One of the lessor talked about aspects of the marijuana industry in Washington is transportation of product. Like most parts of the industry, there are many areas of opportunity which is what Cannaport is currently addressing by offering marijuana transportation services to producers and processors throughout Washington state.
After talking to many producers, processors and retailers it is very clear that there are many problems that the industry faces. These problems really boil down to two big overarching categories. Price and responsibility. To really understand the nuances of each of the problems, we have to explain what the current transportation scene is like in Washington state.
In Washington there are roughly 40 transportation companies that deal specifically with transporting of marijuana between businesses, which consists of less than 1% of the entire industry in Washington state. The job of a 3rd party transporter license is exclusively to enable 3rd parties to move product from licensed businesses to other businesses within the industry. According to state regulations, vehicles have to be licensed and approved to hold cannabis by the state, product cannot be held by the transportation company for more than 48 hours, and all transactions have to be manually recorded.
Most transportation in this industry also operate with a “per delivery” system, where they charge either a flat fee for each delivery, or some variation of this system. This system ensures that transportation companies are able to breakeven with operation costs, and make some profits. This system, however, places the financial burden and responsibility on producers, who are already financially strained from the market, and is exacerbated by the fact that most producers can’t seem to trust transportation companies. Pricing wise, because of the small margins, many producers/processor do not seem inclined to use 3rd party transporters because they feel that their limited margins are cut even closer. Some also believe that it is cheaper to have these products delivered in-house rather than have outside parties deliver them. Although these are valid concerns, we have discovered that it is cheaper to use 3rd party transporters for delivery of all products because of the hidden costs associated with doing deliveries in-house (insurance, waiting time etc.)
Responsibility is another factor that plays into how this industry functions. Right now, many producers and processors (P/P) have low expectations for 3rd party transporters. Some of the more institutional players have had issues with misplacing product, losing product (across state/country borders) and bad customer service. An example would be one of our clients we worked with that claimed that some delivery drivers ignore their requests for pickup and end up offending the client themselves with their actions. The bar for 3rd party transporters is very low because there are such few players and those who are do not offer the quality of service needed to be responsible. As a result, many P/P do not trust 3rd party transporters to effectively transport and move product due to the risk of losing and breaking product, and also the terrible customer service associated with a 3rd party.
The reality is a 3rd party transporter is that we beneficial to P/P, contrary to popular opinion in the industry. In other industries almost 80% of all transportation is done by third parties and 20% is done in-house, whereas in cannabis it is essentially the opposite. Transportation companies exist solely to help producers/processors do what they do best: grow and manufacture. Why spend more resources trying to worry about selling products and getting products from place to place when you could be focusing on growing better product and creating innovative ways to grow more efficiently.
That’s what Cannaport is doing, we are trying to help P/P do what they are good at, at a price that is lower than anyone in the industry is currently offering. Being 20%-40% cheaper than our competitors is not an easy thing to do, but we can help you save up to 50%+ of costs using our service than doing it in-house. We believe that having cheaper prices is important, but being able to use us according to your schedule is more important. We work with all our P/P to figure out the best routing, pickup and drop-off so that we can save you money and also fulfill your needs on a flexible basis. We don’t require scheduling 3+ weeks out because we understand that such a long scheduling time doesn't help your business.
Not only that, we also provide real-time tracking with our drivers. When our driver starts your delivery, we'll send an email letting you know the trip has started and allow you to track where the driver is on the road. Once the delivery is 15 minutes away from the destination, we send a notification letting the recipient know that the delivery is arriving. After the delivery is finished, we let you know that the order has been completed. This gives you perfect transparency and ability to see and track where all the products are on the road.
We are an extension of you. We aim to ensure that every delivery that we do for you represents your company and the values that you believe in. As a transporter, our job isn’t just to meet your transportation needs, but it is to help alleviate problems and ensure success. That’s why we are able to provide a service that is reliable, cheaper and committed to helping all P/P create great product, and get it to people everywhere we go.