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The Spoon

Daily news and analysis about the food tech revolution

Cannabis Tech

Third-Party Delivery Service Waitr Buys Delivery Dudes for $23M

Third-party delivery service Waitr announced today it has entered into an agreement to buy Delray Beach, Florida-based company Delivery Dudes for $23 million. The stock-and-cash deal is expected to close before the end of next week.

Delivery Dudes’ digital ordering properties and phone number will remain operational. The company said the acquisition would help it to improve service for customers, which is available around the South Florida area.

What the deal brings for Waitr is a little less clear. Waitr, which operates in small- to medium-sized U.S. cities, is one of the only third-party delivery services that has so far achieved profitability. However, it holds just 1 percent of the market share for third-party delivery in the U.S., according to recent data from Second Measure. By comparison, DoorDash holds 56 percent, Uber Eats holds 20 percent, and Grubhub has 17 percent.

Delivery Dude’s service radius is unlikely to change those numbers much, since the company only operates in a small region within the U.S.

Potentially more advantageous for Waitr is its move in recent months to add more service types to its business. In some markets, Waitr now delivers alcoholic beverages directly from restaurants. Even more recently, the company struck a deal with a payment processing company called Flow Payments to create “a compliant marketplace, delivery, and payment solution” for cannabis dispensaries. 

Other third-party delivery services have also diversified their business models over the last year, with both DoorDash and Uber Eats offering grocery and DoorDash running its own “ghost convenience stores.” We’ve yet to see any of the major players peddling cannabis to customers doorsteps, though.

Whether Waitr will be successful at this remains unclear. The service operates largely in the South and Southeastern U.S., where cannabis and/or cannabis delivery is illegal in most states. There is currently no timeline for Waitr’s service in this particular vertical.

As far as its acquisition of Delivery Dudes goes, Waitr will be able to expand into new markets through it. Again, it would be a relatively small expansion, given that Delivery Dudes only serves part of Florida. But these may also be new areas in which Waitr can try out its diversified services, potentially building more profitability for the company in the future.

With New Investment from HeavenlyRx, Could Jones Soda Be a Leader in CBD Drinks?

Investors are on a high lately towards CBD. Now it seems that at least one CBD company is feeling pretty sweet towards one sugary beverage brand.

Late last week HeavenlyRx, a hemp-focused portfolio company of cannabis investment firm SOL Global Investments, spent $9 million to acquire 15 million shares of Seattle-based Jones Soda Co. The deal brought its ownership stake in the soda maker to 25 percent, which CNN reports could increase to 51 percent due to stipulations within the agreement.

Jones Soda revealed in a press release that it plans to use the new capital from the HeavenlyRx investment to expand its repertoire and develop new products, “including the potential commercialization of C.B.D.-infused beverages.” (Presumably using HeavenlyRx’s hemp extracts.)

We’ve seen plenty of beverage companies exploring CBD partnerships, from big players like Coca-Cola and Dirty Lemon to smaller upstarts like Sprig and Recess. We’ve also seen mega beverage companies invest in/partner with cannabis suppliers to begin developing a CBD-infused option — as with Cannabis Growth/Constellation Brands and HEXO/Molson Coors.

However, we have yet to see it the opposite way around: a cannabis company making a major investment in a beverage brand. Jones Soda is a logical choice for HeavenlyRx: it’s on the “edgier” side of sweetened carbonated beverages, using only natural cane sugar in their drinks and featuring black-and-white consumer-captured snapshots in their branding. Definitely the kind of soda you could imagine embracing a trendy ingredient like CBD. While public, Jones Soda is also not a mega-corporation like Coke or Pepsi, so they’ll ideally have to deal with less red tape when creating a CBD-infused product.

This is a significant move on the part of HeavenlyRx’s (or really its parent company, SOL Global Investments) to get ahead of the curve on the CBD soda trend. Right now the CBD-infused beverage space is relatively fractured, filled with smaller companies making niche products like adaptogen sparkling water and wellness “tonics”. But an industry leader has yet to emerge.

