Is It Time For Cannabis To Grow Up?
As I walked the aisles of Hall of Flowers this year, I couldn’t help but notice the change in aesthetics and formulations of all the products. Over the past decade, legal cannabis went through its awkward years. Today, we’re seeing a witty tween -- and one should expect the next decade to yield a savvy young adult.
From the clunky Volcano of the 90s, to the sleek besito vape pen founded by Stanford MBA grad Maggie Connors, cannabis products are having a glow up. The first iteration of vape pens included simple ingredients in beautiful pens. The second iteration coming to market includes complex formulations. For example, take dreamt, a new vape pen developed by two scientists who met while enrolled in a PhD Chemistry program at the University of Southern California. They wanted a cleaner, scientifically proven method for a sleep aid. After developing the vape pen, they realized there was still a segment of their market who didn’t like the idea of smoking. This led to their second product, a beverage formulated with their founding motto in mind: No BS (bad science).
Another category that’s shedding its braces is edibles. In the first wave of edibles, we saw lots of sugary products. Today, consumers are kicking sugar to the curb and choosing healthier, plant-based products. Everywhere one turns, it seems like the brands providing vegan, gluten free or low sugar options are staying one step ahead of the crowd.
Says Scott Jennings, Pantry Co-Founder, “we are part of a new wave of brands focused on the conscious consumer. Knowing all too well that cannabis is a wellness product and pairing it with healthy ingredients is a must for many consumers."
What’s Next In Cannabis Consumption?
As the cannabis industry continues to grow, the next decade will be about IP and brand loyalty. It won’t be enough to have a buzz producing edible in a brandless package, as cannabis brands will need to rise to the same standards applied to general food and beverage companies -- clean ingredients with a deep passion for consumer experience.
We see proof of this in the beverage category. Water is an ultra clean method for consuming cannabis. Hi-Fi Hops, developed by AbsoluteXtracts in collaboration with Lagunitas, has dominated this segment of the market. Overall, infused beverage sales in general have increased by nearly 50 percent over the past year alone, according to BDS Analytics. Why? Because a beverage can be measured, dosed and consumed in an inconspicuous manner. Expect to see a flood of infused beverage brands entering the market in the next year or so.
We’re seeing sophisticated microencapsulation products, too, with these capsules allowing for better cannabinoids absorption in the stomach, while entering the bloodstream more efficiently. Similar to beverages, a capsule can be measured, dosed and consumed in an inconspicuous manner.
Why is dosage and discretion so important? Because the future of cannabis is for the consumer who wants relief from anxiety, pain, insomnia or life in general without advertising it to the world. They want to know exactly how much they’re taking, and they want to stay in control of their experience.
"Historically, as a symptom of prohibition, cannabis consumption has kind of been “buckle up and clear your day.” Consumers often had no idea what they were smoking when handed a joint at a party, or how much THC is in a homemade brownie. With legalization and education, cannabis consumers can now have agency over their experience." Maggie Connors, Founder and CEO of besito.
From soccer moms to baby boomers, we’re seeing a fresh batch of cannabis consumers -- and brands can expect them to want products that fit well with their individual lifestyles. For this segment, expect to see a move away from THC-heavy products and a move towards products that combine various cannabinoids to produce an ‘entourage effect.’
Peeling The (Green) Onion
We’re seeing large cultivators make bets on synthetics to aid in developing rare cannabinoids for pharmaceuticals and edibles. Ginkgo Bioworks signed a $122M partnership deal with Cronos Group. Intrexon signed a $100M licensing agreement with Surterra. Hyasynth received a $10M investment from Organigram. With synthetic aspirin around since 1853, and synthetic insulin available since 1951, it was only a matter of time before we began to use science to improve the extraction of rare cannabinoids.
For those building a cannabis company, it’s critical to keep eyes and ears to consumer trends. If you don’t focus on the customer, someone else will. The next decade of cannabis companies will be built on three pillars: obsession with customer experience, innovation and IP -- so there’s never been a more exciting time to be a cannabis entrepreneur.