Close Ad

The Spoon

Daily news and analysis about the food tech revolution

cannabis

Azuca Puts CBD Into Sugar So You Can Put It In Coffee (or Literally Anything)

While walking the Fancy Food Show floor this week, I was curious to see how many companies would use one of the trendiest products of 2019: cannabidiol (better known as CBD). While the number was surprisingly few (no more than three or four), I did see a few companies incorporating CBD into things like tea and chocolates.

Azuca wasn’t exhibiting at the show, but the startup was certainly there to make a splash. Started two years ago by Ron Silver, a chef at NYC’s Bubby’s restaurants, the company turns CBD (and THC) into water-soluble dry flakes that can be easily incorporated into any sort of food or drink product. They do this through a process called “dehydrofractalization,” (DHF for short), which allows them to put oil-based CBD molecules into water.

“Fundamentally, our products are a technology,” Jonathan Teeters, General Manager of Azuca’s CBD Division told me. In fact, they have three patents pending on their CBD technology.

This tech gives Azuca a few benefits. First of all, it allows them to infuse CBD into a wider range of products. Traditionally, THC and CBD (which are fat-soluble molecules) had to be dissolved into oil, which limited the ways they could be consumed. By making the molecules water-soluble, they can go into pretty much any food or drink item imaginable.

Secondly, Azuca’s products take effect much more quickly than edibles of the past: usually within 15 minutes, as opposed to several hours. And lastly, Teeters told me that their products are consistent and easy to dose (each serving contains 25 milligrams of CBD).

So far, Azuca has several CBD-infused products on the market: chocolate discs, granulated sugar, and sugar and stevia syrup. The company’s decision to put CBD in sugar/sugar syrup is interesting. It makes it super easy to add a hit of CBD to any sort of baked good or beverage, without worrying about dissolving it into baking oil (which is how edibles have been traditionally made in the past).

Azuca sells their sugar products wholesale to other edibles companies and direct to consumer online, but is also working with coffee shops who offer the CBD syrup as an add-on to everything from lattes to mochas. You might wonder why people want a hit of calming cannabidiol with their morning jolt, but it’s actually quite popular — I’ve even seen it in a few coffee shops in Seattle.

The products retail for roughly $5 per serving. That’s certainly more expensive than straight-up CBD tinctures, or other chocolates on the market. But according to Teeters, “you’re paying more for taste and tech.”

With so many new competitors in the market, taste and technology are the two main ways that brands can differentiate themselves. Azuca isn’t the only company making water-soluble CBD meant to give people a high-end edible experience — far from it. Companies like Tarukino and Stillwater have also developed technology to put both THC and CBD into everything from teas to wines to chocolates.

There’s still the teeny, tiny issue that CBD isn’t approved as a food ingredient by the FDA. But that hasn’t stopped dozens and dozens of companies from producing and shipping cannabidiol-infused products around the country. Teeters says that Azuca is just trying to stay as compliant as possible, though they have clearly taken a few steps to not rock the boat: for example, their labels read “hemp extract” instead of CBD. While technically true (as long as they use hemp-derived CBD), it could also be slightly confusing for those not in the know. But it all just goes to show how tricky it is to navigate the murky waters of CBD as edibles. Eventually, Teeters guessed the FDA might label CBD a supplement and regulate it as such.

Until then, he’s pushing to get the word out about Azuca’s CBD products and make them as consistent, reliable, and accessible as possible. “If it’s not accessible, it’s easy to take away,” he told me.

So far, Azuca has raised a seed round for $1 million. They gave me a bottle of CBD-infused simple syrup to try out, which I haven’t cracked open (yet). But maybe I’ll put a few drops in my morning coffee.

Interested in the fast-growing CBD edibles market? Join us TODAY from 10:30-11:30am PST for a Slack Chat (think Slack AMA) about all things CBD. Sign up here!

Introducing The Spoon Slack Chats! First Topic: CBD

Did you know we have a Spoon Slack channel? No? Well, we do! It’s a place where our community can connect, talk about news and emerging startups, and discuss food tech trends from grocery delivery to robotic restaurants.

We think our Slack channel is a really valuable resource and want to put it to good use. So we’re launching a series of Slack chats, each exploring a dedicated topic or trend that we’re seeing a lot of in the food innovation space.

