What is a Cannabis Delivery Business?

Starting a cannabis delivery business is a great alternative to the traditional option of opening a storefront dispensary if you have limited capital but still want to get into a retail cannabis business. This cannabis business also affords you a much greater opportunity to provide 1-on-1 service to your customers with more flexible geographical coverage and wider scope for expansion. There are various cannabis delivery business models, including a non-storefront retailer, a cannabis courier, a cannabis delivery app, a storefront retailer with a delivery service, and more. Check out the following links to see which cannabis delivery option is available in your state:

Cannabis Delivery Business by State

Cannabis Courier Business by State

Cannabis Non-Storefront Business by State

Depending on the type you choose, this could be in the retail or service sector. Profit margins in cannabis retail are more modest than in other types of cannabis businesses, in part because retailers’ median direct costs are also the highest in the industry. While the services sector has the highest profit margins, it is the most modest in terms of income.

Cannabis Delivery Business Setup Costs

The cost of starting a cannabis delivery business ranges from $25,000 to $2 million (if we’re talking about a dispensary with an additional delivery service). Our example is a non-storefront cannabis retail business with a delivery service:

• $25,000 legal fees & insurances
• $15,000 building renting (includes security deposit)
• $5,000 website design and development, hosting
• $15,000 marketing campaign
• $25,000 space improvements including finishing/painting, storage hardware and shelving.
• $15,000 equipment, including climate control system
• $10,000 security system including multiple camera feeds
• $30,000 car fleet
• $3,000 computer software
• plus salaries for drivers and managers
• plus deals with producers and distributors

= approximately $200,000 start-up expenses

The Economics of Cannabis Delivery

Across all states, dispensaries earn between $2.1 million and $3 million in gross revenue. With an average income of $2.5 million per year with a net profit of at least 10%, dispensary owners can make a profit of $250,000.

Sample of a revenue model for a cannabis delivery business (3rd year):
Revenue = $2,500,000 (100%)
-Direct Costs = $1,763,802 (71%)
Gross Profit = $736,198 (29%)
– Operating Expenses = $213,525 (8%)
Operating Income = $522,673 (21%)
– Depreciation, Interests and Income Tax = $232,057 (9%)
Net Income = $290,616 (12%)

Cannabis Delivery Financial Model Sample (Illinois)

Calculate your delivery service business costs and profits with our pre-populated cannabis delivery financial models. All you have to do to get started is enter your monthly sales target and warehouse size. The model will help you estimate how much it costs to start and operate your own cannabis delivery business, build all revenue and cost line-items monthly over a flexible seven year period, and then total the monthly results into quarters and years for an easy view into the various time periods.

Cannabis Delivery Business FAQs

Should you have any questions, please do not hesitate to contact us. 

Hemp CBD Products Delivery Business Plan Templates are available at hempcbdbusinessplans.com.