About 50 percent of the United States has now learned that if you legalize it, they will come. The District of Columbia and 23 other states have legalized marijuana in some fashion, leading to an industry of marijuana wholesalers and dispensaries and marijuana-related product manufacturers. New York pushed the United States over the halfway mark as the most recent state to nix an all-out ban on cannabis use.
In July, New York Gov. Andrew Cuomo signed the Compassionate Care Act, which allows doctors to prescribe marijuana in a non-smokable form to patients with serious ailments that are recognized by the state on a predefined but flexible list of conditions. Cuomo stressed that the new law is in favor of legalizing medical marijuana only.
Other states to recently legalize medical marijuana include Maryland and Minnesota, which both signed bills into laws earlier this year, while Illinois and New Hampshire both signed on to some form of legalization last year. Some states, however, have long approved marijuana for medical use, starting with California in 1996 followed by Washington and Alaska in 1998. Two years later, Colorado legalized medical marijuana, and although the mountain state came in as the fourth state to legalize medical marijuana, it has by far been the most progressive.
In January, Colorado became the first state to legalize marijuana for adult recreational use. A recent analysis from the state’s revenue department reports it received $5.7 million from all marijuana taxes, licenses and fees in June, and nearly $34.9 million in the first six months of full legalization.
“One of the most promising aspects of the Colorado legalization is early anecdotal evidence of the decrease in use of other harder drugs and the resulting decrease in harm to the public health,” observes Mentor Capital’s medically oriented CEO, Chet Billingsley. “It seems a substitution effect shifted that fixed percentage of persons that seek intoxication over to marijuana and apparently reduced gateway introductions by illegal street dealers.”
Although Colorado is the first state to fully legalize marijuana it certainly is not the last. In fact, distributors licensed by the state of Washington began selling it for recreational use in July. Alaskans will vote on a reform ballot measure to fully legalize weed in November and so will Oregonians. Industry speculators believe California is not very far behind as people become more favorably disposed to marijuana. Allowing marijuana for medical use is a fairly easy fight these days, and full legalization or decriminalization of marijuana are becoming more normal.
A recent Gallup poll shows that support for marijuana legalization continues to grow. Fifty-four percent of Americans say the drug should be made legal, compared with 42 percent who want it to remain illegal. Opinions have changed drastically since 1969 when Gallup first asked the question and just 12 percent favored legalization. “Much of the change in opinion has occurred over the past few years – support has risen 13 points since 2010,” Pew Research Center says.
The changing landscape nationwide has awakened both veterans and newbies in the marijuana industry to the commercial possibilities. Not only is the unprocessed marijuana plant, scientifically known as cannabis, being used, but cannabis eixtracts including THC (tetrahydrocannabinol) and CBD (cannabidiol) are also finding a place in the market as cannabis edibles. That segment of the market has been especially fortunate since many states that have legalized marijuana in some form still dictate that smoking it in public or at all is still illegal, which has pushed many people to consume cannabis extracts via edible products – such as chocolates, cookies, gum and other satisfying treats.
“We project the industry as a whole to grow at a breakneck 64 percent per year pace,” observes Billingsley, whose company Mentor Capital Inc. (MNTR) has invested $1.5 million into cannabis edible companies. “As we fund some interesting cannabis enterprises to grow into great companies, our socially responsible investing goal is to help bring business professionalism and integrity to an area previously characterized by violent illegality.”
Leading the Way
The appeal of a non-smoking approach to cannabis medical treatments or recreational use has fueled the rise of the infused edibles market. One of the leading players in this field is Bhang Chocolate. Founded by Certified Master Chocolatier Scott J. Van Rixel, California-based Bhang Chocolate recently won first place at the Los Angeles Medical Cannabis Cup with its Bhang Medicinal Cannabis Chocolate 180mg “Ice” bar, a peppermint-flavored chocolate bar. Like with all of its products, Bhang Chocolate boasts that the Ice bar pays as much attention to taste as it does to dosage and product labeling. The company ensures that with each product the packaging is informative, dosage is consistent and serving size is satisfying.
Marijuana Business Daily has called Van Rixel one of the most successful entrepreneurs in the market and recently discussed his plan to move into new markets. The Bhang Chocolate brand is currently available in California, Colorado, New Mexico and Michigan. The chocolates are prepared at the company’s laboratory test kitchen in California. In its other three markets, the company works with licensed independent producers to manufacture its branded products. In Marijuana Business Daily, Van Rixel explained that this is the company’s preferred expansion method going forward. After Van Rixel cuts a deal with a local licensee, he provides detailed recipes for Bhang chocolates, packaging for the products and a handbook for how to do business. Each licensee pays him for the license and also provides a percentage of sales.