First up? Cannabidiol, also known as CBD. The buzzed-about ingredient has been making a splash in the health & wellness communities, popping up in everything from beers to candies to dog treats to face creams. And with the passage of the Farm Bill, which legalizes sales of hemp-derived CBD around the country, we’ll likely only see more of this ingredient in 2019.

Our first Slack Chat will be on January 18th, from 10:30 am – 11:30 am PST. We’ll have folks from marijuana edibles company Kiva, hemp elixir company Lumen, and marijuana dose validation startup TraceTrust to help lead the discussion and answer your questions about CBD.

Who’s the target consumer for CBD products? What sort of impact is it having on the culinary landscape? What exactly is CBD, anyway? Mark your calendars and join us on January 18th to find out!

P.S. You have to be signed up for our Slack channel to join. To do so, head here to fill out a quick form.

2019 to Bring More Green to the CBD Edibles Industry

President Trump recently signed the 2018 Farm Bill into the law with customary aplomb, which, among, other things, will legalize the production of hemp, and hemp-derived cannabidiol (CBD), at a federal level. That means that 2019 could be a big year for CBD, the non-hallucinogenic ingredient in marijuana.

Analysts are projecting huge growth for the CBD market. The Brightfield Group, which does research into cannabis-related industries, reported that the U.S. market for CBD products grew by a staggering 80 percent.

That’s some serious green.

Recently, CBD has had a personal makeover of sorts. As Merril Gilbert said onstage at the 2018 Smart Kitchen Summit: there’s a “cultural shift of acceptance” happening in the cannabis edibles market. Cannabis in general — but especially CBD — is no longer something relegated to stoner culture. Instead, it’s transitioning away from a recreational drug to a wellness ingredient. Consumers of all generations are turning to CBD as a natural alternative to pharmaceuticals to treat everything from insomnia to anxiety to muscle soreness.

But just because hemp is federally legal under the Farm Bill doesn’t mean that CBD will suddenly be popping up on your drugstore shelf. Legally, there’s still some ambiguity: the bill basically removes hemp-derived CBD from the DEA’s list of controlled substances, but it’s still up to states whether or not they’ll allow the sale of the ingredient for recreational purposes.

And when it comes to edibles, our main area of interest, it’s not smooth sailing. The FDA still considers CBD to be an illegal food ingredient, which means that, according to the National Law Review, it is “not allowed in food.”

Until it is, it’s likely that Big Food & Bev companies, like Coca-Cola, won’t touch CBD with a 10-foot pole. However, they’ll definitely be exploring ways to use it so they can start quickly rolling out products as soon as the FDA gives the ingredient its stamp of approval.

But that isn’t stopping a wide variety of CPG companies from incorporating it into their products: from beauty products to dog food to edibles (and drinkables) of all stripes. One of the reasons that CBD (and THC) can incorporate easily into so many products, from wine to chocolate, is because scientists have figured out ways to make it tasteless and water-soluble. Which means edibles no longer have to taste and smell like your dorm roommate’s weed brownies.

Here are just a few products we’ve seen taking advantage of CBD:

As CBD grows in popularity, consumer trust will play a larger and larger role. Even though it’s not hallucinogenic, people will want to know exactly how much they’re consuming and make sure it’s from a reliable source (i.e. hemp, not marijuana). Companies like TraceTrust, which verifies the dosage of cannabis edibles, will become more pivotal.

If you want to know what’s coming up next with CBD, look to Canada. The country legalized marijuana in October of this year, and Big Food brands have been taking advantage and forging new partnerships with cannabis companies. Especially ones making things like beer, which has been struggling with sales lately.

Shortly after Canada legalized weed, Constellation Brands (which makes Modelo and Corona) took a minority stake in Canadian marijuana company Canopy Growth. Just last week Budweiser’s parent company announced that it was partnering with cannabis company Tilray to research and develop cannabis-infused drinks for the Canadian market.

In conclusion, while CBD might not be popping up in your can of Coke in 2019, this next year you’ll definitely see more CBD — and in more places. Down the road, maybe we’ll see CBD meal kits (dessert kits?) or personalized CBD edibles strains. But for the next 365 days, it’s all about CBD establishing itself as a trustworthy, mainstream food and wellness ingredient.

The Farm Bill Just Passed — What Does That Mean for the CBD Market?

