A new entity has emerged as a significant player in the rapidly expanding consumer goods sector, specifically in the delivery of alcohol and cannabis: Pacific Consolidated Holdings Group.

Investment firms and leadership teams previously involved with Saucey, a Los Angeles-based alcohol delivery service, and Inception Companies, the financial supporter of cannabis distributor Emjay, have joined forces to create Pacific Consolidated. This merger aims to establish what is anticipated to be the world’s largest company operating in the “vice” industry.

(Considering the current global pandemic and unprecedented political climate since the 1960s, the traditional definition of “vice” is being re-evaluated.)

The financial specifics of this transaction have not been publicly released.

This consolidation represents the initial phase of a broader strategy for PCH (also referred to as the highway along the California coastline), which intends to become the premier vertically integrated platform for the “vice” sector, concentrating on e-commerce, delivery logistics, and insights into consumer behavior across different industries.

Chris Vaughn, co-founder of Saucey and now CEO of PCH, explained: “The alcohol industry is increasingly focused on the cannabis market, while those in cannabis are examining opportunities within the alcohol sector.”

Both Vaughn and Daniel Leeb, Saucey’s other co-founder, will assume leadership roles within PCH. Additionally, Blumberg Capital and Bullpen will hold substantial equity in the newly formed holding company, according to Vaughn.

“Over the past ten years, we’ve been at the forefront of providing solutions for evolving consumer purchasing habits within the beverage alcohol industry. We’ve observed a customer base that is more open to exploration than previously understood, willing to experiment with different formats, products, and categories. A consistent desire is for convenient discovery and purchasing, coupled with trust in their chosen platform,” Vaughn stated. “PCH’s strength lies in its ability to deliver unique and personalized shopping experiences across industries, supported by data that reveals consumer behavior related to cannabis, alcohol, tobacco, and consumer packaged goods. This, combined with PCH’s diversified infrastructure and our talented team, provides the flexibility and foundation to effectively serve the future of these industries.”

Saucey was founded in 2014 and currently serves 22 markets, including Los Angeles, San Francisco, San Diego, Sacramento, New York City, Chicago, Washington, Dallas, Orlando, Tampa, and Miami.

The company’s sales have grown by 200% year-over-year while maintaining profitability, as stated in a recent announcement. The alcohol delivery portion of the PCH business is demonstrably robust.

A survey of 1 million users (primarily in California, a leading cannabis consumer market in the U.S.) revealed that a significant 70% expressed interest in integrated delivery services for both marijuana and alcohol.

Emjay, established just a year ago, quickly secured distribution, cultivation, and production licenses. Created by Inception Companies, Emjay initially engaged Vaughn as an advisor. As the company expanded, investors and operators recognized the potential benefits of a strategic merger, Vaughn noted.

Through Emjay, PCH gains not only a distribution network but also a vertically integrated operation, enabling the delivery of cannabis products to consumers at a lower cost compared to competitors.

Vaughn and Leeb have been managing Emjay’s operations since January, increasing revenue from under $100,000 in transaction volume to current seven-figure sales. The company achieved profitability earlier this year and is now focused on expanding its reach within Saucey’s extensive California user base.

The cannabis industry experienced a surge of investment and interest following legalization in several states in 2014. However, many early leaders faced difficulties in 2019 due to regulatory challenges, competition from the illicit market, issues within the vaping sector, and a lack of professional management practices.

Omar Mangalji, a former Goldman Sachs banker and co-founder of Inception Companies (also known as Ronnie Bacardi), acknowledges these challenges.

“The broader cannabis market has faced difficulties due to weak fundamentals and ineffective management. However, similar to the disappointments experienced during the DotCom bubble, this industry is now entering a new phase – Cannabis 2.0,” Mangalji stated.

Following the merger, Saucey users can create an Emjay account using their existing credentials and easily switch between the two services with a single tap on an icon.