“We provide each agreement to the state so they can see there is no misinterpretation that we are partners or that there is a loan with ridiculous payback features,” Van Rixel told the publication. “It’s easier this way.”
Another stalwart in the marijuana edibles industry is Dixie Elixirs and Edibles CEO Tripp Keber. Like many of the other companies described here, Dixie Elixirs is not affiliated with MNTR. Established in 2010 as allowed by Colorado House Bill 1284, Dixie Elixirs and Edibles manufactures premium THC-infused product lines: Dixie Elixirs Sparkling Beverages, Dixie Edibles, Dixie Dew Drops (sublingual tinctures), Dixie Scrips, Dixie Prime Connoisseur Concentrates, Dixie Topicals, and Dixie Synergy 1:1 CBD and THC formulated Dew Drops and Scrips. What started as a single-line brand has now expanded to more than 30 different products across 100-plus SKUs. The company openly expresses its plans to become the first nationally recognized cannabis brand.
“The appetite for legal cannabis products that are well produced, with a focus on consistency and safety, is tremendous,” Keber stated in a release. He also says the company is “excited to continue the development of our Dixie Elixirs and Edibles brand as we look to capitalize on this growing market segment in other states that have approved the use of legal cannabis products.”
A Continuous Cycle
As more markets open up to recreational cannabis and medical marijuana products, the industry has improved the methods used to deliver THC and CBD to their customers. It’s hard to say whether the improvements have led states to feel more comfortable with marijuana’s benefits, but it is clear that the fact that states are opening up to the plant has spurred the marijuana industry to improve its methods. Much like great American liquors evolved from moonshine, as more states lift cannabis prohibition, the quality, product subtleties and variety of marijuana products improve.
That has been Ah Warner’s early experience. Warner officially rejoined the industry in 2012 with Cannabis Basics after a seven-year hiatus. She started creating hemp products, including candles, stationery, hand-dyed yarns, fabrics, handcrafted pillows and a line of hempseed goodies called Incredible Edibles, in 1995. She also began researching the therapeutic benefits of blending hempseed oil with healing botanicals and essential oils to create massage oils and body care products.
Although her company was seeing success in alternative retail stores and via mail-order catalogs, Warner says that sourcing pure ingredients for her products became difficult and risky. The healing advantages of cannabis-derived products were overshadowed by the lack of education and an immature market. Warner felt the industry risks were too great and reluctantly closed the company in 2005. Several years later, a friend asked her to help with the opening of a medical marijuana access point. Seeing that the industry was beginning to come into its own legitimacy, Warner jumped back into her kitchen lab and began reformulating and redesigning her original formulas to focus on the healing fundamentals of the pure and natural cannabis flower.
An emerging sector in the broad edibles market is infused gum. Gum makes an ideal delivery mechanism for a medical marijuana dose because it has some of the quick uptake characteristics of a sub-lingual, without the discomfiting pump of a tincture or presence of a lozenge under the tongue. Billingsley says Gel-Stat, under the leadership of seasoned advertising executive Larry Gershman, has a great opportunity in the space because his operating unit Mastix Medica holds the patent on room temperature gum production. Gum is usually produced as an extruded melt, but that higher temperature drives off or unravels some of the more beneficial but subtle sub-components of the medical marijuana extract.
“Initially, it was easy to see how the best individuals were rising in the cannabis market,” Billingsley says. “Now, a handful of companies have stepped up and are demonstrating how their businesses each are run professionally and that they hold themselves to task to deliver the best possible product.
G FarmaLabs is a good example. Besides aiming to deliver their high-quality Liquid Gold products, they also hold themselves to high level of responsibility in the testing lab.”
Founded by Ata Gonzalez, the family owned and operated G FarmaLabs is a vertically integrated company that works closely with farmers that use the G FarmaLabs’ recipe and process to cultivate, harvest, dry and trim the seven strains used in its products. These farmers consistently cultivate the same seven secret strains to guarantee a consistent product. It then uses those strains to perfect blends used in products such as Liquid Gold Extracts, a pure cannabis oil available in the medical marijuana marketplace; Liquid Gold Cannabis Oil, which is used by medical patients via vaporizing; and Liquid Gold Delights, a line of medical cannabis-infused chocolates. G Farma Labs insists that the quality of its products starts with the beginning process of extraction.
Extractors know the beneficial and active ingredients in the cannabis plant are oil soluble. That means cannabutter or an ethanol tincture are possible, but dissolving cannabis components just with water won’t work. The first advanced extraction systems used liquid butane to dissolve out an oily marijuana extract. However, that process often left a slight trace of other petroleum products in the extracted product. Interestingly, carbon dioxide at about 1,000 atmospheres is liquid and as a solvent dissolves oils easily. The big advantage with CO2 extraction is that by simply reducing the pressure, the carbon dioxide turns back to a gas and only the pure extract remains.