After months of back and forth, Congress voted yesterday to pass the 2018 Farm Bill. The $867 million bill contains lots of wide-reaching legislative measures, like expanded farm subsidies, SNAP revisions, and permanent funding for farmers markets. But perhaps most interestingly, the bill legalizes the production and sale of hemp at a federal level. And where there’s hemp, there’s CBD.

CBD (cannabidiol) is the non-psychoactive ingredient in cannabis. It can be derived either from hemp or straight-up marijuana, two different strains of the same plant (though hemp contains very little THC). Until now, legality of the substance was unclear at best: Though legal to buy in the 47 states where CBD sales are legal, it was still considered a controlled substance by the DEA.

But the passage of the Farm Bill has the potential to rapidly grow the already buzzy CBD market. The bill rewrites the definition of marijuana to exclude industrial hemp, essentially removing hemp-derived CBD from the DEA’s list of controlled substances. It also gives each state the power to decide if it wants to allow the sale of CBD products made from hemp.

There’s clearly a demand for the trendy ingredient, which, its proponents believe, can do everything from reducing inflammation to treating anxiety and depression. As of now, the majority of the roughly $800 million U.S. hemp market is for CBD products. CBD is showing up in beer, gummies, and skincare creams, spurred by media buzz around the substance as the next wellness miracle “drug”. And there’s no sign it’s going to slow down any time soon. The CBD market is projected to hit between $2 billion and $3 billion in sales by 2021.

According to a Consumer Reports interview with Colleen Keahey, the President of the Hemp Industry Association, legalizing hemp in the U.S. could mean “doubling or tripling domestic cultivation within the next year.” Though Ms. Keahey’s job as the President of the Hemp Industry Association means that her predictions should be taken with a grain of salt, I wouldn’t be surprised if it turns out to be justified.

Now it’s up to farmers to meet this growing demand. Since hemp will now be a regular commodity crop, like corn or soybeans, farmers are also able to buy federally subsidized crop insurance and invest in advertising — neither of which they could do before the Farm Bill. Hemp will also be eligible for institutional funds, meaning farmers can grow their farms more quickly and invest in new equipment. Combine these points, and the hemp market is indeed about to experience a boom.

It’s not all rainbows and pots (ha) of gold yet, though. The production and distribution of hemp-derived CBD may now be legal, but that doesn’t mean it will immediately start popping up in more and more consumables. The biggest reason: the FDA still considers CBD to be an illegal food ingredient.

So while farmers can now legally grow hemp across the country to produce CBD, according to the National Law Review, it is “not allowed in food” — though that hasn’t stopped plenty of companies from making CBD-infused products anyway. But until the FDA gives the thumbs-up to CBD, we likely won’t see Big Food brands (like Coca-Cola, who was rumored to be exploring a move into the cannabis drink market) releasing any products with it.

The bill will now head to President Trump’s desk, where he’s expected to sign it. This next year will be a critical test to see if the Farm Bill will indeed be as pivotal for the CBD market as many hope.

The Future of Cannabis Edibles is Wellness, Not Recreation (Podcast)

“The [cannabis edibles] consumer is probably not who you think it is,” said Linda Gilbert, formerly Managing Editor, Consumer Insights cannabis data company BDS Analytics. “The average age of a cannabis consumer is 42. This is not an 18 year old living in his parent’s basement.”

As marijuana legalization expands, so does its consumer base. More and more users of all ages and backgrounds are looking to experiment with this trendy new ingredient — but they’re not necessarily coming to it in order to “get stoned.” Many turn to cannabis as a natural way to take the edge off of anxiety, manage their pain, or just relax. “They’re doing it for more health and wellness reasons than recreational purposes,” emphasized Gilbert.

But unless they’re a historic marijuana user, they don’t necessarily want to smoke something. Instead they’ll turn to edibles. “[There’s a] cultural shift of acceptance,” said Merril Gilbert, founder of cannabis dosage labeling company TraceTrust. And more and more companies — even Big Food companies — are starting to notice.

Scott Riefler, VP of Science for cannabinoid company Tarukino, pointed out that cannabis is rapidly becoming a food ingredient in its own right. “It’s something that can be added to the culinary experience,” he said. In fact, cannabis can be a functional ingredient in everything from wine to chocolates. And as it becomes more widely legalized, its applications (and user base) will spread.

