Can A Pot App Deliver What the Community Wants?

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By Stewart Tongue

Since February 13, when TechCrunch and others reported MassRoots was allowed back into the iTunes app store after a forced, though brief, hiatus, the tide of cannabis-focused apps has been rising. No area of interest is attracting more attention than the idea of a delivery app available via iTunes and the Google Play store. However, while many have already been uploaded, the cannabis community is still wondering whether a weed app can deliver exactly what everybody wants—and what the industry actually needs.

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“I can’t even begin to count the number of stoners who have contacted us, asking how much it would cost to help them become the ‘Uber of weed,’” said Justin Rose of marijuana app developer GrowThisFast.com. “When I try to explain to them that it isn’t a simple proposition and Uber isn’t what they really should try to be, or that it would cost millions to make the attempt a reality, they act like they’ll just call someone else to build the app for them instead.

“The really sad part,” he continued, “is that I am sure someone less scrupulous than me will take their two or three grand and help them flush it down the toilet, chasing the wrong kind of business model with a very shortsighted approach and an app that is all sizzle and no substance. A weed-delivery app done right could be worth billions, but there are a lot of complications that people fail to consider.”

Some of the challenges include:

Inventory
While it’s easy to sit on the couch and imagine an app that shows a shop’s phone number with a simple contact form that asks customers to call and place orders, that really isn’t what consumers want. “A real app would have to go much deeper than that to be useful,” said Lauren MacEwen of WeedStoreReviews.com. “To be useful, the app would need to be tied in to the inventory system of the stores it services. We get calls all the time from customers who are furious that they drove twenty minutes to a store only to find out the strains advertised on the store site are out of stock. Delivery apps need to account for that by connecting to some kind of inventory API and use real time updates to keep listings up to date from moment to moment.”

Data collection
Currently, even by-the-book, brick-and-mortar operations are on the knife’s edge of what is considered legal. Any delivery service puts itself in the middle of their supply chain and, as a result, accepts a number of important risks that cannot be ignored. These include obvious concerns about knowingly or unwittingly being part of a transaction that delivers marijuana illegally to a caller, transacting with someone who is using a fake ID, failing to have the proper prescription paperwork, and a whole host of other potential obstacles. But just as problematic is that many methods used to overcome the challenges create additional risks. For example, a driver who takes a photo of a customer’s ID and medical documents without properly accounting for the security of the data could open a delivery service to a number of HIPPA violations, privacy lawsuits, and class actions or criminal charges—all stemming from improper data management—even if the sale itself is deemed legal.

An app that truly delivers would need to be one that properly secures data collected from stores and customers using methods that are legally permissible. Docusign agreements at the point of delivery, legally binding service agreements, HIPPA-compliant cloud storage, and data-encryption best practices are just a few aspects that need to be considered.

Logistics
The notion cannabis apps could be crowd-sourced in a way similar to Uber’s solution for ride-sharing is implausible. Uber faces multimillion-dollar lawsuits in many jurisdictions for providing legally licensed drivers and cars inspected by the government for the simple purpose of giving someone a lift from point A to point B. Billions of dollars in venture capital is the only reason Uber has not been brought down by the weight of legal challenges.

A cannabis delivery service would need to employ drivers rather than hire independent contractors, would be required to provide adequate training and orientation, would need to be compliant with a myriad of municipalities that can put their own spin on what is or is not permissible, and would need to continually keep up with any changes in laws, store policies, and more. In effect, a useful delivery service would need to be much more like Amazon or UPS than like Uber, employing precise package tracking, highly qualified delivery personnel, a team of back-office staff managing servers, and a robust communications infrastructure to keep everything operating smoothly.

Point of sale
Presently, there are no ways to legally process credit card payments for marijuana. Many store owners have expressed trepidation about alternative payment methods like Bitcoin, but having a delivery driver handle large sums of cash also invokes new levels of financial security and personal safety concerns. From a business perspective, the risks drivers face are serious for the delivery app owner, as well. Eventually, apps will be able to process credit card transactions and manage sales in a secure manner, but until that happens, whether a delivery service is working in conjunction with a set of stores or selling product from its own stock, vulnerabilities at the point of sale, tracking for tax purposes, and splitting revenue between delivery services, drivers, and suppliers all represent additional headaches current apps cannot automate.

Legal issues
Three years ago, Los Angeles was home to nearly 1,000 brick-and-mortar marijuana collectives, and almost none of them engaged in any kind of delivery scheme. When voters passed Proposition D in May 2013, delivery was banned and only 135 of the dispensaries were deemed legal. Those local changes spawned hundreds of illegal delivery services operated by independent drivers who misused their own prescriptions while claiming to operate without any serious risks by never having more than an ounce of cannabis in the car. That kind of low-level operation is undoubtedly illegal, and the idea of shining a spotlight on the scheme by promoting it via a commercial app is definitely something drivers should avoid. Promoting a delivery service on a grand scale is begging for added scrutiny from media and law enforcement, so unless every aspect of legal minutia is managed properly, a shiny new app becomes nothing more than a dangerous target on the developer’s back.

Right now, legal marijuana delivery exists in scattered localities throughout California. Many hope legal delivery will become more widespread. Lynne Lyman, California state director for the Drug Policy Alliance (DPA), recently told BuzzFeed, “We understand the importance of delivery for many patients… This is one of many regulatory issues that the DPA is still considering.” That doesn’t mean the nuances of legal delivery are any closer to being solved for app owners, however.

In Washington State, weed delivery remains legally dubious. UCLA professor of public policy Mark A.R. Kleiman served as a top adviser to the state when regulations for recreational cannabis were being designed and adopted. He has said he believes delivery services make more sense than brick-and-mortar dispensaries as a legal distribution method, but he was unable to convince the Washington State Liquor Control Board to approve such services. While there are some delivery services operating in Washington, it remains unclear whether they are entirely legal and how they handle all of the legalities mentioned previously in this article.

Some weed apps like ItsTimeForDave were announced with advertising fanfare and local marketing campaigns but quickly fizzled after only a month or two. New jurisdictions like Oregon and Alaska provide even less clarity about the legality of delivery services, reinforcing concerns that launching an app before solving the underlying equations has become the fastest way to put developers and marketers on uncertain legal terrain.

It is inevitable a delivery app that achieves the full potential of at-home ordering via any mobile device will be worth a fortune, but in the current climate, app stores are littered with early entrants that earn one-star reviews, have barely a handful of installs, or fail to provide most of the functionality the eventual market leader will offer when the digital dust settles.

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