Even though recreational delivery isn't legal here yet, the money is already on Colorado and metro Denver, in particular. A big player in alcohol delivery, Drizly has built up a significant logistical and consumer database for the Mile High City, which the company will put to use for its new cannabis delivery service, Lantern.
The cannabis e-commerce app launched in Massachusetts earlier this year after Drizly's latest round of funding, valued at $34.5 million. Instead of hiring drivers like Postmates or Uber Eats, Lantern operates the online retail side, connecting pot consumers with dispensaries and their delivery drivers. To learn more about Lantern's plans, we caught up with Drizly and Lantern co-founder Justin Robinson.
Westword: How does Lantern work? Do you have your own drivers and cars?
Justin Robinson: We will provide marketing and e-commerce needs and software support, both to drive customers in and to also facilitate logistics on the back end, to make sure they're managing capacity and demand. Dispensaries can choose to bring in their own vehicles and drivers, or outsource that to a third-party transporter, which most municipalities will allow.
Why go with a separate name for weed? Drizly seems to have created a name for itself, and that comes with user access.
We spent a decent amount of time debating that. Frankly, our thesis is that cannabis is fundamentally a different product from alcohol, especially given that cannabis is used both medically and for adult use. In the beverage and alcohol space, folks usually know what they want and what they're buying, but in the cannabis space you're going on this journey with most folks across the country who want to know what the right product is for them, and how to start. We wanted to create a different brand and experience that will help guide them and facilitate that cannabis transaction in a more interesting way.
How do you view the Colorado cannabis market's potential for delivery? Recreational cannabis is pretty well established here. Is that an advantage or a drawback?
We think it's a big opportunity. The Denver area is Drizly's third-biggest market right now, and we're in most major cities across the country. That lends itself to saying that Denver's market will be strong for cannabis delivery. Obviously, the market is much more mature here than other markets where delivery is rolling out, so there is much better access to dispensaries in Denver. That could be a weight on how big delivery can be, but in the end, from Drizly data, we know that the Denver consumer wants products delivered.
Going beyond that, Colorado has been a pretty insular cannabis industry until recently. How do you gain the trust of local businesses, some of whom feared how delivery would impact their profits?
From our experience with Drizly, delivery is very important for small businesses that are trying to gain incremental market share. Stores of all sizes will be involved, but if a smaller operation is able to do delivery really well, there's no reason they can't compete with the bigger operations and try to tap into a market that isn't right next to them. That essentially creates a bigger market opportunity, because it extends that customer base across the entire city.
As a large operator, how does Lantern view cannabis industry social equity provisions in Colorado and local communities? And how does Lantern enter and profit from that while still enabling social equity?
We're very supportive of social equity issues in Colorado. It's a little late to the game, but it's good the state is prioritizing it now. We think delivery is a very interesting opportunity for social equity. The barriers to entry are slightly lower than [in other parts of the industry] and require much less up-front capital. It's a nice entry point into the business, because they'll get a broad perspective of what all of these different operators are like. We're really excited to have Colorado prioritizing social equity now, and very much hope that more Colorado municipalities will follow what's happening in Denver and Aurora.
We started an incubator in Massachusetts; that's where we're headquartered, and Massachusetts has done a good job in at least attempting to prioritize social equity. So we started that incubator program there to help folks start delivery businesses, and we've since partnered with the Color of Cannabis in Colorado, which started a program to help local folks learn more about the delivery program in a ten-week course. More specifically, we have some partnerships with a couple of aspiring social equity transport companies, so we'll see what happens in Aurora or Denver soon.
What areas besides Denver do you anticipate being fertile for delivery?
Colorado Springs and Fort Collins have said no, but we're still looking at bigger towns in the greater Denver area, like Denver, Aurora, Boulder and surrounding suburbs that are looking at delivery approval.