In this conversation from Smart Kitchen Summit 2018, I talk with these three panelists about the burgeoning cannabis edibles market — and where we can expect it to grow from here.

You can listen to the podcast by clicking play below, download here or find it on Apple Podcasts.

Stillwater’s CBD Powder Lets Food Manufacturers Turn “Anything Into an Edible”

If you’re looking to try trend du jour CBD (cannabidiol), the non-hallucinogenic chemical in marijuana, you’ve got a lot of options these days: the trendy ingredient is making its way into sparkling water, beer, candies, and even dog biscuits (okay, you probably won’t try the last one).

Companies big and small are hustling to take advantage of burgeoning consumer demand for CBD. Major beverage corporations like Molson Coors, Lagunitas, and Constellation Brands have all been developing drinks infused with the trendy ingredient. Even Coca-Cola is exploring ways to make use of CBD (though they won’t pull the trigger until the substance is legal throughout the U.S.).

“All of these [Big Food] companies are looking at it or at least talking to people about it,” said Jeremy Goldstein, co-founder and COO of Stillwater Brands, a company that makes cannabis edibles and drinkables. With good reason: Hemp Business Journal estimates that the CBD market is projected to grow by a whopping 700 percent by 2020, hitting $2.1 billion in sales. Greenwave Advisors, an independent research firm focused on the cannabis market, estimates CBD sales will hit almost $3 billion by 2021.

Based in Colorado, Stillwater’s products are targeted at a “new” sort of cannabis edibles consumer: someone who wants to experiment with marijuana in a way that’s safe, predictable, and consistent — and also tastes good. Everyone has had the experience where they ate too much and it “hit them like a ton of bricks,” said Goldstein. Their main product is Ripple, a tasteless, water-soluble powder that lets people turn “anything an edible,” according to Goldstein. By making Ripple water-soluble, Stillwater increased the speed of onset, so consumers will feel its full effects within 15 minutes and can decide whether or not they want to take more.

Stillwater Brands’ gummies and powder.

Thus far, all of Stillwater’s products have had at least some THC (the psychoactive element in cannabis) in them. But starting next year, Stillwater will launch an all-CBD version (less than .3 percent THC) of Ripple’s tasteless, odorless powder. And that’s where Stillwater’s business plan starts to get more interesting — and more complicated.

In order to make a CBD-only product, Goldstein told me they have to use a new facility that’s entirely separate from the one they use to make their products that contain THC. That’s because the regulatory framework is different depending on whether or not an edible contains THC and CBD, or CBD only; products that contain THC can only be made and sold in states where recreational marijuana is legal (as of now, that’s just 10 states plus D.C.), and you can only purchase them from a licensed dispensary.

The legality of CBD-only products, on the other hand, is very murky. The FDA recently approved a purified form of CBD as a treatment for certain seizure disorders, but they haven’t investigated it in a recreational context — which means it’s illegal on a federal level. Nonetheless, plenty of companies still ship CBD products, from fruit beverages to mango-chili chocolates, across state lines. As of now, there haven’t been any legal repercussions for these companies, but some, like Dirty Lemon, are backing away from the space, wary of liability issues.

Stillwater is already selling their water-soluble CBD product wholesale. Their B2B ingredients business, Stillwater Ingredients, currently provides CBD to two major food manufacturers and “five to ten” smaller clients in the U.S. (Goldstein didn’t disclose exact numbers), and also partners with a major Canadian cannabis company.

Like many other companies that make cannabis edibles (or drinkables), Stillwater frames their products as wellness tools — not party drugs. That stance goes double for products with just CBD, which many believe it has anti-inflammatory and calming effects (though it hasn’t yet been tested by the FDA).

Entering the wellness industry is a smart move: the global market is estimated to be around $4.2 trillion. By marketing their edibles as wellness tools, almost like vitamins, Stillwater can also capture a wider range of consumers than traditional “stoners.” According to Goldstein, their target demographic is anyone who might use a sleep aid, struggle with anxiety, or have difficulty focusing at work. In short: pretty much everyone.

If the 2018 Farm Bill, which is reportedly nearing the finish line, passes, Stillwater might soon be serving a lot more of these consumers. The bill would legalize sales of hemp-derived CBD nationwide, opening the floodgates for the cannabidiol market and bringing many more players, wholesale and otherwise, to the table. It could even pave the way for Big Food to release CBD-infused products. Until then, come next year, you can use Stillwater’s Ripple to edible-ize anything your heart desires, from apple juice to zucchini bread.

