By Jonathan Gilinski
As a customer or medical marijuana patient, there are many considerations that run through your head before making a purchase in a dispensary. How good is the product? Is the dosage enough for me? Will it satisfy my dietary needs? How long will the effects last?
However, the one question that often makes or breaks the decision is “how much does it cost?”
When you walk into a cannabis dispensary you are confronted with an array of products from flowers and concentrates to capsules and brownies. As a buyer, you must make a quick calculation to decide how much you are willing to pay for a specific product.
This is not as simple as it sounds. The consumer’s decision depends on the quality and the quantity of cannabis contained in the product. Its potency compared to its price will determine whether this is the right cannabis product for the consumer. Depending on each of these delivery methods, your cost analysis may be swayed in favor of one product over another.
The most influencing and determining factor in your cost analysis, however, is the price per milligram. It is crucial for both the buyer and seller because it influences everything else; from how the product is produced, marketed, sold, and bought. When it comes to the various delivery methods for cannabis, the cost per milligram of some products are inevitably more than others due to its makeup and method of production. This results in creating barriers of entry for many smaller cannabis companies.
In the cannabis industry, edibles traditionally have a higher cost per milligram compared to capsules for a myriad of reasons. The first reason is that producing edible products, such as brownies or chocolate bars, demand a lot more than producing capsules. For instance, edibles not only require a detailed recipe for both the consumable and for the cannabis oil, but also require experienced personnel overseeing and running the production process. One seemingly insignificant miscalculation with the raw ingredients can cause the entire production to easily be tainted. In other words, there are many ways one can mess up an edible. In contrast, one can produce large quantities of capsules with a very simple procedure that does not demand as much effort and has very little room for mistakes. Since there is a positive correlation between difficulty of production and final sale price, edibles naturally have a higher cost per milligram and thus a greater barrier of entry.
Another factor that affects the barrier of entry of a product is the facilities and equipment required for production. To produce edibles you need a fully equipped commercial kitchen, which is quite costly. Additionally, there are more steps required to produce edibles. For instance, you must cook raw materials for infusions which takes time and requires numerous ingredients; adding to the cost of production. While edibles require all of these (ingredients, recipes, kitchens, machines, and human skill), the requirements for capsule production are pale in comparison. To produce a cannabis capsule, one needs is a clean room that complies with guidelines—including proper ventilation and clean machinery—which most standard facilities already have. Since capsules are very simple by nature and only comprised of a filled material and shell, the process is uncomplicated and enables the cost of production to remain low.
As explained above, because the cost per milligram is the major deciding factor for customers, it is important to provide them with products that are not costly. Therefore, instead of producing edibles at a high price per milligram and deterring customers, it is more beneficial to produce capsules, which maintain a low cost per milligram. By keeping the production process effortless and at a minimal cost, your company will be able to provide the market with the cost effective products that your customers want!
About the Author
Jonathan Gilinski is an authority in the hard-capsule field with more than 20 years of experience in capsule manufacturing and encapsulation. Over ten years ago, Jonathan founded Capsuline, a company which has become a top provider of capsule products worldwide. At Capsuline he further developed his detailed knowledge of all aspects of the hard capsule manufacturing process, including capsule formulation, proper material handling, product design, branding, equipment function and more.
The Capsule Consulting Group (TCCG) is Jonathan’s latest venture where he operates as Founder & CEO. TCCG utilizes Jonathan’s expertise and extensive network of industry resources to provide capsule consulting services to the emerging cannabis markets. Jonathan can be reached at [email protected]
Your email address will not be published. Required fields are marked *
Save my name, email, and website in this browser for the next time I comment.
Notify me of follow-up comments by email.
Notify me of new posts by email.
A Brazilian appeals court has agreed to rule on whether companies and farmers can plant cannabis in the country, which could open the door to legal cultivation for medicinal and…
The Legislature has approved changes to Mississippi’s cannabis law that will limit the information available to the public about businesses’ citation records and will attempt to crack down on inconsistencies…
Multiple states in the West are seeing an increase in Chinese workers and funding at unlicensed cultivation operations. A few days before Christmas, a joint law enforcement task force found…
It has been one year since Long Beach, California-based Glass House Brands (NEO:GLAS.A.U) (NEO:GLAS.WT.U) (OTCQX:GLASF) (OTCQX:GHBWF) announced the start of cultivation at the 5.5 million square-foot facility located in the…