Chris Vaughn has a unique perspective to compare cannabis and alcohol markets. As the CEO of Saucey, an alcohol delivery service, as well as Emjay, a cannabis delivery service, Vaughn is simultaneously ingrained in both of these regulated industries.
Interested in his viewpoint, Cannabis Tech reached out to Vaughn for a quick interview to learn more about how these two sin industry segments are stacking up when compared side by side.
A Tale of Two Delivery Services
Q: Chris, tell me how the intersection of Saucey and Emjay happened.
A: We started Saucey back in 2014 around the hypothesis that for most people, purchasing alcohol is an impulse-driven or convenience-driven purchase. In many ways, the brick-and-mortar landscape of alcohol has been built to match that style of buying behavior.
We saw that there was almost no loyalty at retail. In the US, there are more liquor stores in the country than grocery stores or gas stations, but loyalty to any given store is very low. So, we thought if we introduced a fast, reliable delivery service to a category where most purchases are driven by impulse and convenience, then we could consolidate buying behavior and build loyalty where the traditional brick-and-mortar businesses struggle.
Then, around 2016, customers started asking when we were going to introduce cannabis delivery, which sparked our interest. In alcohol, our biggest competition is the liquor store or grocery store, but in cannabis, the brick and mortar model is very rudimentary.
Think of it like this, alcohol prohibition ended in the 1930s. At that time, if you wanted to give consumers access to a product, you built stores. But if you’re building for customers in the 2020s, the model will look different, and you’re certainly not going to build 4,000 stores.
Is Cannabis Delivery Here to Stay?
Q: Cannabis delivery ramped up during the pandemic. How do you feel overall about the future of cannabis delivery?
A: I think states that do not introduce meaningful, competitive delivery regulations aren’t really serious about legalizing the industry or their state. For example, New York is probably the biggest cannabis delivery market in the world. New Yorkers don’t go down to the bottom of their building to even get pizza – they order it up. You could put a dispensary on the ground level of every building in New York, and people would still prefer to have it delivered.
As you’re building out these new legal markets, you have to think about the customer. Start with who are you building for and what do you need to build for that customer, and think backward from there. Legal markets must ask,
“How do we serve these customers better than the illicit market does?”
How Do Alcohol Consumers Stack Up to Cannabis Consumers?
Q: So, obviously, as an online delivery service in both verticals, you have a unique perspective on the two markets. What are some of the interesting consumer data points you’ve discovered?
A: Well, for starters, the audience in cannabis is definitely skewed toward the younger generations. 21-25 on the adult-use market or 18-25 with a medical card make up 25% of our customer base on Emjay. Yet, on Saucey, the same demographic only makes up 5% of our buying customers.
The percentage of 25-35 is roughly the same, but above that, the customer base starts to heavily skew older on the Saucey platform. Simply put, the Saucey customer base is largely 30 plus, while one-quarter of the Emjay user base is under 25.
Q: Do you have any speculation why this is the case?
A: Well, alcohol is treated so much differently these days; you know, when we were in high school or college, drinking was a big part of life and our culture. We’ve done a few surveys, and it’s pretty straightforward. We heard things like,
- “It’s unhealthy.”
- “It makes you gain weight.”
- “I don’t know why you’d want to be hungover.”
- “I don’t like spending half of the next day recovering.”
Additionally, cannabis provides many more entry points for consumers. Sure, alcohol has beer, wine, and spirits, but at the end of the day, they all provide a similar effect – inebriation.
Cannabis, on the other hand, provides a wide range of effects beyond intoxication and comes in multiple familiar forms, like gummies, vapes, or beverages. With so many more entry points and a demographic laser-focused on mental wellness and overall health, cannabis is simply more appealing.
Q: Now, I know it’s early, but have you been able to identify any measurable number of older adults who are making the shift from alcohol to cannabis?
A: Well, I think that we’ll be one of the first platforms that can measure that over a period of time, but it’s still early. We could identify the consumer who is purchasing from Saucey, then starts purchasing from Emjay, and then determine whether or not their alcohol purchases start to diminish. And, while it's still early, that is certainly one of the data points we’re watching very closely.
As the market continues to mature and stigmas about cannabis consumption continue to dwindle, it will be interesting to see how the demographics of cannabis consumers evolve. At the helm of intersecting industries, Vaughn has a front-row seat to watch the transition.