How Caliva Survived A Business-Ending Regulation

In January, delivering cannabis in California became a lot more complicated

In January, delivering cannabis in California became a lot more complicated. That’s when a series of state regulations passed, including a mandate that cannabis companies employ drivers and pay them at least minimum wage — plus benefits. Unlike most other companies, such as pizza parlors or laundry services, contractors would no longer be allowed.

The law quickly killed off a lot of delivery businesses. Many dispensaries couldn’t afford to pay drivers more. But at the California company Caliva, a different conversation happened. Caliva grows its own cannabis, makes its own products, wholesales them, and operates its own store — but it defines its mission more simply: “ubiquitous access.” That is the brand’s North Star, says CEO and president Dennis O’Malley. Everything it does must be aimed at expanding access to cannabis.

So, what about the regulations? Caliva treated them as a business opportunity. If competitors were going to simply meet the regulations, Caliva would exceed them.

“We never considered doing anything other than growing [the delivery service],” says O’Malley. Cannabis retail sales are banned in 390 of California’s 481 municipalities, so delivery is often the only way to reach people. Many of Caliva’s users are in senior homes or have a handicap and are unable to get to a store. As other companies stopped delivering, Caliva saw an opening.

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