All that said, let’s not forget that selling CBD food and beverage is technically illegal right now (though that’s not stopping smaller players from adding it to everything from chocolates to coffee). The FDA held the first public hearing on CBD this past May which gave some hope that regulatory structure was on its way. However, not long after the NYC Health Department announced that it would begin seriously cracking down on all companies selling food & drink containing the controversial chemical compound.

CBD might not be approved by the FDA yet, but judging by experts’ projections, it’s only a matter of time. There’s certainly a lot of potential in the CBD edibles market: it’s projected to reach a value of $1.4 billion by 2024. With that much cash up for grabs, it follows that as soon as CBD gets the rubber stamp from the FDA there will be a mad scramble by beverage and cannabis companies to get a product to market and grab first-mover advantage.

Right now the field is wide open. With support from a heavy hitter like HeavenlyRx, Jones Soda has a chance to come out in front.

I Tried Willie Nelson’s CBD Coffee

I have a love-hate relationship with coffee. I can’t start my day without it, but by the end of my morning cup I’m often left feeling jittery and anxious.

A new coffee add-on promises to keep all the best part of your daily caffeine fix while doing away with the negative side effects. Cannabidiol (CBD), the non-hallucinogenic chemical in marijuana, has become the new “it” wellness ingredient. It’s also making a big splash into coffee: you can buy CBD coffee K-cups, add CBD sugar syrup to your latté at trendy coffee shops, and even track down cans of CBD-infused cold brew.

But those who like some celebrity with their cannabis-infused cup of joe, they can try the beans from Willie’s Remedy on for size. It’s the first product from Willie Nelson’s (yes, the Red Haired Stranger himself) CBD-centric company. The coffee beans launched in February of this year.

Each 8-ounce cup of Willie’s java contains 7mg of hemp-derived CBD. The coffee beans are covered in full spectrum hemp oil (read: CBD oil) just after roasting, which they absorb as they cure. According to Elizabeth Hogan, Willie’s Remedy’s VP of Brands, who spoke to me on the phone last week, this process allows the CBD oil to evenly distribute through the beans and fully extract into the final cup of coffee.

Obviously I had to try some. I brewed up a cup of Willie’s Remedy Columbian coffee the other day, right as my mid-afternoon work slump started to hit.

The end result tasted… like coffee. Not amazing coffee, but very passable, fairly good coffee. I thought I could detect a slight hint of grassy cannabis flavor on the tail end of my sip, but that could have just been because I was looking for it.

That’s actually the way I felt about most of my CBD coffee experience: I couldn’t tell if I was actually being affected, or if it was mostly placebo. I certainly felt the energy kick that comes with a strong cup of black coffee. But was I also more relaxed? Focused? Calm? I can’t really tell you.

There could be a lot of reasons why I felt so ambivalent towards my first sip of CBD coffee. Maybe I didn’t drink enough. CBD also affects everyone differently, so perhaps I just have a high tolerance for it. Or maybe Willie’s Remedy suffers from the same problems that a lot of CBD food and drink companies do: consistency — or lack thereof.

Assuming each serving of beans contains the exact amount of CBD advertised, you also have disparate brewing methods and water temperatures to deal with. Would CBD coffee made in a French Press have the same effect as that brewed in an industrial coffee pot or an aeropress? Details like this matter. CBD coffee is generally meant to be drunk during a work day; a pick-me-up without the jitters. While too much CBD won’t make you high, it could make you less than motivated for your 3 p.m. meeting.

All CBD products could benefit from some dosing oversight, which was one of the topics broached in the FDA’s public hearing on CBD last week. The FDA has yet to approve CBD as a food-safe ingredient, which means a) it’s technically illegal to sell food or drink containing CBD, and b) nobody is regulating CBD edibles (or drinkables). Companies like TraceTrust are trying to install a universal stamp to indicate that cannabis products contain the exact amount of THC or CBD that they advertise, but they’re still relatively small.

