Katelyn Baker
Well-Known Member
Forget gluten-free, artisanal and non-GMO: the fast-track growth segment in food processing is cannabis edibles.
Baked goods, confections and still drinks infused or mixed with cannabis extract are a big part of the rapidly expanding legal marijuana market. Known as edibles, they are part of the infused products segment, which includes oils and concentrates. GreenWave Advisors LLC, a research and financial analysis firm that tracks the legal cannabis business, estimates infused products constitute one-third to as much as half of medical and recreational sales that totaled $6.5 billion in 2016.
Medical marijuana was approved in California in 1996 and 27 other states have followed, but recreational sales, which didn't begin until 2014, are driving today's growth. With more states joining Colorado and Washington in establishing recreational, or adults-only, rules, 2019 sales in fully legal states are projected at $16.2 billion by GreenWave, compared to $2.3 billion in the 20 medical-only states.
"The big issue is getting over the stigma around cannabis," understates Mark Malone, an officer in the Denver-based Cannabis Business Alliance. While federal rules have been relaxed, the active ingredient in edibles remains a Schedule 1 drug under the Controlled Substances Act. Production and sale are intrastate-only, resulting in a patchwork of regulations and cash-only transactions, since the processors and retailers are prohibited from using the federal banking system, through which credit card transactions flow.
Nonetheless, companies that grow, process and sell edibles and other forms of cannabis are bullish about the outlook. The business is rapidly evolving, along with the barriers to entry. "The odds of being successful and having a Wild West mentality anymore are not good," says Nancy Whiteman, co-owner of Wana Brands in Boulder, Colo. Malone concurs, noting, "Given the licensing process itself and the start-up costs, you're looking at investing a few million dollars before you start selling product."
There's no shortage of investors willing to bankroll start-up costs, particularly on the East Coast. There a more business-like approach is being taken than in western states, where former underground operators are part of the mix of legal sellers. Regardless of their business model, all makers of infused products are trying to cope with purity issues, the biggest of which is the extraction process used to isolate THC, marijuana's active ingredient.
It's as true of edibles as it is of healthy foods: If it doesn't taste good, repeat sales aren't going to happen. People averse to inhaling smoke are stoking edible sales, but most of them can do without the weedy taste of an Alice B. Toklas-inspired recipe. THC extraction addresses the taste issue, and chemical extraction is the common technology.
Mike Devlin, president and co-founder of Seattle-based Zoots, settled on ethyl alcohol as his extraction chemical because it easily evaporates and sterilizes the raw materials, a food safety consideration when producing edible brownies, candies and still drinks. Raw materials may carry pesticides and microorganisms, and processors are applying a variety of methods to remove them during the extraction process.
"You're seeing a lot of innovation in extraction technology," Devlin acknowledges, with hydrocarbon and supercritical fluid – carbon dioxide pressurized to 2,000 psi into fluid form – among the alternative methods. As an added safeguard, some are adding a distillation step, post-extraction.
Devlin and his brother founded Zoots in 2014, setting up shop in a 25,000-sq.-ft. former food plant. Except for the extraction equipment, the machines and procedures are typical of any small food company lacking the production scale needed to justify automation.
"A baker would feel comfortable in some areas, a liquids bottler would recognize other work cells," says Devlin, an engineer who logged 30 years with some of the country's largest snack food manufacturers before launching Zoots. A horizontal flow wrapper and filling station help provide child-resistant packaging, but processing is largely a manual operation.
The same is true at Wana, where pilot-scale and bench-top equipment provides the only respite from manual processes, according to Mica Gross, operations director. Like most edibles processors, the firm sends samples to an independent lab to verify the potency and safety of its products. (Zoots has a mass spectrometer in-house for validation. With 2015 sales of $5.24 million, Zoots ranked among the country's 60 largest cannabis companies.)
Seed-to-sale traceability is required by state regulators, given the taxes involved and the controlled nature of edibles' active ingredient. Specialized software vendors were among the exhibitors at November's Marijuana Business Conference and Expo, an event that drew 10,000. However, conventional track & trace programs are more than up to the task.
"The best solutions are out there in the non-marijuana industry," says Devlin, who acquired "a full-blown recall system" by installing JustFood ERP software. "Marijuana is just another ingredient. There's no need to have customized software."
In what may have been an edibles first, Denver's Love's Oven bakery in October recalled packages of S'mores Brownie Bites that may have contained undeclared pecans. It was the ethical and moral thing to do, but the recall was entirely voluntary because of FDA's hands-off policy.
That may sound appealing to some food processors, but it's creating anxiety for edibles manufacturers eager to build consumer trust.
"For 30 years, I felt like I was fighting regulations," sighs Devlin. "I've changed my tune: I want regulation to make sure these products are safe and ensure the consumer gets a high quality product."
Few of his peers are clamoring for more regulation, though they recognize the risk to consumer trust if an edible sickens anyone. The grey market nature of the business already has produced some negative news stories, including fires and explosions triggered by volatile compounds like propane and butane used in some extraction processes.
It took 30 years for craft beer to move from a niche to a mainstream product. Edibles likely will collapse that timeline by a significant degree, assuming processors more closely emulate the good manufacturing practices and food safety safeguards that are common in mainstream food manufacturing.
