Since founding Auntie Dolores’ edibles company in Oakland nearly a decade ago, Julianna Carella has seen many changes in California’s medical marijuana sector, particularly in infused products.
She says California has made great strides in nine years – “the labs didn’t know how to test edibles” – but more must be done.
Indeed, the sophistication with which edibles companies manufacture their products has increased exponentially in the past few years, with companies like Auntie Dolores complementing tried-and-true recipes with high-tech testing and expensive equipment to ensure their products are accurately and evenly dosed.
But not all edibles businesses have achieved such a level of sophistication, and many will undoubtedly fail to meet the challenges tied to new regulations and an increasingly competitive landscape as the state prepares for a recreational cannabis sector.
Carella – whose infused products include such goods as pretzels, caramel corn, brownie bites and cheese biscuits – spoke with Marijuana Business Daily about California’s new regulations and the state’s increasingly competitive edibles market.
How is the rollout and upcoming launch of California’s recreational program affecting businesses there?
If you’re a producer in this space you have to have one ear on all the politics at all times because they’re changing pretty rapidly.
We’re trying to figure out what that means and where there need to be changes.
Will you try to appeal to both medical and recreational consumers, or continue to focus on medical?
We’re definitely interested in entering the adult-use market.
I think our product line is very well-suited for that market, specifically because a lot of cannabis enthusiasts that don’t have a high tolerance … are the folks that really appreciate our product. Because they’re able to titrate their dosage more effectively just by consuming one or two pieces in a canister.
I think our product line will do really well in the recreational market, and we’ll keep all our products available for medical patients as well.
Will you create new products for adult use, or will you simply make your current products available to the rec market? And if so, will that require some kind of rebranding?
I think we’re probably looking to condense our menu regardless.
We might offer different potencies in the rec market than the medical market, but we’re really looking to narrow down our menu in general and then we’ll have to change our packaging slightly.
We’ve been anticipating these changes for the last three years. When we changed our packaging to canisters a couple years ago, that was with the full intention of switching over to pill bottles at some point.
So we’ll be able to have completely childproof packages for our products in the next couple months.
What are some of the biggest changes you’ve seen since you first got into the business in 2008?
The biggest change – which has been really positive – is just the stigma around cannabis seems to be deteriorating, finally, and I think people have really come around to the idea that this truly is medicine. It’s not just a recreational drug.
And the fact that this industry is creating millions of more jobs, which our country desperately needs right now.
I think (those are both) positive.
I think CBD and the awareness around CBD has really moved the needle more than anything because I think it gave people the idea that OK, here’s something that doesn’t get you high and has incredible medical value – let’s look at this closer.
I think that alone has really changed things, even in the THC market.
Is there room for new entrants in California’s edibles market or is too hard to get into at this point?
It’s a very saturated market.
Some of the products that sell the best are the very, very high-potency products that have very low quality. But that’s not the market we want to compete in.
Trying to make a product that has a decent margin in a landscape like what exists right now in the California medical market is a very difficult thing to do.
Do you think many edibles makers will have a hard time meeting new regulations and shut down?
Unfortunately, it might not even be a matter of their qualifications … it might be simply a matter of the nature of their product.
For instance, there’s folks that are making fantastic edible products that might be perishable, but (regulators) just decided that none of those products will be allowed. So cheesemakers, or people that are making drinks that might be perishable, or ice cream or any of those types of items are basically nixed from the equation.
I think there’s going to be a lot of companies that will have a hard time complying.
We may not know the finality of (the state’s new rules) for even a few more months. So that gives us not a lot of time to adapt our product lines to comply with those regulations.
It’s an exercise in being able to change as needed and then sort of adapt your product to fit into those regulations and adapt to the processes that will help your company comply.
This interview has been edited for length and clarity.
Omar Sacirbey can be reached at [email protected]