Uber Delivers Cannabis in Canada – Let’s Hash Out the Opportunities for Food Delivery and Cannabis in the U.S.
It was widely reported in November 2021 that Uber would be entering the Canadian cannabis industry via its Uber Eats platform.
This, of course, has led to speculation that Uber Eats could begin delivering cannabis in states in which adult-use cannabis has been legalized.
Is it true?
To put it bluntly, the answer is: it’s highly unlikely. First, it should be noted that while Canadians will be able to purchase cannabis through Uber Eats, Uber will not be delivering those goods. While dispensaries can deliver cannabis in Canada, third-party delivery services cannot. Thus, in Canada, Uber Eats will only allow you to purchase cannabis for pick-up, specifically at the Tokyo Smoke line of dispensaries.
So, what about the U.S.?
Even if Uber Eats was making cannabis deliveries in Canada, it would still be unlikely that Uber Eats would enter the U.S. delivery market. With the U.S.’s patchwork of cannabis laws, Uber Eats would need to undertake the expensive process of ensuring compliance with each state’s cannabis regulations. Further, in states that permit delivery of cannabis, some form of license is required, with states either limiting delivery to those with a dispensary license or offering a delivery license specifically for third-party delivery services.
Too much green for the green.
In the states in which Uber Eats would be able to deliver cannabis, Uber Eats would have to go through the often-times expensive licensing process, on top of following disparate state regulations. For example, if Uber Eats were to obtain a delivery license in New Jersey, Uber Eats drivers would need to have secure lockboxes in their vehicles, verify purchaser age, and possess Cannabis Business Identification Cards. Further, Uber Eats would need to ensure the delivery vehicles for at least $1,000,000 per accident/occurrence and provide the Cannabis Regulatory Commission with vehicle information. And this is just for New Jersey – other states have different requirements that the company would have to comply with. While Uber Eats may feel that this undertaking is worth pursuing, it appears unlikely we will see Uber Eats delivering cannabis to people’s homes in the near future.
We won’t be a total buzz kill…
While Uber Eats and other food delivery services are unlikely to hit the cannabis industry just yet, there is an opportunity for strategic partnerships between food delivery services and restaurants with cannabis businesses. Specifically, food delivery services, restaurants, and cannabis consumption lounges. For example, under New Jersey law, a cannabis dispensary with a class 5 retailer license and an approved consumption area endorsement may operate an on-site consumption lounge. Here’s the thing…consumption lounges are barred from selling food. But! There is no bar on bringing outside food into a consumption lounge, so you can have your cannabis, and eat too. And the opportunity for local food delivery services and restaurants is that they may seek to capitalize on delivering food to consumption lounge patrons. Consumption lounges may even choose to have menus on-site from local restaurants for their patrons’ convenience. And, of course, New Jersey will have cannabis delivery services; they’re just unlikely to be Uber Eats.
Will the option to bring food in be extracted from the equation?
It’s certainly possible that New Jersey’s revised regulations will bar consumption lounges from allowing patrons to bring their own food, or from allowing food delivery services to make deliveries to patrons at the location. However, as currently written, New Jersey’s regulations provide an opportunity for restaurants and food delivery services to target consumption lounge patrons and fill a need which consumption lounges are not permitted to fill themselves. In other states, restaurant owners and food delivery services may also want to look into the applicable regulations regarding food in consumption lounges.
So, while Uber Eats may not be delivering cannabis to you any time soon, they may launch a campaign to light the way forward for food delivery services and consumption lounges.
As the law continues to evolve on these matters, please note that this article is current as of date and time of publication and may not reflect subsequent developments. The content and interpretation of the issues addressed herein is subject to change. Cole Schotz P.C. disclaims any and all liability with respect to actions taken or not taken based on any or all of the contents of this publication to the fullest extent permitted by law. This is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Do not act or refrain from acting upon the information contained in this publication without obtaining legal, financial and tax advice. For further information, please do not hesitate to reach out to your firm contact or to any of the attorneys listed in this publication.
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