An Inside Look at the Marijuana Supply Chain

As consumers worldwide face higher prices, significant delays, and serious consumer goods shortages in the wake of the COVID-19 crisis and other global challenges, the supply chain is top of mind for many Americans. 

That may have you wondering if your favorite strain will also be affected? Retail is local for U.S. cannabis enthusiasts. So, global trends don’t have much of an immediate impact when it comes to getting cannabis flower from cultivators (grows) to manufacturers or retail stores (dispensaries).

However, higher fuel prices do impact transport. Plus, the manufacturers of devices like vape pens that rely on foreign metals or parts may see delays and higher prices. But overall, the transportation of cannabis itself is pretty constant, consistent, and straightforward.

According to experts and industry insiders, knowing your state’s rules and regulations is the most significant challenge. Like with everything cannabis, each state has its own requirements when it comes to marijuana’s transport (and the cash associated with it). Ultimately, it comes down to this: Safety first.

Many new businesses—with names like HARDCAR, Plymouth Armor Group, and Speedy Transporter, and staffed primarily by former military and law enforcement types—have cropped up around this new legal industry. And companies like INKAS Armored Vehicle Manufacturing and The Armored Group are turning normal-looking vans into armored vehicles specifically designed for the cannabis industry.

Long gone are the days of dispensary owners stuffing their trunks full of cannabis and taking it from the grow to the store. The pros have taken over transporting marijuana from the cultivator to the retailer, and they’re usually doing it in an fortified, bullet-proof vehicle.

But those pros face unique challenges beyond finding the right armored vehicle and security veterans to transport cannabis and its cash. Federal prohibition means that banking cannabis companies is technically illegal, so cannabis is still a cash-heavy business. And that illegal status at the national level means that transporting cannabis or money associated with it across state lines is a crime, too.

Companies like Plymouth Armor Group, which serves cannabis companies in multiple states across New England, must cross their T’s and dot their I’s and know every rule surrounding the transport of the plant in each state that it works.

In a recent interview with cannabis recruiting firm Vangst, Plymouth CEO Abbe Schnibbe and the former owner of Colorado’s first licensed cannabis transport business, Amy Sharp, gave their top advice for people looking to get into the transport business:

1. Insurance should be priority No. 1. And insurance is notoriously difficult to get in the cannabis industry

2. Law enforcement is your friend. The cops in legal states are no longer the weed-seller’s nemesis. You need them on your good side. Sharp said that goodwill goes both ways. The police appreciate an inside look at the business, its schedule, and what certain documents look like, and they’ll reciprocate that respect by looking out for you on the road.

3. Maintain strong relationships with banks and credit unions. These financial institutions are used to dealing with armored vehicles and understand state rules. For example, some states don’t allow armed guards to travel in trucks. That’s an important thing to know. And these financial institutions, which are already taking a considerable risk by working with a cannabis company, will want you to be as compliant as possible.

4. A cannabis transporter might be moving a lot of product and big money, but they shouldn’t expect to make bank. The overhead is high, and they’re technically plant-touching businesses, meaning they’re subject to Tax Code 280E.

Tax Code 280E is the cannabis industry’s No. 1 foil. The Reagan-era rule means that companies selling federally illegal narcotics, like marijuana, can’t claim the same tax deductions as other businesses. Thanks to that law, many cannabis companies see effective tax rates as high as 80%.

So when it comes to transporting cannabis from the grow to the store, U.S. consumers rarely need to worry about a supply-side crunch. But the people transporting the plant do have a lot on their plate.