Drop’s Founders on Cannabis Delivery Costs: “Dispensaries Shouldn’t Have to Become Logistics Companies”

Burn After Reading The 30-second intel for operators and investors ⏱ 0:30

Drop, a Denver delivery platform, has dispensaries pay a set per-delivery fee to licensed transporters while consumers pay a $10 Drop fee. Retailers set order minimums and can add up to $10 more. The company gave no transporter fee or margin data.

• Operators: Delivery adds fulfillment cost, so it pays only if it brings new customers or larger baskets, not shifted in-store sales. Minimums and pass-through fees let retailers shape margins, but the transporter fee is undisclosed.
• Investors: Drop offers no figures on retailer margins, order volume or retention. It holds a stake in a licensed transporter and plans Denver-first growth, so expansion depends on proving the model locally.
• Do now: Model delivery per order: estimate the transporter fee, your minimum and the consumer pass-through, then check what share of orders would be new sales rather than shifted in-store ones.

Short on time? You’re done. Want the numbers?Keep reading ↓

Offering cannabis delivery gives dispensaries another way to reach customers. It also introduces a business question: who pays to get the order to the door, and how much of the sale does the retailer keep?

For Drop co-founders Kat Savoy and Teri LeBlanc, the answer starts with connecting dispensaries to licensed transporters while letting retailers set order minimums and decide how much delivery cost to pass along to consumers.

“Dispensaries shouldn’t have to become logistics companies to offer delivery,” said LeBlanc, the company’s chief technology officer. “Technology alone doesn’t solve the problem. You also need reliable, licensed transporters to actually fulfill those orders.”

Following Drop’s introduction to the Denver industry at IgniteIt’s September 18 event, Savoy and LeBlanc discussed delivery fees, order minimums, consumer shopping habits, routing technology, regulatory compliance, relationships with licensed transporters, customer ownership, and their plans for growth.

Who Pays for Cannabis Delivery?

Under the model described by Savoy, Drop’s CEO, the dispensary pays a set fee per completed delivery directly to the licensed transporter. The consumer pays a $10 Drop delivery fee.

Retailers can set their own delivery minimum and charge consumers an additional delivery fee of up to $10 to offset more of their expense.

“Operationally, very little changes inside the dispensary,” Savoy said. “They prepare and pack orders as they normally would, while Drop and the transporter handle the delivery infrastructure.”

Those choices give retailers some control over the economics of each order. A minimum purchase requirement can help justify the delivery expense, while passing more of that cost to the consumer changes the price of convenience.

“Because retailers control their order minimum and how much of the delivery cost they pass through, they can structure delivery in a way that makes sense for their margins,” Savoy said.

The company did not specify the transporter fee or provide figures demonstrating the model’s impact on retailer margins, order volume or retention.

Larger Baskets—and the Question of Incremental Sales

Savoy said retailer delivery data the company has seen suggests delivery customers can place larger orders than customers shopping in stores.

“Delivery doesn’t have to capture every transaction to make a meaningful difference,” she said. “Even if 5% of the business it generates comes from a new customer, an additional purchase or a larger basket, that incremental revenue can matter.”

That 5% figure illustrates her argument. Retailers benefit more when delivery brings in new customers or additional purchases. Moving an existing in-store purchase to delivery adds a fulfillment cost without increasing sales.

Savoy also sees several potential customer groups beyond shoppers seeking convenience, including busy parents and professionals, people without easy transportation, customers who value privacy, and elderly or immunocompromised consumers.

“Those are different use cases, but they all create opportunities for retailers to reach customers in moments when an in-store visit may not happen,” she said.

Keeping the Dispensary’s Customer Relationship

Adding delivery can also raise questions about where customers shop and which company maintains the relationship.

LeBlanc said Drop integrates with retailers’ existing technology, allowing customers to order delivery through the dispensary’s current ecommerce experience.

“We don’t think offering delivery should require a retailer to hand its customer relationship over to someone else,” she said.

Drop also offers a separate marketplace where retailers can operate branded storefronts. LeBlanc said the company plans to invest in consumer awareness of cannabis delivery to generate additional volume for its retail partners.

The two channels serve different purposes: delivery through an existing store’s website supports the shopping experience customers already use, while the marketplace gives retailers another place to be discovered.

Connecting Software With Licensed Transporters

In Denver, LeBlanc said Drop has focused on building relationships with social equity transporters. The company provides technology and compliance infrastructure while connecting dispensaries with licensed businesses that fulfill orders.

According to LeBlanc, Drop is an approved custom integrator with Metrc, with workflows covering transfer manifests, sales receipts, and returns.

Its routing and batching engine evaluates orders, driver locations and operational rules to determine how deliveries are grouped and assigned, she said. Dispensaries prepare and package the products, and licensed transporters deliver them.

LeBlanc also disclosed that Drop holds an ownership stake in a licensed transporter, which she said gives the company firsthand insight into fleet operations, driver quality and product handling.

“The goal isn’t to give dispensaries another piece of software to manage,” she said. “It’s to give them the infrastructure they need to offer delivery without having to build a delivery operation themselves.”

Denver First

Savoy said the response at IgniteIt’s Denver event reinforced the founders’ view that retailers want delivery without having to assemble the operation themselves.

“We had great conversations with dispensary groups across the market and came out of the show engaged with LOVA, which was exciting for us,” she said.

For now, the company’s priority is adding Denver retailers and strengthening relationships with licensed transporters. Expansion to other markets would follow that work.

“If we can build a model that works for retailers, transporters and consumers in Denver, we’ll have something we can thoughtfully take into other markets,” Savoy said.

As IgniteIt heads to Los Angeles for its California Market Spotlight, the Denver conversation offers a useful question for retail operators: does a new sales channel generate enough additional business to cover the cost of serving it? Delivery fees, order minimums, and customer retention are where that answer begins.