Shaking up your cannabis-infused product line is one way to appeal to new consumers and excite loyal brand enthusiasts. But where do you start?
Consistently dosed, cannabis-infused food and beverage products with inventive flavor profiles will continue to win with consumers, manufacturers agree.
But leveraging emerging science and technology—and tracking trends in the mainstream food and beverage industries—will likely generate innovative products that draw more new consumers to the cannabis sector. More customers, in turn, will lead to greater sales and profits, and allow infused product manufacturers to stay ahead of rivals.
Infused manufacturers and industry experts predict the following products and trends will become more widespread among edibles, beverages, tinctures and other infused offerings:
- Ingestible products that allow consumers to more rapidly absorb THC and CBD and experience the effects of both substances.
- Water-soluble, mix-and-serve beverage powders.
- Targeted marketing for products that meet consumers’ needs, such as pain relief or relaxation.
- More cannabis companies creating and distributing hemp-derived CBD products nationwide.
- A wider variety of THC and CBD doses that aim to deliver a particular effect, such as “calm,” and stray from typical 2.5-, 5- and 10-milligram serving sizes.
- A greater emphasis on natural and/or organic ingredients.
What follows is a detailed look at the current landscape and business opportunities in the ingestible infused products sector and the trends that will shape the future of this growing category.
Need for Speed
Bioavailability is a buzzword in the ingestible cannabis-infused product sector. Products with higher bioavailability are more rapidly absorbed into the body’s circulatory system—and infused product manufacturers see mass-market appeal in goods that provide desired effects faster.
New product development should emphasize bioavailability and leverage nanotechnology or innovations in food science, according to industry executives. Those products will appeal to a wider group of consumers.
Oil-based ingestible products, including chocolate and hard candy, are lipids that must pass through the liver, where enzymes break down before eventually entering the bloodstream, said Ezra Malmuth, founder of Atlas Edibles, a Berkeley, California-based ingestible product manufacturer.
That can mean it takes 40-120 minutes for a consumer to feel their effects, he noted.
Alternatively, when the oil is micro-encapsulated into an aqueous nanosuspension—and therefore is water soluble—it is more easily absorbed through the intestinal lining, creating a faster path to the bloodstream, Malmuth said.
In other words, its effects are felt much faster than the typical time required for standard oil-based edibles, he noted.
New products—including sublingual tablets, orally dissolving strips, beverages and beverage mixes—are designed to be absorbed through mucous membranes or the intestinal lining. That can cut uptake time in half.
“If you’re manufacturing a stress-management product, consumers expect relief when they need it, not two hours from now,” said Ryan Crane, founder of Tukan, a Chicago-based maker of hemp-derived CBD beverages. “More absorption and quicker onset time is so important.”
Crane estimates consumers can feel the effects of Tukan’s beverages in 15-30 minutes.
Steven Addis, co-founder of Sum Microdose, a Boulder, Colorado-based maker of sublingual tablets, said his company’s pressed, micro-powder tablets dissolve under the tongue in less than a minute, and cannabinoids are introduced to a consumer’s circulatory system in as quickly as 10 minutes.
Likewise, Malmuth said the effects from Atlas’ flavored beverage mixes can be felt within 15-30 minutes.
Greater bioavailability and more rapid onset mean consumers are more likely to have a better experience.
“Faster effects mean consumers are less likely to overindulge in the time between consumption and sensation—and are more likely to achieve the desired effects,” Malmuth said.
Marketing Moods, Not Strains
Cannabis-infused products are typically branded as made from indica, sativa or hybrid strains. Those words resonate less with new and older cannabis consumers, or consumers who want functional products designed to aid with sleep or pain relief.
That’s important considering that ingestible products are more popular with Gen Xers, baby boomers and the silent generation, according to data provided by Headset, a Seattle-based data-analytics company that focuses on the cannabis industry. (See chart “Category Market Share by Generation.”)
So, rather than advertising products as coming from sativa or indica strains, consider naming products after the feelings or moods they are created to replicate.
Examples include Energy and Relief sublingual tablets from Sum Microdose, as well as Recover and Focus hemp-derived CBD beverages from Tukan.
“These targeted products for athletes, or work, or daytime or social experiences, that’s where the market is headed,” Tukan’s Crane said.
Products that market moods appeal to new consumers and, through branding, increase adoption of cannabis, said Addis at Sum Microdose.
There’s also a growing number of consumers interested in using cannabis as part of their everyday wellness routine, Addis noted, and he predicts more marijuana retailers will showcase products designed for wellness in separate displays.
It’s important, however, for manufacturers and retailers to avoid making medical claims or overpromising effects in their marketing, Crane noted. Medical claims risk running afoul of the U.S. Food and Drug Administration.
Instead, lean on marketing the known benefits of a product’s herbal ingredients. Tukan’s Recover product, for example, includes turmeric, which is an antioxidant that has anti-inflammatory effects.
“The more you target a mood state, the more likely you are to engage consumers in what it is they can expect from your product,” said Tim Moxey, founder of Botanica Seattle, parent company to multistate brand Mr. Moxey’s Mints.
Beverage Mixes a Viable Option
Global liquor and beverage giants have bet big on cannabis-infused drinks, despite the fact they account for only about 1% of legal recreational marijuana sales, according to industry data. While infused beverages aren’t chipping away at sales of flower or concentrates, they do have potential for mass-market appeal, making it an attractive new product category for manufacturers to explore.