Until it’s approved by the FDA all we can do is trust that CBD-infused food and drink actually contain the dosages they claim. That’s where celebrity affiliations can really help differentiate products. Willie’s Remedy is smart to emphasize its namesake in its branding, knowing it will set it apart from the flood of CBD-infused beverages heading to market (which will get even more crowded after the FDA gives CBD the thumbs-up).

Soon enough I might be able to try my Willie’s Remedy coffee with Snoop Dogg non-dairy CBD creamer. Maybe then I’ll feel a stronger effect.

Ben & Jerry’s Will Introduce a CBD Ice Cream, Surprising No One

Half Baked. Phish Food. Willie Nelson’s Country Peach Cobbler.

Ben & Jerry’s may have made plenty of flavors that sound like they’re infused with cannabis, but so far they’ve steered clear of actually putting pot in their pints.

But all that’s about to change. Today the Unilever-owned company announced plans to release a line of CBD ice cream — as soon as the non-hallucinogenic cannabinoid is approved by the FDA.

They might not have too long to wait. The FDA is holding a public hearing on CBD tomorrow, with a public comment period through early July. While it’s unlikely we’ll see any real regulatory change for a few months at least, the hearing is still a significant step in the direction of approving CBD as a food-safe ingredient.

Once that happens there will be a cascade of CPG companies scrambling to release their own line of CBD-infused products. Coca-Cola, Molson Coors, and others have already announced that they’re experimenting with the trendy ingredient. Other companies have kept quiet, but with the CBD market estimated to reach $16 billion by 2025, they’d be foolish not to at least look into ways to use it.

For Ben & Jerry’s, a move into CBD makes sense. It may be owned by Unilever now, but the company was started by two hippies from Vermont who make no secret of their affection for the Devil’s Lettuce. The brand still gives off that granola-crunching, liberal-leaning attitude. Ben & Jerry’s has also been on the forefront of other product innovation, embracing growing demand for plant-based and low-calorie ice creams, so it’s not surprising that they’re ready to experiment with a new buzzy ingredient.

But nothing’s going to happen until the FDA gives the industry the green light. Until then, we’ll have to settle in and wait — preferably with a pint of Half Baked.

Cream? Sugar? Cannabis? Coffee’s Latest Trendy Add-On is CBD

There’s not a whole lot new that’s happened in coffee. Sure, Starbuck’s may debut a new kooky frappuccino flavor on the regular (s’mores?!). But in terms of actually changing coffee itself, not much new has come along since we all simultaneously discovered we loved cold brew.

Dave Briskie, President and CFO of wellness conglomerate Youngevity International (YGYI), thinks a new(ish) ingredient is promising to shake up the coffee game: CBD. Cannabidiol (CBD) is the non-hallucinogenic compound in cannabis which wellness influencers have been touting as the new miracle health supplement. It’s also been showing up in gummies, dog food, and a myriad of other food products.

Lately that a includes coffee, too. Maybe you’ve seen it as an add-on option in your local hipster coffee joint, or in a can of cold brew at a health store.

HempFX, a cannabidiol-focused subsidiary of YGYI, is about to release a cannabidiol-infused K-Cup. Each pod has 10mg of CBD isolate that’s water-soluble and, at least, according to Briskie, tasteless. Which is important since cannabidiol is naturally quite bitter. “At the end of the day it has to taste like coffee,” he told me. “I think we cracked the code on that.”

That’s a lot easier said than done. In fact, cannabidiol is notoriously tricky to add to beverages. In addition to its bitter taste, it’s also fat-soluble, so finding a way to add it to liquid is a challenge. That goes doubly when the CBD has to go from a sold (coffee grounds) to a liquid (brewed coffee). Even distribution is another hurdle. Companies want the CBD dosage to be as consistent and reliable as possible; ideally, your first sip of coffee has the exact same amount of cannabidiol as your last.

