By John Schroyer
New regulations on edibles in Colorado’s recreational marijuana market have created operational hurdles – and tens of thousands of dollars in added expenses – for infused products companies.
The regulations, which went into effect Feb. 1, include THC limits of 100 milligrams per container or package. They also require manufacturers to ensure edibles can be broken up into 10 milligram sections – each stamped with the THC content – or provide individually wrapped doses. In addition, there are new packaging, labeling and testing requirements.
Though the rules were promulgated and made public last October, that hasn’t made the pain of adjusting any easier for many edibles manufacturers.
“It’s been a tremendous amount of money for the infrastructure to put in place,” said Jaime Lewis, the CEO of the infused products company Mountain Medicine. “We obviously had to buy new equipment, new packaging, and the attorneys’ fees to make sure we remained compliant. (Mountain Medicine) probably dropped close to about $45,000 on the project.”
That included $20,000 for new kitchen machinery and around $25,000 for new packaging, Lewis estimated.
“We have to change the way we mold our candies, for sure,” Lewis said. “And that doesn’t include the overtime I’ll be paying next week to make sure we have product on the shelves.”
Julie Dooley, the president of Julie’s Natural Edibles, estimated that prices for recreational edibles in Colorado will likely rise by around 10%, just because that’s how much it will cost companies to comply with the updated rules.
Consumers with a higher tolerance for cannabis also might have to buy more edibles now to get the desired buzz.
“Ten milligrams is not a lot for many consumers. They want more,” Dooley said. “To just buy something that costs $7 – and you’re going to need two of them – (the cost starts) adding up.”
The retail price of edibles in the medical marijuana will stay fairly low, she said – which means the gap between MMJ and rec prices is widening.
Dooley said her company produces a 75 milligram infused granola bar that usually retails for less than $10 in medical dispensaries, but the same product with only 50 milligrams in rec stores sells for $16.
One major cost for Dooley’s company is the new labeling requirements that include nutrition information.
Dooley said her business typically produces about 1,200 edibles units a week, and she said the cost for a label for each of those has jumped from 7 cents to 42 cents. That’s a monthly production cost increase of more than $1,600.
Granted, Dooley takes some of the responsibility for that, because she feels there’s important information to include on her labels that isn’t mandated by the regulations.
“If I had just put on the nutrition fact panel, I would have had to remove everything except for the mandated regulations, and those regulations…don’t talk about what happens if you over-ingest, but my label does,” Dooley said.
Dooley is also probably going to lose a couple weeks’ worth of business, she said, because an 11th-hour clarification from the state forced her to order new labels. The soonest her provider can get her the updated labels is probably going to be mid-month.
Since the new rules went into effect Feb. 1, she’ll have employees sitting around twiddling their thumbs until then. That loss of business is probably going to cost her another $10,000 to $20,000, Dooley estimated.
Then there’s the testing requirement.
EdiPure, one of the larger edibles manufacturers in Colorado, now spends around $1,000 a day fulfilling rec testing requirements, said managing partner Dan Anglin.
Anglin also has had to spend countless hours working as a middle man between retailers and the state’s Marijuana Enforcement Division (MED) in his dual role with EdiPure and as the chairman of the Colorado Cannabis Chamber of Commerce.
“We’ve had so many stores contact us and say, ‘Well, we read the rules and it looks like your packaging is not compliant.’ Or, ‘We had an MED agent in the store who told us that your packaging would not be compliant come Feb. 1.’ And that’s not true,” Anglin said.
Anglin, who is also a co-owner of a rec shop in the mountain town of Blackhawk, said he even had MED inspectors recently come into his shop and tell his employees – incorrectly – that two of the most popular edibles brands’ packaging were going to be out of compliance come Feb. 1.
The inspectors, he said, didn’t understand that it was legal under the MED’s new rules to have more than a single 10 milligram dose of an infused edible in one package, as long as they were marked and could be broken up into 10 milligram servings.
MED spokeswoman Natriece Bryant said some of the misunderstandings were based on a sentence in the rules that has been clarified already, and she said the MED is “dedicated to working directly with the industry” to ensure that companies remain compliant with the law.
John Schroyer can be reached at johns@mjbizmedia.com
