Cannabis store finds a way to deliver where delivery’s not exactly legalAlexa PetersJanuary 16, 2020
Cannabis delivery services are popular, but questions remain about their legality in many adult-use cannabis states.
For example, in California, where specific delivery license frameworks are in place, cannabis delivery is legal and widely used. Eaze, a San Francisco-based cannabis delivery app, reports that consumers order cannabis every ten seconds via their app.
In Washington state, though, cannabis delivery has never been made explicitly legal. There is no state license available to deliver a gram of flower and a vape cartridge. But that hasn’t stopped risk-taking entrepreneurs from serving the public demand.
Washington business tests the limits
Back in 2014, The Stranger, an alt weekly in Seattle, Washington, turned the spotlight on Winterlife, one of a number of semi-clandestine delivery services operating in the murky legal space that opened up after voters approved Initiative 502. By early 2016, Seattle officials estimated there were about 30 illicit cannabis delivery businesses operating in the city. Later that year Seattle Police created a sting operation and arrested a handful of delivery drivers in an effort to curb the practice.
Now delivery has returned to the Evergreen State in a very public way. In late December, billboards appeared along highways in south Puget Sound advertising Pelican, a new cannabis delivery service.
So, is delivery now legal in Washington? Maybe, and maybe not. According to Brian Smith, Communications Director for the Washington State Liquor and Cannabis Board (LCB), state law “doesn’t prohibit [cannabis delivery], but it doesn’t allow it either.”
Last week Leafly tracked down Dave and Tina Comeau, who founded Pelican Delivers in Sept. 2019, and asked how they’re operating so openly—and how they believe it’s legal. The Comeaus own two state-licensed Better Buds dispensary locations in Port Hadlock and Silverdale. They have plans to open a third store soon in Longview, near the Oregon border. They say they decided to open a delivery service because so many of their customers have been asking for it—and because they believe they’ve discovered a way to do it legally.
“We thought about it—we know there is no legal framework for delivery [in Washington], so we looked at the laws and came up with a solution for delivery that works with the current Washington state laws and rules,” Dave Comeau told Leafly.
The revised cannabis delivery statute
Commercial cannabis delivery is not specifically allowed in Washington, but cannabis delivery itself isn’t outright prohibited. In 2017, Gov. Jay Inslee signed SB 5131 into law, which allows friends to share or gift cannabis to one another in select amounts. The pertinent passage in the law reads:
“The delivery by a person twenty-one years of age or older to one or more persons twenty-one years of age or older, during a single twenty-four-hour period, for noncommercial purposes and not conditioned upon or done in connection with the provision or receipt of financial consideration, of any of the following marijuana products, is not a violation of this section, this chapter, or any other provisions of Washington state law.”
One adult may deliver a gift amount of cannabis, for non-commercial purposes, to another adult—as long as it is less than “i) One half-ounce of useable marijuana; (ii) Eight ounces of marijuana-infused product in solid form; (iii) Thirty-six ounces of marijuana-infused product in liquid form; or (iv) Three and one-half grams of marijuana concentrates,” according to the statute.
The law was meant to allow friends to share a joint, essentially—or to help out a buddy with a spare gram or two. In fact, Leafly’s Ben Adlin looked into the question of friend-gifting and friend-delivery last year (see Buyer beware: Is it legal to pick up cannabis for a friend?). Smith told Adlin that picking up a eighth for a friend while you’re making a run to the local cannabis store wasn’t exactly legal.
“As innocuous as this scenario sounds, if it were allowed there’d be no way to prevent unlawful delivery services,” Smith said. “It would also complicate prosecution of unlawful possession with intent to deliver.”
The legal loophole
Would somebody actually be arrested and tried for picking up an eighth for a friend? “I doubt somebody would be prosecuted with the felony,” Smith replied. “That said, it would depend on the jurisdiction as well as the facts and circumstances surrounding the exchange.”
The Comeaus, it appears, have decided to challenge the legal limits of the friend-gifting dynamic.
Dave Comeau told Leafly last week that Pelican Delivers remains compliant with state law because they use contracted, third-party delivery drivers who are paid to use the app, not to deliver cannabis. That, he said, qualifies as a “non-commercial” purpose.
