How to open a cannabis dispensary in New York. Right now New York is allowing cannabis retail license holders to operate cannabis warehouses and delivery operations while their stores are in the process of being built. Brytany Melville, president of Cure8 sister company Forte SOPs and a cannabis retail expert, who just returned from the Revelry cannabis conference in New York, tells us the basics of how retail license holders can start up their warehousing and delivery operations, including key restrictions, security requirements, and SOPs.
Eric – Hey, everybody. Welcome. Thanks for joining us today. I’m Eric Schlissel, CEO of CURE8. Joining me today again is Brytany Melville, the President of Forte Operations. Hi Brytany.
Brittany – Hi Eric, How’s it going?
Eric – It’s great. It’s so great. Welcome back from New York. How are things out there? What’s going on? It sounds like limbo.It sounds a little crazy.What’s happening?
Brytany – Yeah, definitely. So some of the stores are in limbo waiting, waiting for state funding. But what is exciting news is at the end of last year, the state permitted what’s called a temporary delivery. So some of the stores with licenses are able to open up for 12 months and operate out of a warehouse, like an offsite warehouse, and have delivery rights to customers.
Eric – I see. So while people are waiting for their full license, they can actually set up delivery. Now. Well, that’s pretty great. How does that differ from delivery from a brick and mortar retail location?
Brytany – Great question. A lot of similarities, to be honest. Obviously, the state wants to maintain strict regulations and guidelines for these licensees. So a couple of those requirements, they can be open for 12 months. The location has to be close to where their original preference and their region is that they indicated on their application. Also, they do need to be 500 feet away from school grounds and can’t be on the same street as a place of house of worship,
Another important factor is obviously because it is a temporary warehouse. It’s not a shoppable location. So customers can’t go into the store, the warehouse to shop. The stores can’t have any marketing or brand identity at all on the building of the exterior. So it’s not really like if a customer is walking by outside, they can’t tell that it’s a cannabis dispensary.
Eric – Totally understandable, except for the smell potentially. So I really wonder what happens after 12 months. And sometimes, some people that have converted if they would be allowed to keep them open as distribution points. That’ll be interesting to see if New York continues to allow that because it would create a lot of operational efficiency if not going from a store where you can have multiple jurisdictions would be pretty cool.
Security around delivery is constantly a conversation we have as a security firm. What has New York said about the security of their delivery drivers?
Brytany – Definitely. So the drivers actually don’t have to have cameras in the vehicles, whereas some states do mandate this. However, at surveillance monitoring, the areas of the warehouse are like 24 hours have to be operating and all the recordings have to be retained for 60 days. But furthermore, some of the additional security requirements for the delivery drivers and the employees themselves, all orders have to be prepaid. So in the off chance that there was a burglary, there would be no cash on the delivery driver. Cars can only contain up to $20,000 worth of cannabis. If somebody is on a bike or a scooter, you can only have up to $5,000 worth of cannabis. In addition to that, it’s mandated that the stores have an operating GPS system so that you can identify where the driver is at all times.
Eric – Really interesting. I wonder how to ensure the cargo of one of your delivery drivers. That would be a good follow up question for an insurance agent. I really wonder how that works. Okay. So let’s say I have a license. I’m looking at opening a temporary warehouse for 12 months and so on. How would I prepare?
Brytany – It’s quite a few different steps to it, even though this is a temporary solution, the state is still mandating that the licensees operate similarly today as they would to a fully functional brick and mortar store. So step one, you need to make sure that you have a strong and detailed delivery SOP that outlines the roles and responsibility of literally every single person involved from the owner operator to the dispatcher to the delivery driver themselves. Certain areas that you must make sure you have detailed procedures for include receiving, prepping, dispatching your delivery procedure itself, any safety protocols, and ending the shift delivery process. In addition to that, your inventory process and any supporting tools that your store may require. Your employees have to have mandatory training based on the states. In addition to that, they have to have ongoing training. As processes continue to evolve and change, you have to have a process to remain compliant at all times and inventory logs, complimentary SOPs and so forth. That’s just a start.
Eric – Just to start, that sounds like a lot. So these are also required for when they get their full licenses. So the work being put in now is not lost. It’s going to simply carry over.
Brytany – And will evolve as the business continues to evolve and adds on additional services or complimentary software
Eric – or the state changes their mind.
Brytany – Exactly. So we’ve seen that, for example, camera retention in states tends to be a factor that changes pretty regularly.
Eric – Yeah, Pennsylvania started with four years of onsite recording. I mean, people were setting up these massive racks. It was pretty insane. Then they came to their senses kind of. So how does Forte help an operator in this position?
Brytany – We can help in several different ways, but immediately next steps. If you do have a license and are looking to apply for a temporary delivery license to get funds starting to roll in, revenues start to roll in, we can help you with a fully custom delivery SOP. It’s anywhere from 10 to 12 pages depending on your business operations. And this SOP is not only just a template to help guide and get you approved, but it will literally help your team. Every member of your team would know exactly what to do, how to operate step by step and perform deliveries.
Eric – So it sounds not only like the SOP that is required for state, but also kind of an instruction manual of how to actually do it. That’s a really helpful tool for those that have not run delivery businesses in the past.
Brytany – Exactly. And there’s a ton of different steps and procedures, also things that happen that you wouldn’t expect, sometimes this fraudulent order is, sometimes you’ll take an order and realize that it’s a business rather than it’s a residential area. The staff member will then have to know what next steps are because you can’t deliver to a business. Also, anything, let’s say a staff member delivered an incorrect item to somebody and you needed to walk through next steps to ensure the customer received the correct item. There’s a ton of different steps the team needs to know in order to follow and compliantly complete delivery.
Eric – You know, that’s actually fascinating. They’re not allowed to deliver to businesses, is that what you said?
Brytany – Correct.
Eric – Wow. So I get deliveries at this office all the time. And it’s amazing, that’s fascinating.
Brytany – Yeah. So you do need to Google the place before if you’re not familiar with the order, let’s say it’s a new customer that’s ordering in a different place. We do recommend that the staff member Google to ensure that it is a residential area. In addition to that, you can’t deliver to somebody in a driveway, in a vehicle in front of the house. They have to be in the house itself.
Eric – It’s very specific.
Brytany – Right.
Eric – Yeah. Brytany, is there anything else you’d like to discuss today about New York and the temporary deliveries?
Brytany – Well, my background and love is about 16 plus years in retail. So our entire mission and goal here at Forte is to support retailers start up and scale their business. We want you to get doors open. We want customers through their doors. We want you to sell cannabis and provide accessible weed to the city of New York. So we are offering a custom delivery SOP which includes an hour and a half free consultation where we run through your entire business practice and really cater the specific process to your current team and your operational processes that you have in place already. It’s $750 for this SOP and 20% off for any Social equity Applicants.
Eric – It’s amazing. Amazing. Thanks again for joining us today.
Brytany – Thank you for having me.
Eric – Take care. Thanks, everybody, for joining.