Briskie wouldn’t give away many details about their technology, but said that HempFX had found a way to make sure that all of CBD infused into the ground coffee ended up in the final cup of joe. This sort of transparency is especially important not only so the consumer knows exactly what they’re, well, consuming, but also for future FDA regulations.

As of now, CBD is not approved by the FDA as a food-safe additive, meaning it’s technically illegal to sell in food or beverage products. (Though the government body is having a hearing on the topic next month, so who knows?) HempFX is hoping to steer clear of any issues by avoiding the word CBD on any packaging. Instead, the company will go with the more FDA-friendly “hemp extract” when their coffee pods hit the market late in May. Hemp may still not be an FDA-approved food ingredient, but the term raises a lot fewer flags than straight-up “CBD.”

HempFX plans to initially sell online and then migrate into retailers. Briskie wouldn’t disclose exact pricing but told me it would be on the upper end of the coffee spectrum.

It may seem counter-intuitive to add CBD, a substance rumored to promote relaxation and anti-anxiety, with caffeine, which keeps us (or at least me) alert and running. But according to Briskie and others, CBD can temper the jittery, anxious effects of caffeine to leave you feeling focused and calm.

There isn’t any solid data to back this up, but that doesn’t mean the demand’s not there. Analysts at Canaccord Genuity project that the U.S. CBD beverage market will reach $260 million by 2022. At the same time, Americans are drinking more specialized coffee beverages (gourmet beans, cold brew, etc.) than ever before. It’s not a reach to predict that cannabinoid-infused specialty coffee will be a big trend, especially if CBD gains FDA approval and becomes fair game for Big Food companies like Coca-Cola and Starbuck’s.

HempFX is far from the only company adding CBD to their coffee beans or cold brew bottles. In addition to the ones listed here, there are several producers making CBD coffee pods, like Diamond CBD, Olala, and BrewBudz. Even Willie Nelson, the Red-Haired Stranger himself, has his own line of CBD coffee beans.

I haven’t tried cannabidiol in my coffee yet, but as someone who occasionally suffers from the jittery effects of over-caffeination, I’m definitely curious. Maybe eventually I’ll even be able to get CBD in my Starbuck’s S’mores Frappuccino.

Carl’s Jr. Will Test a CBD-Infused Cheeseburger on 4/20

Yesterday Carl’s Jr. got the internet all giddy when it announced it will sell a CBD-infused burger for one day, in one location.

The Rocky Mountain High: CheeseBurger Delight burger will be available on April 20 (duh), at one location in Denver, CO. The burger will come with pickled jalepeños, pepper jack cheese, and Carl’s Jr.’s famous Santa Fe sauce infused with CBD. Naturally, the burger will sell for $4.20, and according to the press release, will be available from 6 a.m. until supplies run out, which I suspect will happen long before closing time.

CBD — that is, cannabidiol, the non-hallucinogenic element in cannabis — is making its way into everything from beauty products to cold-brew coffee to jelly beans.

Advocates tout so-called “wellness,” like relaxation, as one of the benefits of CBD. As yet, however, there is limited research supporting any of these claims. Meanwhile, regulatory framework surrounding production and sale of CBD is still somewhat murky, though the FDA did release a statement at the beginning of April that said the agency was taking steps to regulating foods and drinks infused with CBD.

The burger will contain 5 milligrams of CBD, which some say is well below the 500 milligram amount that makes CBD “effective.”

In any case, I doubt many people will be buying Rocky Mountain High cheeseburgers for their wellness benefits, and Carl’s Jr. is not trying to promote any of them. But a CBD-infused sauce could be intriguing from a taste perspective, and if we take that view of things, Carl’s Jr.’s 4/20 plans make a lot of sense. Of late, the chain has shown great willingness to embrace new trends and ingredients in the food world. The company recently partnered with Beyond Meat to bring a plant-based “flexitarian burger” to its menu, and not long ago came up with a truffle-infused cheddar sauce that you’d typically expect to find in a fancy sit-down restaurant, not a quick-service chain.