Cloudponics’ Automated GroBox Helps Cannabis Noobs Grow Some Bud

If the only thing preventing you from growing cannabis in the comfort of your own home is your utter lack of gardening skills, then — after I remind you to check your state and local laws before attempting to do so — I might suggest you turn to Cloudponics’ GroBox.

Grobox is a cloud-connected, automated indoor system which lets you grow your own cannabis (or, to cover any legal bases, tomatoes). The armoire-sized box combines hydroponics and a mobile app that promises to let even the brownest of thumbs grow six plants from seed to maturity in just three months, allowing you to harvest up to one pound of dry buds. (Look, I get I’m no Jeff Spicoli, but that seems like a lot.)

Costing $2,690 (though they are running a special $420 off deal right now)(sigh), the GrowBox comes with the cabinet, LED lighting system, water trays, pH and nutrient sensors as well as nutrients for your first grow. You’ll have to get your own seeds (again, check your local laws).

Once set up, the GroBox uses WiFi to connect to the cloud so you can monitor the growth from anywhere in the world using the mobile app. The Cloudponics app comes with “recipes” to automate the lighting and nutrient distribution depending on what strain of cannabis you want to grow, or if you’re a power user, you can skip the recipes and manage your own grow for desired results.

The app also serves as the key to unlock your GroBox, so neither unwitting kids nor nosey neighbors can get into your crops.

In addition to sales of the GroBox itself, Cloudponics generates recurring revenue through a nutrient refresh pack sales. These packs cost $200, last for two grows (six months) and include nutrients, pH adjusters, new sensors and an odor filter.

Founded in 2014, Cloudponics is based in Santiago, Chile, and has raised $700,000 in, errr, seed funding. I spoke with Co-Founder Nicolas Ruiz, who told me that the company is on its third-gen box, and has sold more than 50 GroBox’s in Chile, and “well over a couple hundred” boxes across thirty states in the U.S.

Because the system is connected, Cloudponics has some insight into how people are using the appliances. Ruiz said that most people start growing right away, get a full harvest and then take 1 – 2 months off (not surprising since a pound is a lot to get through). Blue Dream, a California strain, is the most popular, and the Cloudponics community also shares pictures and feedback about their harvests, and the company can use data from those grows to improve their recipes.

Ruiz says that he hasn’t run afoul of Johnny Law so far because the GroBox can be used to grow other things besides cannabis, like lettuce and tomatoes, and can be marketed as such. GroBox initially started off looking to get into the home-grown produce market, but changed direction when they saw the size of the potential market for cannabis growing and could see changes coming to the law.

Cloudponics certainly isn’t the only home grow-in-a-box system for sale. Others like Natufia or Click & Grow or SproutsIO are coming to market as well, though those companies tend to be a bit more microgreens-forward in their messaging.

But, if weed is what you want to grow (in accordance with all relevant laws), GroBox may be your go-to.

Despite “High” Interest, CBD-Infused Drinks Not Ready for the Mainstream

Expectations have been riding high for CBD-infused beverages. CBD (cannabidiol), the non-psychoactive ingredient in marijuana that’s meant to promote relaxation and fight inflammation, has been popping up everywhere from beer to chocolate to dog treats.

Lately, CBD has been making an especially big splash in the beverage space. Sparkling water drink Recess, which contains 10 mg of CBD per can, frames itself as a relaxing, focus-inducing drink for the afternoon work slump. Major beverage corporations like Molson Coors, Constellation Brands, and Lagunitas have taken steps to develop drinks infused with CBD. The non-hallucinogenic extract is also showing up in lattés, non-alcoholic wine, and carbonated drinks.

A variety of cannabis-infused edibles.

But the rise of CBD-infused drinks might not be as straight a shot as it seems.

A few months ago rumors circulated that Coca-Cola was in talks with a Canadian marijuana producer to create cannabis-infused beverages. The move was seen as a way for the soda giant, which is trying to diversify its portfolio amidst a decline in soda sales, to tap into the fast-growing market of healthy, low-sugar beverages like tea and kombucha.

