Gummies and mints are turning out to be hits at recreational dispensaries. In Colorado, Americanna’s Sour Leaf Gummies was the top seller in marijuana shops for 2016 and in Washington State, Mr. Moxey’s Mints are the big winner.
“From the beginning, cannabis consumers embraced our gummies as well as our approach to crafting edibles,” said Americanna CEO and founder Dan Anglin. “We grow our own cannabis using organic methods; we extract our own THC and now we even distill the extracts, producing pure THC.” Americanna sold 223,000 units of its Sour Leaf Gummies in 2016 and ranked No. 1 in unit sales, according to data from BDS Analytics. The product was only introduced on April 20 and quickly became a hit.
The Sour Leaf Gummies also ranked first in terms of dollars for cannabis products sold at recreational stores in the state, accounting for $3.8 million in sales. The Sweet Leaf Gummies logged in at the No. 4 spot for both volume and dollars sold for the final three quarters. Gummy candies in 2016 accounted for 26% of the edible market for sales in Colorado according to BDS Analytics. Chocolate bars grabbed 18% of the market, while hard candy only garnered 8%.
Colorado makes its edible marijuana companies stamp a diamond shape with the letters THC inside on the products to clearly identify its contents. Packages must also be childproof. The state logged over $1 billion in total marijuana sales for 2016 with recreational sales accounting for $875 million in sales.
Since edibles don’t produce any smoke or smell, they are quickly being adopted by people who prefer discretion. Edibles have enjoyed a 121% increase in sales over the past year in Washington state, according to data from Headset Inc., a cannabis analytics firm. Washington doesn’t allow the sale of gummy products because they are considered to be too similar to children’s candy. However, baked goods like cookies and brownies are allowed along with mints, beverages and savory products like soup. All products have a red hand sticker on them saying it isn’t suitable for children.
The top sellers in Washington include Mr. Moxey’s Mints and Zoot’s ZootRocks, which are hard candies. Part of the appeal for Mr. Moxey’s Mints is the relatively low dosage since the mints typically have only 5 mg of THC. The packaging is also quite appealing. The mints come in a tin not unlike Altoids mints. The THC information is on a paper wrapper, which once removed allows for the tin to look like any other mint container. Botanica, the company that makes Mr. Moxey’s mints, sold over $700,000 of peppermint-flavored mints over the past year. Tim Moxey, Botanica’s Chief Executive Officer, said, “Mints were very challenging to get right, which is why not many companies make them.”
The Zoots products are similar to hard candies and come in a round tin reminiscent of vintage hard candies. The company also makes drops for drinks and baked goods. While Botanica buys its cannabis from heavily vetted local farms, Zoots grows its own cannabis. The company plans to be an early entrant in newly legalized markets in order to get first advantages. They are currently working on establishing a Massachusetts organization and they’ll follow that up with California. Zoots Lemongrass and Berry flavors accounted for over $1 million in sales over the last year.
The Washington Liquor Control Board that regulates the marijuana industry reports that over 2.6 million units of edibles were sold during the fiscal year-to-date and over 72,000 units month-to-date. Washington State is estimating that over the next two years it will receive over $730 million in marijuana revenues. Most of the money is earmarked towards health programs like Medicaid and marijuana regulation with roughly $211 million left over for the state to spend.
California has legalized recreational marijuana, but it won’t legally be available until some time next year as the regulations are put in place. That hasn’t stopped the edibles market from being created for the medicinal market, which is known for servicing recreational customers with medical cards. Bhang Chocolates is based out of Oakland California and is considered to be a leading producer and has won several Cannabis Cup awards for their products.
Eric Eslao, Chief executive Officer of San Francisco’s Defonce Chocolate, is proud of producing cannabis chocolate that doesn’t taste “weedy.” His product is geared towards a California customer. “The design of the packaging and flavors like dark chocolate are more of what our customers like,” he said. Eslao noted that Defonce Chocolate has a 10,000-square-foot facility and they go use hundreds of pounds of chocolates. He has no intention of expanding to other states and estimates that sales could increase by 5x when the recreational market is legal.
Auntie Delores is one of the most established edibles companies in California and was founded in 2008. It makes both savory products like pretzels and cheese biscuits as well as cookies and brownies. Like more traditional snack purveyors, there are products that appeal to just about every type of customer from young millennial male looking for lots of bang for the buck to the discriminating baby boomer that prefers low dosage, but scores high on taste.
The real test of these edible companies is whether they can grow with their markets and transition from a local operation to one that can service hundreds of stores in multiple states. The biggest selling infused candy company in Colorado, by sales/dollar volume, Wana Brands, has done just that: they started in Colorado, where their products are in 450 of 500 stores, and have expanded into Oregon and Nevada, with future expansion ahead in Illinois and other states.
Please see the following “7 Questions” to CEO Nancy Whiteman, co-Founder of Wana Brands, on “Building an Edible Empire”, for insight how Wana Brands has expanded across multiple states through licensing agreements. CLICK HERE
(Note: This article was originally published by Forbes, and can be found at the following link: https://www.forbes.com/sites/debraborchardt/2017/02/21/gummies-and-mints-are-hits-in-the-edible-marijuana-markets/#7eb30a2c5a5d)