“The customers can only order half the legal limit. There’s a gifting rule where I can actually give you half the legal limit of product without it being a misdemeanor or felony or anything like that,” he said.
'We want to be really compliant. We want to make sure minors aren’t getting product.'Tina Comeau, Pelican Delivers Co-Founder
The Comeaus assert that their app meets all other state compliance requirements. The app maintains the ability to trace every cannabis purchase, verifies the ID of the consumer at the beginning and the end of the transaction, only permits sales below legal purchase amounts, and uses GPS tracking to keep drivers within state lines.
“We want to be really compliant,” said Tina Comeau. “We want to make sure minors aren’t getting product. We want to make sure we’re doing this as legal as we possibly can.”
Pelican Delivers’ app
Here’s how Pelican Delivers works. The customer downloads the Pelican app, signs up with their name and delivery location, and uses the customer-facing portal to scan their ID. Third-party ID verification software then confirms they possess an actual state-licensed ID and are of legal age to purchase cannabis.
From there, the consumer can search for and select products from state-licensed dispensaries in their area, add them to a cart, and enter their bank information for bank-to-bank transfer of funds once they’re ready to purchase—that is, funds from the consumer’s bank to the dispensary’s. They also offer credit card processing.
Once the consumer has checked out, the app searches for a driver in the area, much like when you order an Uber or Lyft. From there, a driver accepts the order, receives the order details, and is routed to the retail location to pick up the order.
When the driver gets to the store, the dispensary scans the products through their POS system to meet state traceability requirements, and the consumer’s state ID is checked yet again. A pick-up button also appears in the driver’s app portal once inside, and once clicked, the driver has officially “purchased” the delivery by releasing the consumer’s funds to the retail location via bank-to-bank transfer.
“The button is ring-fenced and only shows up if the [driver] is in the store,” said Comeau. This is important: The only legal cannabis transactions under Washington state law are those done inside a dispensary.
When the funds are released, the driver also receives the information about where to deliver the order, and the driver heads to the customer’s address. At the customer’s door, the driver scans the customer’s ID yet again, and hands them their cannabis—still sealed in its packaging. The driver then checks the order off as complete in the app, and is paid instantly. (As for tipping drivers, that can also be done through the app at the time of check-out or with cash at the time of delivery.)
“The driver’s keep 100% of their tips and they also get to keep 80% of the [delivery] fee,” said Tina Comeau.
Can you patent it?
The Comeaus believe that the patent on their cannabis delivery software—the first of its kind—also has legitimizing force. And, to some extent, it does—especially when it comes to attracting potential investors. “We do have an issued cannabis delivery patent for the methods and process of how to do cannabis delivery in a highly regulated market,” said Dave Comeau.
Obtaining a patent for an app doesn’t necessarily mean the product is legal, though. Brian Galvin, the Comeaus’ patent agent, made it clear that the patent doesn’t give them immunity from prosecution.
“I’m not an attorney, I’m a patent agent,” said Galvin. “I am not advising them on regulatory issues. When it comes to patents, there’s no requirement that the invention or the use of it be legal.”
Here’s another complicating factor. Because there’s no official license for consumer cannabis delivery, delivery companies like Pelican Delivers don’t fall within the jurisdiction of the Liquor and Cannabis Board. The LCB’s power over cannabis companies comes from its licensing authority. Break a rule, and the LCB can suspend or revoke your license. But where there’s no license, the LCB doesn’t have law enforcement power—the agency can only refer cases to police agencies.
Of course, this all may be moot in a few months. According to Smith, the regulatory agency is working with Gov. Jay Inslee’s office to craft a bill that would allow licensed producers/processors to deliver medical marijuana to medical patients. It’s unclear whether such a bill would be limited to medical patients or cover all retail cannabis transactions.
For now, the Comeaus are continuing to operate and expand. They say the delivery service is quite popular, particularly among parents who’d rather pay the delivery fee than pay for childcare, and they have plans to expand it to other medical and adult-use cannabis states. They’re also developing more software for the app at the moment, including programs that will allow dispensaries to interact with customers via text and email.