Today, most producers of cannabis extracts use a CO2 extraction method, sometimes referred to as “supercritical fluid extraction” (SFE). It is known for being the most effective way to extract beneficial essences from plant matter such as cannabis, and results in a high-potency standardized extract, which is crucial to ensuring a consistent end-product. Co-owner of Mountain High Products Nancy Whiteman explains that the advanced scientific processes needed to produce quality cannabis edibles and produce consistent potency resembles technology that one would see in something like a sci-fi movie.
“From the beginning, we have always been sticklers for making every batch of product precisely to our high standards for potency, taste and customer satisfaction,” Whiteman says. “Our hundreds of dispensary partners know they can always count on us to serve them with the utmost professionalism. And every one of our products tastes amazing.”
The folks at KIVA Confections echo this commitment.
“KIVA Confections was born out of a need for an edible product that was potent, consistent and enjoyable to consume,” founders Scott Palmer and Kristi Knoblich explain. “In early 2010, the cannabis edible market was desperately underserved; the products available were untested, unlabeled and inconsistent in potency.”
Prior to its launch, KIVA worked with expert cannabis cultivators and certified analytics laboratories, and went through much trial and error before offering its artisan-inspired, medicated chocolate products to the market. Since then, the company has retained its commitment to deliver products known for their “certified potency, incredible taste and informative packaging,” the founders say. Its dozen varieties of chocolate edibles have garnered a loyal customer base throughout hundreds of dispensaries in California and have earned multiple awards, including Best Edible at the San Francisco and LA High Times Cannabis Cups in 2013.
Refining the Market
The market’s commitment to progressively increase the quality of its product continues. However, increasing the quality doesn’t necessarily mean making the product stronger. Rather, like chefs perfecting a recipe, growers, dispensaries, researchers and companies are looking to manipulate the more subtle active components of the cannabis plant to deliver a tailored experience or medical result. By manipulating the mix of active components, strain developers and extractors are able to adjust the depth of the euphoric, sedative, creative or relaxing nature of the marijuana experience.
One of the key advantages of marijuana as a society’s acceptable mood-modifying substance is that it is virtually impossible to perish by overdose. The report in Addiction on the New York City Medical Examiner’s drug-related cause of death linked 97.6 percent of deaths to heroin, cocaine, opiates and alcohol. In fact, no direct overdose deaths have been reported for cannabis ingestion. The reason for this disparity in safety is that when most all other drugs relax the user they also slow the heart. Huge cannabis overdoses, seem to just put the user to sleep and the heart keeps ticking along. In fact, although marijuana is only half as addictive as alcohol, after decades of heavy use, the primary manifestation of a cold turkey stoppage of marijuana use is two weeks of insomnia as the body remembers how to relax normally prior to sleep.
Regardless, first-time users, like first-time drinkers, should be careful when they start out so that they don’t over use.
Many companies are trying to pre-address any concerns. Dixie Elixirs recently launched a single-serving-sized THC-infused watermelon-flavored soda called Dixie One. On its website, Dixie Elixirs explains that the 5mg single serving is absorbed through the liver and can take 45 minutes to an hour to take effect. The company says it is an ideal serving for those who are new to THC.
Groups such as the Cannabis Business Alliance (CBA) are also helping to build credibility in the industry. The advocacy group promotes sound marijuana industry policies and is a resource for small business owners, employees, patients and clients of the medical and recreational marijuana industry. CBA is launching its Edibles Education Campaign called “Start Low. Go Slow” to educate marijuana users, especially first-time users.
The alliance created an illustrated poster that clearly explains recommended serving sizes, the fact that you must wait for it to kick in, and reminds people to lock their treats away from children. As reported by TheVerge.com, the hope is that marijuana retailers will prominently display the poster near the point of sale.“At the dawn of the lifting of cannabis prohibition, it is uniquely appropriate that infused edibles be featured in Food & Drink International,” muses Billingsley. “During the alcohol prohibition, today’s wide variety of cocktails were born to hide the bite of moonshine, but ultimately enriched our relaxed drinking experience. Infused edibles are likewise now evolving to provide perhaps your choice of several relaxing types of variously infused after-dinner mints to complement the evening. Still, it is the cooking of food that frees the THC and updated versions of the Napoleonic-era marijuana-infused nut and fruit cake are as challenging for us now as they were for chefs then.
“For advice, newcomers need only look to India where they have served marijuana-infused drinks for 3,000 years. In a modern-day blog they say, ‘Don’t go on a camel safari after drinking your special lassi’ – a colorful safety reminder to use common sense,” Billingsley concludes.