280E Considerations for Delivery Operators
A non-storefront retailer faces the same reseller limitation as a storefront dispensary, with a cost structure weighted toward exactly the expenses 280E disallows: drivers, vehicles, insurance, fuel, dispatch software, marketing and customer acquisition. Outbound delivery cost is a selling expense; only the inbound cost of acquiring inventory is inventoriable.
That makes unit economics unforgiving. A delivery operator has to earn its margin on basket size, order density and driver utilization, because there is no tax relief on the cost of getting product to the door. California's decoupling from 280E means those costs are still deductible on the state return, which softens but does not solve the problem.
- Inventoriable: product cost and inbound freight only
- Disallowed federally: drivers, vehicles, fuel, insurance, dispatch, advertising
- Cost per delivered order is the metric that determines viability
Cost Accounting, Inventory and METRC on the Road
Delivery inventory moves. Product loaded into a vehicle remains the operator's inventory and remains tracked, and California requires the inventory in a delivery vehicle to be reconciled at the end of the shift. That daily cycle — load out, sell, return, reconcile — should produce a signed record that ties to METRC and to the POS, with returns and undelivered orders restocked and recorded the same day.
Cash collected in the field adds a control layer: driver-level cash accountability, sealed deposit procedures and same-day counting under dual control. Shrinkage in delivery, when it occurs, almost always shows up in the gap between vehicle manifest and end-of-shift reconciliation.
Unit costing should be built per order: product cost, driver time, mileage, and a share of dispatch and insurance. Reported by zone and daypart, it tells the operator where to expand, where to set minimums and where to stop serving.
Tax Planning and Recommended Services
Planning centers on vehicle and equipment treatment, driver classification — employee versus contractor, which in California carries significant exposure under ABC-test rules — insurance cost management, and estimated payments computed on gross profit rather than book income. Operators expanding across city lines also pick up multiple local cannabis tax registrations that each need tracking.
We build the accounting system first and let the tax return follow it. If you operate a licensed California delivery service, a diagnostic review will quantify what your current treatment is costing you before any engagement begins.