“The new Rocky Mountain High: CheeseBurger Delight ties back to our core strategy of being the first to bring bold and unexpected flavors that are at the forefront of hot restaurant trends to a quick service menu,” Patty Trevino, Senior Vice President of Brand Marketing, said in the press release.

If the burger is a hit when it drops this weekend, and if regulators can craft a more solid framework around the buying and selling of CBD, Carl’s Jr. will be well positioned as a leader in using CBD as another ingredient with which to intrigue our palettes.

Seedo Ramps Up Manufacturing for Its Hydroponic Farm in a Box

Indoor farming company Seedo announced it will manufacture more than 1,800 of its indoor grow boxes in Q2 of 2019.

Seedo’s device is a self-contained, airtight box that looks like a mini-fridge and automates the process of growing herbs and vegetables hydroponically. The device pairs with a smartphone app that lets users choose a grow plan or create their own, control and modify the environment in the box, and receive notifications about plant health, harvest times, and any unexpected issues. You can also lock or unlock the fridge door with the app, a feature that seems handy for households with curious pets or small children.

The device will fit inside most homes, clocking in at 40 inches tall and 24.4 inches wide. It has space to grow up to five different plant types at one time. With the aid of the app, users can adjust environmental factors based on what’s being grown. For example, tomatoes require a lot of light and fairly dry conditions for ideal growing, so Seedo users can adjust the “weather” inside the box to get those conditions. Meanwhile, a patent-pending lighting system self-adjusts based on the growth stage of the plants.

Most interesting about Seedo is the types of plants the company says you can grow with the device. The website lists the usual herbs and lettuces most at-home vertical farms can grow, as well as some heartier options: strawberries, cherry tomatoes, bell peppers, and zucchini. You can also grow flowers, edible or otherwise.

The Israel-based company has also filed a new patent that will cover the AI and data analytic algorithms of its agricultural database. According to the press release, these algorithms are built to increase yield, improve nutrient delivery to the plants, and detect issues in real time.

Right now, you can pre-order a Seedo for $2,400. That cost includes the box itself, various filters (water, air), nutrients to get started, and access to the app (iOS and Android). Actual seeds are not included.

That’s considerably more expensive than some other options available for purchase or pre-order: the Herbert farm by Ponix systems is selling for around $553 USD. SproutsIO, which is expected to ship in Q3 of 2019, is going for $799. And the Farmstand, courtesy of Zooey Deschanel’s new startup Lettuce Grow, ranges from $399 to $469 for the farm itself and $49 to $69 for a monthly subscription that includes seeds.

Seedo’s customer base is currently made up of at-home growers and some commercial partners. The company recently announced a partnership with Kibbutz Dan, with whom it will create a fully automated, commercial-scale cannabis farm in Israel. Previously, Seedo had established a medical cannabis farm in Moshav Brosh, Israel. Seedo raised a $4 million post-IPO equity round in April.

Seedo expects to start shipping machines in August 2019. It’s currently available for pre-order in North America, Europe, Australia, New Zealand, and Israel.

FDA Makes First Step Towards Regulating CBD-Infused Food and Drink

You just got one step closer to being able to legally purchase CBD-infused chocolates, sugar, beer and more.

Today the Food & Drug Administration (FDA) released a statement announcing a new action plan to jumpstart regulations for “the lawful marketing of appropriate cannabis and cannabis-derived products.” Basically, the FDA is taking initial steps towards regulating foods and drinks infused with CBD, the non-hallucinogenic compound in cannabis.

According to the statement, the FDA will create an internal agency to explore pathways to legalization for CBD as a dietary supplement or food ingredient. It will also host a public hearing on the topic on May 31.

