David Hua, the CEO of California software company Meadow, estimates 40%-45% of the state’s cannabis market is delivery-based.

Eaze, the San Francisco-based cannabis delivery company, recently conducted a survey of its customers to get a better idea of their backgrounds and habits. Here are some of the key findings of the report, based on the anonymized consumer behavior data from Eaze’s database as well as attitudes and usage data based on nearly 4,000 survey respondents:

• First-time cannabis consumers grew by 140% thanks to adult use legalization.
• Consumers 50+ were one of the fastest growing age groups, increasing by 25% over the past year, and their spending was 53% higher than for other age groups.
• ‘Millennial’ category between the ages of 22 and 34 is still the biggest group, with the average age of customers is 31.
• Consumers average order volumes rose 29% and they order cannabis more frequently than ever, every 8 seconds in average.
• With female consumers nearly doubling, the growth of women entering the market outpaced men and continued the trend of increasing female participation, with women now 38% of cannabis consumers.
• Products that don’t require paraphernalia, such as ready to use prerolls, edibles, and vaporizers, are gaining momentum over traditional flower purchases.
• The most popular vaporizers are those designed for beginners. Consumers prefer hybrid flowers over Sativa and Indica strains. Edible forms continue to grow in popularity, probably due to the new trend of lower-dosed edibles, and gummies are the most popular form.
• CBD consumers nearly doubled in 2018, growing from 2.6% in 2017 to 4.8% in 2018. Consumers 50+ are the most common CBD users of all age groups (8.4% in 2018).

The business model for a delivery service varies. While some companies provide actual delivery services, others such as Meadow and Eaze offer online technology platforms that cannabis consumers use to order. The orders are relayed to retailers, which perform the actual delivery.

Starting a cannabis delivery service business is a great alternative to the traditional route of opening a dispensary if your starting capital is less than $100,000 however you intend to get 20% operating profit. This cannabis business also affords you a much greater opportunity to provide 1-on-1 service to your customers.

Profit margins cannabis delivery business are more modest than for other types of cannabis business due in part to the fact that median direct costs for retailers are also the highest in the industry. Across all states, retailers earn between $2 million and $4 million in gross revenue. With an average income of $2.5 million per year and a net profit of at least 10%, delivery business owners can make a profit of $250,000.

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