the road obtaining product from a storefront dispensary. The CCCA would be more than willing to participate as a stakeholder and partner in an alternative process that produces reasonable regulations around traffic, rather than an arbitrary outright cap on delivery.

Rental Market/Zoning

The very reason why District 6 is so appealing to cannabis businesses is a direct result of the planning and zoning decisions made by the City of Sacramento. Long-term planning decisions have led to a concentration of commercial, manufacturing, and industrial-zoned properties in District 6, while recent decisions over where cannabis businesses can locate have relegated them to specific areas. This is compounded by an extreme rise in rental prices for “green-zoned” properties (up to 4 or 5 times the price of other commercial locations), leaving many businesses with limited options. For reasons outside of their control, delivery businesses are being penalized, potentially leading to a consolidation of the market into the hands of just a few. We would recommend promoting full market participation and allowing supply and demand to be the limiting factor rather than an arbitrary cap.

Benefits of Delivery

Rather than perceiving delivery businesses as having a negative impact on the community, we would implore you to understand the benefits of delivery over other types of cannabis retail. These include:

  • Added security, including cameras and on-site guards
  • No public access or loitering
  • No smell pollution
  • No advertising outside
  • Traffic reduction by delivering to consumers directly
  • Job creation

This model results in discrete transactions which produce tax revenues for the city and create a significant number jobs (as the law requires that drivers must be employees of the business rather than contractors). All of this would stand to the benefit of District 6 and the people of Sacramento.

For these reasons, the CCCA strongly opposes a moratorium on cannabis delivery businesses in District 6 and would request that the City Council:

1) convene a more thorough stakeholder process which includes delivery businesses that will be impacted
2) study and understand the business model and actual impact of driver routes
3) wait for the full state regulations before making such policy decisions.

By | 2018-08-25T18:25:20+00:00 August 25th, 2018|Uncategorized|0 Comments

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