This is kind of a big deal. In December of 2018, Congress passed the Farm Bill, which removed hemp-derived CBD from the Controlled Substances Act and made it legal for sale. However, since the FDA hasn’t yet approved CBD as food safe, it’s technically still illegal to sell food or drink products containing the substance.

Companies were selling CBD-infused edibles anyway, with little to no consequences. That is, until New York City, Maine, and Ohio cracked down on purveyors earlier this year. For a while it seemed like the FDA was going to really hard-line CBD regulation.

But with this new agenda, the FDA seems to be taking a step back and genuinely seeking a clear pathway to create a regulatory framework for CBD-infused foods. The forthcoming hearing is an important first step. It will not only legitimize CBD as a food ingredient, not a drug. It will also get the ball rolling and start the process for legally regulating CBD as a food and drink additive.

However, the agency also took pains to point out they will not tolerate the sale of CBD as a health product. The statement noted that the FDA has issued “multiple warning letters” to companies marketing CBD products “with egregious and unfounded claims that are aimed at vulnerable populations.” Those include claims that cannabidiol could cure cancer or reverse Alzheimer’s. This strict stance could make things tricky for product developers, as CBD has become something of a darling for the wellness community, who treats it as the next miracle natural ingredient, like turmeric or charcoal. Clearly edibles companies are going to have to be very cautious about what they claim their products can do.

FDA Commissioner Scott Gottlieb is stepping down this month, so it makes sense he’s trying to get a regulatory framework for CBD in place before he leaves. Of course, regulatory processes have a lot of red tape and move notoriously slowly, so it’ll probably be a while before CBD actually gets the FDA stamp of approval.

But with this new agenda, the FDA is at least taking the first step towards catching up with public opinion when it comes to CBD. If they do eventually approve CBD as a food-safe ingredient — and I don’t see why they wouldn’t — we’ll likely see Big Food companies like Starbucks and Coca-Cola rolling out CBD-infused products of their own. In fact, they’re probably already working on them.

One final note: It’s sort of ironic that we’ve had several public hearings on cultured meat — a relatively new technology that’s not even to market yet — before we had one on CBD, a substance that’s relatively widely available and has a market that’s projected to hit $22 billion by 2022. Maybe it’s because CBD is still stigmatized as a “drug.” Regardless, once it gets FDA approval the CBD market will explode. And now that “when” is looking sooner than ever.

Jelly Belly Creator Launches (and Sells Out of) CBD-Infused Jelly Beans

Ever since I blindly got a vomit-flavored jelly bean from the Bertie Bott’s Every Flavor Beans box, I’ve been pretty wary of the candy.

But that might be about to change. The creator of Jelly Belly, David Klein, has launched a line of jelly beans infused with cannabidiol (CBD), the non-hallucinogenic compound in cannabis (h/t USA Today). The beans come in 38 flavors including many Jelly Belly-inspired favorites, like my personal ride-or-die roasted marshmallow. There are also sour and sugar-free options, and each bean has 10 mg of CBD.

Kelin’s company, Spectrum Confections, sells the jellies in bulk: each order includes a whopping 800 beans, so it’s probably not for the casual candy or CBD lover, unless you’re stocking up for a 4/20-slash-Easter party for the books.

Even if you are, you’re out of luck. All beans are already out of stock, but Spectrum Confections notes on their website that they are still taking orders over phone and email.

Putting CBD into jelly beans is a pretty sweet idea (sorry). Demand for the non-hallucinogenic cannabinoid, which some herald for its healing and relaxation properties, is high.

However, CBD’s rise is somewhat hampered by the fact that the FDA still considers it to be an illegal food ingredient, meaning it’s technically not allowed to be sold in food or drinks. That hasn’t stopped companies from making and selling everything from CBD-infused chocolates to sodas. However, recently New York City health inspectors cracked down on local shops selling food products with cannabidiol, so really it’s just unclear what exactly is allowed and what’s not in the CBD edibles space.

Clearly that lack of clarity isn’t stopping Klein, or his jelly bean-loving customers.

