Last updated on August 5th, 2024 at 02:31 pm
While the cannabis industry is one of the fastest growing consumer markets in the U.S. today (40% growth in sales during 2021), in many ways, it is still in its infancy. That’s why, when the Covid-19 pandemic brought the economy to a standstill by forcing businesses to close their shops, many of us were unsure if cannabis businesses could weather the storm. But in the face of these challenges, dispensaries across the U.S. developed innovative solutions, none of which has been more impactful than the implementation of cannabis delivery services.
But cannabis delivery comes with its own unique challenges for brands and retailers, whose operational priorities include maintaining 100% compliance with municipal, state, and federal regulations. Most regulations for cannabis sales are written with a brick-and-mortar dispensary in mind, and so can be difficult to translate into a delivery workflow.
No matter which state they are shopping in, cannabis consumers are always required to show valid identification when purchasing cannabis products – and it is the responsibility of the business selling these products to verify them. Failing to sufficiently check a customer’s ID can result in serious penalties, including hefty fines, loss of business licensure, and even criminal charges.
How are businesses with cannabis delivery maintaining compliance?
With the consequences of non-compliance so steep, dispensaries with a delivery arm can’t leave anything to chance.
But validating ID for cannabis purchase is even trickier in a delivery environment. Most of the top-tier scanners for detecting fakes require being wired to a desktop computer, with desktop ID verification or authentication software. They can’t be taken to a delivery site via car.
Furthermore, retailers that rely on overtaxed drivers to manually spot fake IDs when delivering products are fostering risks that make the businesses, and the drivers themselves, unnecessarily vulnerable. Detecting fakes and navigating the tricky conversations when fake IDs are encountered is hard enough inside the dispensary. Doing it at someone’s front door is even harder!
The solution? ID scanning technology that takes the guesswork out of the ID verification process. We foresee two primary options being favored by cannabis dispensaries that offer delivery.
Mobile solutions
The easiest way for dispensaries to maintain ID verification compliance in a delivery environment is through mobile scanners. Many dispensaries try to do this using phones, but the cameras on iPhones and Androids simply are not powerful enough to properly scan IDs or detect fakes with any reliability.
Mobile hardware, designed for scanning IDs on-the-go greatly increases reliability with an improved camera, laser lighting that ensures the ID is properly lit for scanning, and native integration with barcode scanning software.
These mobile solutions make verification easy, leveraging the precision and speed of AI technology to efficiently inspect IDs for the markers that prove their legitimacy. These solutions use image processing tools to look for age, expiration status, and the other key indicators of a valid ID. They can be directly integrated with POS systems as well to sync the ID scan, customer identity, and the bill into a joined record.
Mobile ID scanning tools can even function offline, guaranteeing that cannabis delivery drivers are always able to verify customer IDs no matter where they are.
Mobile app ID verification
The second solution is the use of a pre-verification process using a mobile app. In this scenario, customers verify their identity on their phone before the delivery person leaves the dispensary. In this scenario:
- The customer takes a photo of the front and back of their ID
- The customer takes a selfie
- ID Scanning software confirms validity of the ID
- Facial recognition software matches the selfie and the photo on the ID
This process takes roughly 10-12 seconds, but it removes much of the friction, and the need for the driver to scan or verify the ID – the customer is already approved for purchase in the app and their ID is on file. Fake IDs are caught well before the delivery begins.
We believe mobile ID verification is likely the future of identity validation for age-restricted purchases. However, there is a barrier for small dispensaries as mobile ID verification requires use of a mobile app or website.
Additional benefits of ID scanning for cannabis delivery
In addition to the obvious practical benefits of mobile ID scanning resources, cannabis dispensaries integrating this technology also profit from the enhanced ability to gather reliable consumer data.
Data is one of the most valuable assets that any dispensary owns (providing useful insight into customer demographics, shopping patterns, and other behaviors), which can then be leveraged to improve a wide variety of strategic business activities. This is not possible with visual ID inspection.
These insights can be used to develop:
- Geo-location ad targeting – Consumers are more likely to order cannabis delivery from retail locations that are closest to their homes and where they work. By determining the radius from a dispensary location where the most customers are shopping (known as trade area targeting), dispensaries can develop partnerships with other local businesses where customers also shop, and can develop more effective competitive conquesting activations that pull business from other dispensaries in the same area.
- Deals, Promotions, and Experiences – Data gathered from ID scanning technology can help dispensaries track the buying behaviors of customers, indicating which products consumers are drawn to. This information can be used to develop deals and promotions that customers will respond to, as well as strategies for live experiences to introduce new product rollouts and to optimize big sales days (like 4/20).
- Digital Out-of-Home (DOOH) ad content – Customer data is also useful for tracking engagement with DOOH ad content, letting businesses know which billboards, signage, and online advertisements their consumers are engaging with. Additionally, once consumer information is integrated into dispensary databases, retailers can track the non-cannabis interest intersections of their customers to identify the platforms where DOOH ads will be the most effective.
- Measurable KPIs – The development of Key Performance Indicators (KPIs) are essential to growing a cannabis business, giving brands/retailers the information they need to see which business strategies are working (and which aren’t). Without KPI data, cannabis brands and retailers have no way to measure their own success.
Get scanning
Cannabis delivery is the future of the cannabis industry, giving businesses the opportunity to serve customers that they would otherwise lose. With the strength and security of mobile ID scanning technology, business leaders can protect their assets by maintaining 100% compliance standards. And with the additional benefits provided by data harvesting applications (an innate feature of ID scanning tools), cannabis establishments can improve marketing activations, growth strategies, and the overall consumer experience. That’s just good business.
To learn more about mobile ID scanning solutions for cannabis delivery or to schedule product demos, reach out to a specialist at IDScan.net today.
