With the passing of the 2018 Farm Bill and the removal of industrial hemp and its derivatives from the Schedule I list of the Controlled Substances Act, cannabidiol (CBD) became a mainstream sensation. Hemp-derived CBD is the non-psychoactive cousin to tetrahydrocannabinol (THC), the cannabis plant’s psychoactive component. CBD, faces both intense interest and caution by consumers, regulators, and industry leaders alike. While some sectors shied away, the craft food and beverage industries were some of the first to embrace CBD’s budding potential and literally put their money where their mouths were. The result? A flourishing CBD market with strong current and future financial outlooks, especially in the edibles sector. In 2019, the CBD market boasted an estimated $2.7 billion, up 38% from 2018. CBD product sales are predicted to reach $4.3 billion in 2020 and surpass $20.5 billion by 2025, according to October 2020 forecasts by BDS Analytics.
The idea of growing consumer demand, strong market projections, and opportunities for unique product innovation and development may have some viewing the space as “a world of pure imagination,” but becoming the next Willy Wonka of CBD is no easy feat. While many ingredients are essential to the success of a CBD edibles brand, there a few key ingredients, including strategic partnerships, food safety standards, and high-quality products, that we really want to dive into.
Strategic Partnerships – “Little surprises around every corner, but nothing dangerous!”
You’ve heard it time and time again: the best products start with the best ingredients. For edibles developers, it is crucial to align themselves with suppliers who can consistently deliver high-quality, pure, and safe ingredients. In edibles production, whether for CBD or THC-based products, a significant area of risk comes from the choice in cannabis oil. For CBD-infused food and beverages, the oil used must contain little-to-no THC. In addition, biological hazards, like mold and mildew which can occur naturally in cannabis and hemp production, need to be monitored for and removed as they can affect the overall quality and safety of the final edible product.
For this reason it is important for edible businesses to vet their producers and ensure that they’re supplying only legal, pure hemp-based oil that is backed by independent, third-party lab testing. Lab test results will be displayed on each batch’s Certificate of Analysis (COA), which should be readily available to the edibles producers and consumers.
Food Safety Standards –“The suspense is terrible…I hope it lasts.”
Although the passage of the Farm Bill in 2018 opened the floodgates for CBD-infused food and beverages into mass markets across the country, consumers and producers still face a confused and confusing matrix of state-by-state regulations for CBD-infused products.
Fortunately, in March 2020 the FDA announced a commitment to a comprehensive evaluation of CBD products and a $5 million increase in the 2021 budget for regulating cannabis and its derivatives, acknowledging public interest in CBD and paving the way for sensible regulation.
So, while the CBD-infused consumables industry awaits new regulation from the FDA, businesses are left with little guidance other than traditional FDA Food Safety Modernization Act (FSMA) standards for development, production, and safety. Currently, there is no specific federal government entity overseeing the cannabis edibles sector, so the burden is on state and local governments as well as the businesses themselves to adhere to quality standards.
For businesses, this means training staff at every level to be knowledgeable of federal standards, including FSMA and OSHA, and adhering to the company’s internal standards for product safety, purity, and quality. For example, cross-contamination, worker hygiene, and time and temperature control are consistent risks throughout all food and beverage industries. For the cannabis industry, specifically, potency is also another factor that brands need to manage with precision. Most brands quarantine their products after they are processed, and hold them from distribution release until independent lab test results meet the set potency target. A product batch that doesn’t meet potency standards is discarded, so it’s important for edibles curators and consumers to know your suppliers well.
For brands that rely on other companies for product production, it is paramount to train employees of the partner companies on these aspects, as well as the intended use of the product, how and in what quantity the product should be used, and quality assurance guidelines.
High-quality, Pure, Innovative Products – “Where is fancy bred? In the heart or in the head?”
With the availability of gourmet CBD-infused chocolates, gummies, syrups, sugars, ice pops, and seltzers, there appears to be a product fit for everyone’s taste with room for even more delicious hemp-derived delicacies to come. While many refer to the cannabis market as the wild west, open for the taking, the truth is the market has already set consumer-driven standards and is becoming more and more competitive. The edibles innovators at the forefront will tell you that, similar to gourmet food and beverage markets, the driving forces to appeal to consumers in this industry are product quality, purity, and customization.
To survive and thrive, brands must become well-acquainted with their target demographics and their preferences, including consumption, potency, bioavailability, and cost. According to a social media study by Synthesio, a social intelligence tool used to monitor social media and social analytics, younger consumers seek CBD for anxiety-reducing effects and older demographics are open to using it for chronic pain relief.
While CBD edibles production is not for the faint of heart, it can be a prosperous and rewarding business, especially as consumer interest in its wellness properties continues to increase and stigmas surrounding cannabis and its byproducts further dissipate. For those looking to enter the CBD edibles space, it is important to consider strategic partnerships, compliance, and high-quality, innovative product formulations when creating your business. With the market growing, now is the time to join this burgeoning industry, craft fresh-forward thinking ideas in the sector, and make your mark on today and tomorrow’s market.