Analyst: Starbucks Could be the First Major Chain to Launch CBD-Infused Drinks (Eventually)

Cannabidiol (CBD) — the non-hallucinogenic ingredient in cannabis meant to promote relaxation — could be headed to your neighborhood Starbucks.

Well, eventually. This week financial services company Cowen released a report predicting the CBD market could be worth $16 billion by 2025. More interestingly, it hinted that Starbuck’s could be one of the first major chains to offer cannabidiol-infused drinks.

In the report, Cowen analyst Andrew Charles noted that Starbuck’s probably wouldn’t adopt CBD in the “near term,” which makes sense since no major chain will put it on their menu until the FDA gives its stamp of approval. However, he went on to write that, should the regulation of CBD change, “we could envision Starbucks ultimately piloting the ingredient.”

That’s pretty theoretical language. Starbuck’s hasn’t made any indication that it’s actually exploring cannabis-infused beverages. In an interview with CNBC, Starbucks CEO Kevin Johnson stated that Starbucks was aware of the edible/drinkable cannabis trend, though it didn’t have any immediate plans to pilot any drinks with THC or CBD.

It seems like the Cowen report called out Starbuck’s less because of any concrete hint from the company and more to illustrate a future in which CBD is so mainstream, it’s available somewhere as ubiquitous as Starbuck’s.

However, it will likely be a while yet before that’s the case. Though CBD-infused beverages have been popping up at local coffee shops and bodegas for some time, the chemical hasn’t been approved as “food-safe” by the FDA (despite its becoming legal with the passage of the Farm Bill in 2018).

Up until recently most CBD edibles sellers have been operating under the radar with little to no consequences. However, last month New York City health inspectors cracked down and put a citywide embargo on selling food or drink infused with CBD. The ban was recently delayed until this summer.

The FDA likely won’t approve CBD as food-safe by then, and some see the NYC crackdown as a bellwether for more restrictions on the sale of cannabidiol-infused food and drinks. But that doesn’t negate the fact that demand for the non-hallucinogenic ingredient is on the rise, thanks in part to celebrity endorsements and the recent “wellness” movement.

We’ve written before that despite all the buzz surrounding CBD beverages, it’ll likely be a while before it’s ready for the mainstream.

“High” Tech: CBD Can Be Made with Genetically Engineered Microbes (AKA Yeast)

When you think of what yeast can do, your mind probably goes to bread or beer. But in a paper published today in Nature, scientists from UC Berkeley announced that they had successfully created the chemical compounds in marijuana — both THC and CBD — from bioengineered microscopic fungi. AKA yeast. (H/t Quartz.)

To do this, the team of scientists extracted THC and CBD genes from cannabis, then implanted them in yeast (specifically Saccharomyces cerevisiae, the same yeast used to brew beer and wine). When the yeast is put into a liquid solution with the sugar galactose and other nutrients it outputs the chemical compounds in marijuana.

Basically, scientists can now grow cannabidiol (CBD) in a lab.

There are a few benefits to this. According to Quartz, producing THC and CBD via genetically engineered yeast is cheaper than extracting the chemicals from hemp or cannabis plants (over 99 percent cheaper, in fact). That means that companies purchasing these chemical compounds to make, say, CBD-infused soda, can pass those savings onto consumers. While CBD products aren’t astronomically expensive right now — a twelve-pack of that CBD soda will set you back fifty bucks — but if they want to reach a larger audience, a cheaper price tag can’t hurt.

Secondly, using this technology scientists can create new cannabinoids, ones that could be tweaked to have specific effects (e.g., high levels of relaxation). Finally, creating THC and CBD in a lab could reduce the surprisingly high environmental footprint of cannabis crop cultivation, both indoors and outdoors. However, as with cultured meat, there is a counter-argument that keeping the lab running requires a level of energy tantamount to just producing the crop the old fashioned way.