In general, however, there’s a prohibitive capital outlay for the equipment and technology needed to play in the beverage sector—particularly for manufacturers that bottle or can beverages in-house. Beverage products can also be less shelf-stable because high temperatures can degrade cannabinoids.
There are additional challenges throughout the supply chain, including the heavy weight and bulky size of beverage shipments for distribution, and the fact that some cannabis-infused beverages should be refrigerated throughout their life cycles to maintain exceptional quality.
Infused product manufacturers can circumvent those obstacles with mix-and-serve beverage powders that—with fewer challenges in manufacturing, distribution and sales—can capture market share in a red-hot product category.
Atlas Edibles, for example, worked with chemists with decades of biotechnology experience who used an encapsulation formula to create a line of flavored water-soluble beverage mixes that dissolve in liquid.
Water-soluble beverage mixes have high bioavailability, which makes them as attractive as their liquid counterparts. Because they come in packets, they are more compact than cans and bottles and, therefore, easier to transport and store. Also, the products don’t have to be refrigerated, which extends their shelf life and means dispensaries don’t need special infrastructure such as refrigerators to stock them, said Malmuth at Atlas.
Betting on Hemp-Derived CBD Products
There is an increase in the number of CBD-only ingestible products or ingestibles that have higher CBD-to-THC ratios, said Liz Connors, Headset’s director of analytics.
Those products tend to be sold at a higher price point, making them an attractive play and a good strategy for growth.
Some brands also are capitalizing on the 2018 Farm Bill, which removed hemp from the Controlled Substances Act and legalized cannabis plants up to 0.3% THC.
That, in turn, has prompted some infused product manufacturers to start selling hemp-derived CBD creams, beverages and edibles through e-commerce platforms, despite some legal uncertainty surrounding online sales. Some manufacturers are shipping those products across state lines and internationally, giving them an ability to expand their brands’ footprints without using contract manufacturing agreements. While this is a strategy for growth and gives companies the ability to generate new revenue, experts cautioned it is important to consult with a lawyer before proceeding.
Examples include Mr. Moxey’s Mints, which ships its CBD-only mints to the United Kingdom and much of the United States. Tukan, meanwhile, ships its CBD beverages to 40 states.
Tukan’s Crane said companies that ship CBD products across state lines should closely monitor regulations that could put them at risk of breaking an individual state’s rules.
“We have an obligation to be responsible actors,” Crane said. “We’re seeing so many changes at state levels, and our goal is to be responsible within the guidelines and not put our customers in an uncomfortable position.”
Dialing in the Dosing
Microdose ingestibles frequently top the lists of best-selling products.
Now, manufacturers of microdose products are expanding their product suites to focus on precise doses designed to replicate a desired effect.
To appeal to a wider variety of customers, industry executives said infused manufacturers should offer a product suite that includes maximum-and low-dose goods.
“Microdosing is probably the most important thing that has happened in edibles,” said Mindy Segal, a James Beard Foundation Award-winning chef who created Mindy’s Artisan Edibles and Mindy’s Kitchen-branded ingestibles for Cresco Labs, a vertically integrated multistate cannabis operator based in Chicago. “It’s approachable and a good introduction to edibles. It’s a whole new way for adults who like consuming recreationally.”
Rather than standard doses of 2.5, 5 and 10 milligrams, manufacturers are marketing products that have varied doses of THC and CBD.
Sum Microdose, for example, has a product branded Calm with 3.6 milligrams of CBD and 1.4 milligrams of THC.
That’s the ratio Sum’s product developers found most ideal for that formulation, Addis said.
“We define microdose as more than just low dose,” Addis at Sum Microdose said. “To have an effective microdose, you have to have the right ratios of cannabinoids and very, very high uptake.”
Natural Ingredients and Ethical Supply Chains
Studies of traditional food and beverage consumers show a growing number want more information about the foods they eat.
They’re particularly interested in products that have organic or natural ingredients that are locally or ethically sourced, sometimes through direct-trade agreements with farmers.
That’s in line with a trend that’s tracking in cannabis-infused products, which means manufacturers should include more natural ingredients in their products, when possible, and market them as such.
More cannabis consumers want “wholesome, nutritionally dense” ingestible products, Malmuth at Atlas Edibles said.
Malmuth, who studied culinary nutrition at Johnson & Wales University, monitors traditional food and beverage trends and applies what he sees to Atlas’ product development.
For its granola clusters, Atlas uses oats, almonds, poppy seeds, wild blueberries and apricots. It also purchases wholesale spice blends from Oakland, California-based Oaktown spice shop for use in the company’s clusters and beverage mixes.
“Atlas is a food company first,” Malmuth said. “We track food trends and innovation in the traditional food industry, and those are big motivators for us and influential factors in what we create.”
Mr. Moxey’s Mints uses herbs—ginseng, gingko, echinacea and chamomile among them—to craft its signature microdose mints. That’s key to the Mr. Moxey’s brand, which promotes herbal wellness, said Moxey of parent company Botanica Seattle.
Crane at Tukan set out to create a product that “works with the body’s natural rhythms.”
For Tukan, Crane skipped using caffeine additives and instead chose rooibos, green tea, turmeric and ginger to create Tukan’s 2.5-ounce “wellness shots.”
“Some of the best functional elements come from natural ingredients,” Crane said. “The market is maturing and consumers are getting smarter. They want functional products. They want products that serve certain purposes, so let’s help them get there.”