As cannabis companies scale their operations, the logistics debate intensifies: are centralized distribution hubs more efficient than direct-to-customer (DTC) shipping models? In a tightly regulated industry where every gram must be tracked and securely transported, choosing the right fulfillment strategy can significantly impact margins, compliance, and customer experience.
For many licensed operators, particularly multi-state operators (MSOs), distribution hubs have emerged as a cornerstone of operational efficiency. These centralized facilities allow companies to aggregate inventory, optimize delivery routes, and implement uniform quality control measures. In contrast, DTC shipping models—where products move directly from the grower or processor to the consumer—can be faster but often come with higher per-order costs and limited scalability.
According to cannabis logistics consultants and real-world MSO case studies, the hub-and-spoke model enables tighter control over product movement and compliance documentation. By funneling products through licensed distribution centers, operators can ensure all products are METRC-tagged, batch-tested, and labeled in accordance with state law before entering the retail or delivery channel. This centralized handling streamlines recordkeeping and auditing processes—critical in avoiding regulatory violations.
Shipping from hubs also allows businesses to consolidate orders and reduce “last mile” delivery inefficiencies. Rather than dispatching vehicles for individual consumer orders from scattered production facilities, companies can route multiple orders from a single hub, saving on fuel, labor, and time. In regions with dense customer bases, this method significantly lowers cost-per-delivery and allows more predictable service schedules.
Additionally, hubs support inventory pooling and dynamic restocking strategies. Operators can keep a balanced supply of SKUs at a central hub based on live demand analytics, helping avoid product shortages at dispensaries or overstock at satellite locations. With many cannabis products—especially edibles and concentrates—having limited shelf lives, real-time stock rotation is crucial for minimizing waste.
That said, the DTC model still has value, especially for vertically integrated brands in single-state markets or rural areas where shipping volumes are low. Smaller operators or niche craft producers may find direct models more cost-effective in the short term, especially if compliance infrastructure is already in place. However, this often comes at the expense of delivery speed, customer service consistency, and inventory flexibility.
In a 2024 logistics benchmark report, cannabis brands that adopted a hybrid model—centralized hubs feeding both retail stores and select DTC channels—saw the highest customer satisfaction and lowest operational costs per unit shipped. This approach provides the best of both worlds: efficient routing and compliance controls, paired with targeted direct engagement.
As the cannabis supply chain continues to mature, distribution hubs are proving to be more than just storage centers—they are operational command centers driving efficiency, compliance, and profitability.