Three of the most booming online products right now are cannabis, alcohol, and tobacco products. All three markets have been flourishing amid the quarantines especially marijuana.
Post COVID-19, consumers are ordering online deliveries at a higher rate than ever before. Yet, both are still mired in the slow processing of IDs. According to VentureBeat, “Cann, an Oakland, California-based startup that sells low-dose cannabis drinks, told VentureBeat it has seen a 300% month-on-month sales increase in March, more than doubling the total units sold for January and February combined.”
One of the most critical aspects of ordering cannabis, alcohol, or tobacco products online, verifying IDs, is left to drivers scanning IDs upon arrival. Not only does such a model leave delivery services, like a local restaurant serving to-go margaritas during lockdowns, vulnerable to the legal liabilities of drivers not properly ID’ing customers, but the system is not compatible with the ongoing transition to more seamless e-commerce interfaces.
Cannabis, alcohol, and tobacco products
Physical ID verification brings a litany of problems, such as the customer needing to be present for delivery. It creates more friction throughout the entire process. For the delivery services, like Postmates and Grubhub, verifying ID’s layers costs on top of a business model already running thin margins.
“As retail stores are forced to go online, everything from alcohol to vape and CBD businesses are seeing a huge surge in online sales,” details Matt Fields, Vice President of AgeChecker “Adults need to help mitigate the risk of selling to minors while remaining compliant with state and federal laws.”
Maintaining compliance amid a changing landscape
Compliance risks when it comes to selling alcohol are a severe problem in their own right. Liquor licenses can run into the hundreds of thousands of dollars, and one incident of serving to a minor can forfeit the license without recourse.
Alcohol delivery services like Drizly rely on the driver verifying the customer’s ID via an app, but the additional costs for processing customer information can be onerous. Moreover, FDA requirements, state laws, and merchant account policies are continually evolving.
What’s needed is a web plug-in for age-restricted products, whether for an established online cannabis delivery service or restaurant looking to continue liquor sales amid shutdowns. Granular requirements for age verification can be hard to discern in many instances without some sort of standardized service.
For example, simplified age requirements for a national age minimum for tobacco products may have caused significant administrative problems for companies familiar with state and local laws. Legal indecision subsequently adds costs and risks to their business.
“There are still many by-location legal nuances tobacco businesses take into consideration when selling their products online,” details in a blog post. “Some of these, such as flavor bans, only apply to certain products within the Electronic Nicotine Delivery System (ENDS) industry. For that reason, our tobacco profiles do not reflect specific product bans. Clients may overlay any of our profile rule sets with custom rules, such as blocked locations, from their account dashboard.”
Cannabis, alcohol, and tobacco products and the law
Nuances like distinguishing between flavor bans of nicotine can become a headache for a run-of-the-mill retail business just looking to institute online sales temporarily. Otherwise, they can’t stay financially afloat from the non-existent physical sales. Even then, expect authorities to become more discerning about online sales of age-specific products once the lockdowns fade away.
Throw in the notion that they’re probably running short on expendable cash, and standardized solutions become the ideal option for the current predicament facing small businesses.
Especially considering the boom in boutique cannabis delivery services right now, an embedded web integration is precisely what companies need to remain compliant without sacrificing financial agility.
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