However, it seems that for now their cann-ambitions have cooled. A few days ago, the soda giant’s CEO told the Wall Street Journal that the company “won’t use cannabis-derived ingredients in the U.S. or elsewhere until they are legal and there is a scientific consensus that they are safe for daily consumption.”

They’re not the only high-profile company to run up against regulatory challenges for CBD sales. In late June of this year, fancy water startup Dirty Lemon released a product called +cbd. Each bottle contained 20 mg of the non-hallucinogenic cannabis extract, and was aimed at the “wellness” market. Earlier this week, BevNet reported that the company would discontinue sales of their +cbd drinks “until the regulatory framework around hemp-derived CBD is clarified on a federal and state level.”

According to the piece, Dirty Lemon ceased sales of +cbd because the contradictory laws made manufacturing and distribution prohibitively tricky. “Most essential services, such as banks, credit card processors, insurance companies, co-packers and even freight carriers are limiting exposure to the ingredient until clear regulatory guidance has been issued at both the Federal and State level,” he wrote to BevNet. “We’re following the same strategy moving forward.”

Combined, these two pieces of news will likely harsh the mellow of those who thought CBD beverage mania about to hit its heyday. But honestly, anyone who thought that cannabis-infused beverages — hallucinogenic or not — were on the brink of becoming as commonplace as a can of Bud Light was overly optimistic.

As of now, recreational marijuana use is only fully legal in three countries — Canada, Uruguay, and Georgia — plus nine U.S. states and Washington, D.C. It’s still very much illegal at the federal level, and when it comes to CBD the law is pretty murky. The FDA recently approved a purified form of CBD, but only to treat certain seizure disorders. There hasn’t been much research done on the health benefits — or safety — of THC or CBD in a recreational edibles context.

In our panel on cannabis edibles at the Smart Kitchen Summit last month, the speakers pointed out that shipping edibles is a tricky process: they aren’t allowed to cross state lines, even between two states in which marijuana sales are legal. It makes sense that mega-companies like Coca-Cola are hesitant to dip their toe into an industry that isn’t legal across their entire market, or even in Georgia, where their headquarters are based.

Things could change pretty quickly if the 2018 Farm Bill, which would legalize sales of hemp-derived CBD in all 50 states, passes. But no need to bug out: until then, if you want to sip on a CBD beverage you can seek it out at a dispensary (where legal) or order a 6-pack of Recess — which doesn’t seem to have run into the same issues as Dirty Lemon — online.

Smart Garden Startup Click & Grow Raises $11 Million To Fuel Expansion

Estonian smart-garden startup Click & Grow announced this week it has raised $11 million to help accelerate growth for its hyperlocal grow systems into new markets.

Investors in this round include two strategic corporate investors in Swedish holding company Ingka Group (which owns and operates the majority of IKEA stores) and French conglomerate Groupe SEB, as well as Y Combinator and Shanghai-based Yunqi VC. The round brings the total invested in the nearly 10 year old company to $17.9 million.

Investor interest in one of hottest indoor-gardening startups is not surprising given the strong growth in the home-grow space as of late. Demand for smart-grow systems has surged as consumers embrace the healthy aspects of indoor farming and — let’s be honest — start their own mini ganja farms as cannabis becomes legal in parts of the US and other countries like Canada.

While Click & Grow was one of the first of a wave of startups bringing technology to indoor gardening for the home, there is no shortage of competition in the space. New entrants like AVA, Verdical and SproutsIO are working to to bring their products to market, while Natufia, another Estonian smart garden startup, just raised $1.2 million in funding. Even long-time market leader AeroGrow (over 1.4 million units shipped as of 2016) has also seen a resurgence as majority owner MiracleGrow freshens up the product lineup.

IKEA’s involvement is intriguing for a couple reasons. For one, there’s no doubt the home furnishings giant has increasingly embraced smart home technology in recent years and the Click & Grow investment will strengthen extend this tech push into the garden. The deal is also interesting because IKEA had already launched a home grow system a couple years ago, which they are apparently still selling.

Either way, the Swedish company sees lots of potential in its new partnership:

“We see this as another step forward in our journey to serve IKEA customers and our co-worker’s healthier and more nutritious food, and it opens up new opportunities for IKEA Retail markets to become more self-sufficient by growing fresh local produce,” explained Krister Mattsson, Head of Investments, Ingka Group.

The Estonian startup, which has sold 450 thousand total systems and 2.1 million plant pods since launch, said it plans to use the funding to expand into new markets.