Bioengineered yeast is opening doors for scientists to grow all sorts of food ingredients in labs. Perfect Day is using yeast to produce dairy-free milk. Impossible Foods uses genetically engineered yeast to make heme, the molecule that makes their burgers ‘bloody.’ And earlier this week, new company Motif Ingredients launched (with a cool $90 million in funding) to use yeast to create proteins to replace animal products.

This innovation is coming along at an exciting time for CBD. After the passage of the Farm Bill in late 2018 made hemp-derived CBD legal in the U.S., analysts (ourselves included) began predicting that 2019 would be the year of CBD. It’s unclear if CBD derived from genetically engineered yeast — as opposed to hemp — will be legal, and regulators probably won’t tackle that can of worms for a while.

This news got me thinking. I wonder if we’ll see major cannabis and hemp companies pushing back against CBD made in a lab, much as we’ve seen big meat producers take issue with cell-based meat calling itself “meat.”

More immediately, this sort of research could help shed more light on the properties of CBD and maybe even accelerate the process for the FDA to decide if cannabidiol is a food-safe ingredient.

Prima Raises $3.3M to Educate Consumers, Regulators about The Benefits of CBD

Yesterday prima, a wellness brand championing the use of CBD, announced it had closed a seed round of $3.3 million. The round was led by Lerer Hippeau, with participation from Greycroft and other undisclosed investors.

As of now, the website is just an email signup form to request early access to the site. The Santa Monica, CA-based prima plans to launch an education platform to share data and research about CBD and, eventually, sell CBD-infused products. (If you’re not familiar, CBD is short for “cannabidiol,” the non-hallucinogenic chemical compound in cannabis.)

According to Techcrunch, prima will initially peddle beauty and pain-management products. This entry point makes sense. One of prima’s founders, Christopher Gavigan, previously co-founded The Honest Company, a wellness brand which sells nontoxic beauty and household products. Besides beauty products, down the road, prima will add edible products to its lineup, including powders that can be added to everything from coffee to water. Each blend will have a different intended effect, such as sleep, energy, or immunity.

It’s a tumultuous time in the CBD market. The passage of the Farm Bill in late 2018 legalized sales of hemp-derived CBD, but the FDA has yet to approve CBD as GRAS (Generally Recognized As Safe). In other words, it’s not exactly legal to sell food products infused with CBD.

Up until recently, however, regulators seemed to have been turning a blind eye to companies selling things like CBD-infused gummies or skin serums. But the tides may be changing. Just this week, the New York City Health Department issued a ban on CBD in food and beverage items and cracked down on local NYC establishments selling CBD-infused products.

That’s where the platform aspect of prima could really do some good. According to a press release from the company, prima wants to help lead the global transformation from “fear-based cannabis prohibition into a hemp industry fueled by facts, market data, medical research, customer-patient experiences, and evolving legislative solutions.” Essentially, prima want to help de-stigmatize CBD and re-label it as a wellness ingredient, not an intoxicant.

Though they don’t provide any details on how they plan to achieve this mission, there’s one reason that Gavigan can help move the needle on CBD acceptance for one reason: his resume. Gavigan’s past experience at the Honest Company — which built its brand on transparency and ethical, non-toxic products — could give prima a boost not only in terms of media buzz, but also consumer trust. True, his co-founder was Jessica Alba, who did a lot of heavy lifting to give Honest Company its status, but just being associated with the brand will work in Gavigan’s (and prima’s) favor.

On the regulatory side, Gavigan told Fortune that the startup also plans to work with the FDA to push CBD products labeled as a nutritional supplement — though again, he didn’t give any details.

We predicted that 2019 would be a big year for CBD. In fact, over the next three years, the CBD market is expected to grow to as much as $22 billion. However, continued regulatory hurdles and health department crackdowns would put a serious damper on what has the potential to be the next big wellness ingredient. Hopefully prima will be able to use its pedigree to destigmatize CBD for consumers — and maybe even get the FDA to play ball.