This segment connects licensed cannabis operators (cultivators, manufacturers, dispensaries) and ensures the secure, legal, and efficient movement of cannabis products across the supply chain.
Core Functions- Secure Transport
- Physical movement of cannabis and cannabis-derived products
- Vehicles must meet strict security standards (e.g., locked compartments, GPS tracking, armed or licensed drivers in some states)
- Inventory Management
- Real-time tracking of product quantities, batch IDs, expiration dates
- Integration with state-required traceability platforms (like METRC or BioTrack)
- Compliance Logistics
- Verification that all shipments are licensed, documented, and reported
- Chain-of-custody documentation to prevent diversion or mislabeling
- Adherence to testing, packaging, and labeling laws before distribution
- Order Fulfillment
- Pickup, warehousing (in states where permitted), and delivery to licensed retailers or processors
- Includes B2B fulfillment and, in some states, direct-to-consumer (delivery) services
- Must obtain a cannabis distribution license separate from cultivation or retail
- Often prohibited from holding other license types to prevent vertical control
- Required to pass regular compliance checks, inspections, and reporting audits
- Regulatory Variability: Rules differ widely by state, and even by county or city
- Cash-Only Constraints: Many transactions are cash-based due to banking limitations, increasing security needs
- Cost-Intensive: High insurance, security, compliance, and technology overhead
- Scale Limitations: Limited routes or markets due to patchwork legalization across states
- Technology Integration: Platforms offering route optimization, digital manifests, and real-time compliance syncing
- Cold Chain Logistics: For temperature-sensitive edibles, concentrates, or beverages
- Multi-State Logistics Coordination: Emerging in limited ways for hemp and federally legal cannabis components
- Niche Delivery Services: Serving hard-to-reach dispensaries or on-demand home delivery (where legal)