For a Fast-Growing Cannabis Edibles Market, Trust is Key

When you’re curious if a food is organic or non-GMO, you look to see if there’s a label. If so, you know the item’s entire supply chain has been examined, tested, and verified by a reliable organization.

TraceTrust is working create the same sort of third-party certification for an emerging food product: cannabis-infused edibles. Started three years ago by Merril Gilbert and Rhiannon Woo, the California-based company came about right as their state was on the cusp of legalizing marijuana. Originally, they wanted to develop an entirely new type of edible: one targeted not at stoners, but a modern consumer who wanted to experiment with cannabis in a way that was subtle, reliable, and regulated.

Their target consumer group was women who wanted to use marijuana to relax or relieve pain, but didn’t want to smoke it or eat something with a heavy, overwhelming cannabis flavor. The two women got a clear, flavorless oil and gave it to pastry chefs to turn into baked goods, but quickly realized a big problem: when mixed into cookies or candies, it was really difficult to gauge potency.

“Unpredictability is the biggest issue facing the edibles market,” Gilbert told me over the phone. So TraceTrust shifted gears and began focusing on dosing. They now work with manufacturers and labs to test each edible and ensure that its advertised doses of CBD (non-psychoactive) and THC (psychoactive) are accurate and consistent. TraceTrust also examines the product’s packaging and consumption instructions to make sure they’re easy to understand. This is especially important for items which contain multiple servings, like a chocolate bar, where each square contains a prescribed cannabis dose.

If a product checks all the boxes, then TraceTrust will give the product a special seal of approval, called A True Dose. Basically, it signifies that the edible is made with reliable strains of marijuana and that each serving will contain exactly the dose it advertises.

A True Dose is currently in beta and will launch nationwide in January 2019. Starting then, manufacturers in any state where marijuana is legal can pay TraceTrust a fee to get their products certified. If they pass, they’ll earn the A True Dose seal to put on their packaging and marketing materials; if not, the TraceTrust team will work with them to correct any issues. “Overall, it’s very similar to non-GMO or any third party seal,” said Gilbert.

Gilbert predicts that as edibles become more widely legalized and, thus, normalized, labels like this will play a much larger role. “Anything that says, ‘We went further, we did more, we care’ is going to win consumers,” she said. They’re hoping that the A True Dose label will become a point of differentiation for brands, so they can charge more if their product sports the seal.

As we’ve written about previously on the Spoon, cannabis is rapidly becoming normalized and de-stigmatized; the same goes for edibles. Gone are the days of stale weed brownies — nowadays, consumers can get their high from a variety of beverages (beer, soda, coffee, even sparkling water), candies, chocolates, and more. Even Big Food and Drink companies are getting in on the game: Molson Coors, Heineken, and even Coca-Cola have all teamed up with cannabis companies to create marijuana-infused beverages.

“We’re beyond the stoner culture now,” said Gilbert. “But what makes people hesitate when it comes to edibles is the unknown.” Hopefully, TraceTrust can help cut through the haze of smoke currently covering cannabis edibles.

Gilbert will be speaking at the Smart Kitchen Summit on a panel entitled “Edible Cannabis: The New Functional Food?” She’ll be joined by Scott Riefler of Tarukino, an innovation group which develops cannabis-infused beverages, and Linda Gilbert of BDS Analytics, who tracks and analyzes the marijuana consumer market. If you’re interested in learning more about the future of edibles, don’t miss it!

Report: Grab a Can(nabis) of Coke?

Coca-Cola could be prepping a move into the cannabis drink market, according to a report out this morning from Bloomberg. The business site writes that the soda giant stalwart is in discussions with Canadian marijuana producer Aurora Cannabis to create beverages.

The talks are around CBD (cannabidiol)-infused drinks, which do not have the psychoactive THC that produces the high from pot. CBD reportedly helps with easing pain, inflammation and anxiety, among other ailments, and is quickly becoming the hip ingredient with which to imbue bougie beverages.

A spokesperson for Coca-Cola told Bloomberg that it was “closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverages around the world,” but the company hadn’t made any decisions at this time.

It would make sense for Coca-Cola to be actively exploring the CBD market. First, soda sales are declining as consumers look to less sugar-packed, healthier alternatives like sparkling waters. Coca-Cola’s move to diversify into a CBD category would follow Pepsi’s recent $3.2 billion acquisition of SodaStream last month.