News Moderator: Katelyn Baker 420 MAGAZINE ®
Full Article: Cannabis Edibles Manufacturers Wrestle With Growing-Pains Issues
Author: Kevin T. Higgins
Contact: 630-467-1300
Photo Credit: Brennan Linsley
Website: Food Processing
Baked goods, confections and still drinks infused or mixed with cannabis extract are a big part of the rapidly expanding legal marijuana market. Known as edibles, they are part of the infused products segment, which includes oils and concentrates. GreenWave Advisors LLC, a research and financial analysis firm that tracks the legal cannabis business, estimates infused products constitute one-third to as much as half of medical and recreational sales that totaled $6.5 billion in 2016.
Medical marijuana was approved in California in 1996 and 27 other states have followed, but recreational sales, which didn't begin until 2014, are driving today's growth. With more states joining Colorado and Washington in establishing recreational, or adults-only, rules, 2019 sales in fully legal states are projected at $16.2 billion by GreenWave, compared to $2.3 billion in the 20 medical-only states.
"The big issue is getting over the stigma around cannabis," understates Mark Malone, an officer in the Denver-based Cannabis Business Alliance. While federal rules have been relaxed, the active ingredient in edibles remains a Schedule 1 drug under the Controlled Substances Act. Production and sale are intrastate-only, resulting in a patchwork of regulations and cash-only transactions, since the processors and retailers are prohibited from using the federal banking system, through which credit card transactions flow.
Nonetheless, companies that grow, process and sell edibles and other forms of cannabis are bullish about the outlook. The business is rapidly evolving, along with the barriers to entry. "The odds of being successful and having a Wild West mentality anymore are not good," says Nancy Whiteman, co-owner of Wana Brands in Boulder, Colo. Malone concurs, noting, "Given the licensing process itself and the start-up costs, you're looking at investing a few million dollars before you start selling product."
There's no shortage of investors willing to bankroll start-up costs, particularly on the East Coast. There a more business-like approach is being taken than in western states, where former underground operators are part of the mix of legal sellers. Regardless of their business model, all makers of infused products are trying to cope with purity issues, the biggest of which is the extraction process used to isolate THC, marijuana's active ingredient.
It's as true of edibles as it is of healthy foods: If it doesn't taste good, repeat sales aren't going to happen. People averse to inhaling smoke are stoking edible sales, but most of them can do without the weedy taste of an Alice B. Toklas-inspired recipe. THC extraction addresses the taste issue, and chemical extraction is the common technology.
Mike Devlin, president and co-founder of Seattle-based Zoots, settled on ethyl alcohol as his extraction chemical because it easily evaporates and sterilizes the raw materials, a food safety consideration when producing edible brownies, candies and still drinks. Raw materials may carry pesticides and microorganisms, and processors are applying a variety of methods to remove them during the extraction process.
"You're seeing a lot of innovation in extraction technology," Devlin acknowledges, with hydrocarbon and supercritical fluid – carbon dioxide pressurized to 2,000 psi into fluid form – among the alternative methods. As an added safeguard, some are adding a distillation step, post-extraction.
Devlin and his brother founded Zoots in 2014, setting up shop in a 25,000-sq.-ft. former food plant. Except for the extraction equipment, the machines and procedures are typical of any small food company lacking the production scale needed to justify automation.
"A baker would feel comfortable in some areas, a liquids bottler would recognize other work cells," says Devlin, an engineer who logged 30 years with some of the country's largest snack food manufacturers before launching Zoots. A horizontal flow wrapper and filling station help provide child-resistant packaging, but processing is largely a manual operation.
The same is true at Wana, where pilot-scale and bench-top equipment provides the only respite from manual processes, according to Mica Gross, operations director. Like most edibles processors, the firm sends samples to an independent lab to verify the potency and safety of its products. (Zoots has a mass spectrometer in-house for validation. With 2015 sales of $5.24 million, Zoots ranked among the country's 60 largest cannabis companies.)
Seed-to-sale traceability is required by state regulators, given the taxes involved and the controlled nature of edibles' active ingredient. Specialized software vendors were among the exhibitors at November's Marijuana Business Conference and Expo, an event that drew 10,000. However, conventional track & trace programs are more than up to the task.
"The best solutions are out there in the non-marijuana industry," says Devlin, who acquired "a full-blown recall system" by installing JustFood ERP software. "Marijuana is just another ingredient. There's no need to have customized software."
In what may have been an edibles first, Denver's Love's Oven bakery in October recalled packages of S'mores Brownie Bites that may have contained undeclared pecans. It was the ethical and moral thing to do, but the recall was entirely voluntary because of FDA's hands-off policy.
That may sound appealing to some food processors, but it's creating anxiety for edibles manufacturers eager to build consumer trust.
"For 30 years, I felt like I was fighting regulations," sighs Devlin. "I've changed my tune: I want regulation to make sure these products are safe and ensure the consumer gets a high quality product."
Few of his peers are clamoring for more regulation, though they recognize the risk to consumer trust if an edible sickens anyone. The grey market nature of the business already has produced some negative news stories, including fires and explosions triggered by volatile compounds like propane and butane used in some extraction processes.
It took 30 years for craft beer to move from a niche to a mainstream product. Edibles likely will collapse that timeline by a significant degree, assuming processors more closely emulate the good manufacturing practices and food safety safeguards that are common in mainstream food manufacturing.
News Moderator: Katelyn Baker 420 MAGAZINE ®
Full Article: Cannabis Edibles Manufacturers Wrestle With Growing-Pains Issues
Author: Kevin T. Higgins
Contact: 630-467-1300
Photo Credit: Brennan Linsley
Website: Food Processing