While beer giants like Molson Coors, Corona, and Heineken have already made moves into the cannabis-infused beer space, there is still room for a soda company to get in and basically create and dominate a whole new category. With Coca-Cola’s size, CBD soft drinks could hit the market at scale pretty quickly.

Scaling, however, may not be the biggest issue for any cannabis-derived sodas as marijuana is still illegal at the federal level. There is a patchwork of state laws when it comes to legalization on a more local level. So there will be a lot to navigate as the market matures.

But cannabis isn’t the only area where Coke is diversifying. Last month the company bought the British coffee shop chain Costa Coffee for $5.1 billion, adding hot beverages to its brand portfolio.

We wouldn’t be surprised to see Coca-Cola move into the canna-biz, as it were; we’ll just have to see exactly where and how it chooses to roll out such a product. Soon enough, “grab a Coke and a smile” could have a whole new meaning.

Coca Cola 'Have A Coke and a Smile' 1970's TV Commercial

Cannabis-Infused Beer is New Hot Edible (Er, Drinkable) Trend

Have you ever wanted to roll your vices together to make one uber-vice? No? Well now you can — sort of.

Companies are capitalizing on marijuana’s march towards widespread legalization by developing new ways to ingest Mary Jane. One method in particular that’s on the rise is cannabis-infused beverages, from beer to soda.

Brewery behemoths have read the writing on the wall, and are scrambling to capitalize on marijuana legalization. The Wall Street Journal reported that Colorado-based beer giant Molson Coors will team up with Canadian marijuana grower The Hydropothecary Corporation to make a non-alcoholic, cannabis-laced drink for the Canadian market. They’re hustling, since Canada will legalize recreational-use pot on October 17th, and marijuana edibles will become legal in 2019.

This move comes a few months after Constellation Brands, the company behind Modelo and Corona beer, took a minority stake in Canadian marijuana producer Cannabis Growth. In June, Heineken-owned Lagunitas teamed up with CannaCraft to make Hi-Fi Hops: two cannabis-infused beverages made with varying levels of THC (the psychoactive chemical in marijuana) and CBD (the relaxing chemical). The inventor of Blue Moon beer partnered with Ebbu to launch a THC-infused beer in Colorado.

Though they might be called “beer,” no cannabis-infused beverages on the market are actually alcoholic. Instead, they’re marketed as an alternative to booze; they’re meant to give the same relaxing effects in social situations, minus the calories and hangover. The majority of these beverages have a relatively low dose of THC, CBD, or both — around 5 grams — which is enough to bring on a buzz for most people, but not so much that you’ll pass out on the sofa after eating an entire box of Girl Scout cookies.

But cannabis beverages aren’t limited to beer (or “beer”). California Dreamin’, a company which makes marijuana-infused sodas in flavors like grapefruit and tangerine, raised $2.3 million in funding this week. Investors include famed startup accelerator Y Combinator and Paul Buchheit, creator of Gmail. The San Francisco-based startup markets its sugar-free, gluten-free wares as a social beverage and “a healthy alternative to beer.”

Seattle’s Cafe Hitchcock Express offers lattés infused with CBD, the non-psychoactive chemical in cannabis. Californian Rebel Coast Winery offers a Sauvignon Blanc which contains THC; their website promises the relaxing effects of alcohol, but with fewer calories and no hangover. Keef makes sparkling beverages with marijuana, which they market as “the go-to social option for people looking for a low-calorie, sugar free alternative to alcoholic beverages and sugary cannabis-infused edibles.”

It’s no surprise that these companies are scrambling to get a piece of the consumable cannabis pie. As we wrote in our piece on edibles earlier this year, cannabis-infused food and drink account for 18% of California’s marijuana sales, according to a Green Market report. Everyone, from emerging startups to CPG giants, is experimenting to figure out how to ride the wave as marijuana becomes legalized in more and more places.

This is especially critical for alcohol-peddling companies, which are experiencing a dip in sales in states where marijuana is legal. A study by Georgia State University in December 2017 found that alcohol consumption dipped by 15% in areas with access to legal marijuana. By developing a pot product of their own, companies hope to capture some of the booming cannabis market — or at least not let it disrupt them quite so much.