5 Valuable Things To Know Before Digging Into the Edibles and Beverage Biz

November 8, 2018 4 min read

Opinions expressed by Green Entrepreneur contributors are their own.

Crafting delicious things with cannabis isn’t necessarily difficult. But manufacturing consistent and compliant product for the legal cannabis market? That’s a different beast. 

Here are five tips for survival in the lightning-fast and complicated world of cannabis edibles and beverages.

Related: 5 Things You Need to Know About Edibles

1. Cannabis is a tricky ingredient.

When it comes to mass producing cannabis-infused products, standard recipes simply will work. This is due to the unique chemical composition of the plant.

Take cannabis oil, for example. Because it is hydrophobic, meaning it does not mix with water, it requires dispersion, emulsion and homogeneity processing methods that are essential for product standardization.

Cannabis compounds can also taste bitter without distillation — ruining many recipe ideas. Choose your flavors wisely, and don’t rely on heavy amounts of sugar to mask this natural bitterness. Your customers will thank you.

2. Shelf life is key.

In order to survive in the modern cannabis industry, manufacturers must produce a mass amount of the product. Problem is — sometimes it doesn’t sell as quickly as planned, so it can sit for weeks (or even months) waiting on a shelf in a dispensary bud room or back storage.

Products that can hold their quality and potency over a long period are preferable to more perishable edibles and drinkables, which can potentially result in waste and lost profits. Regardless of the type of product you are looking to manufacture, you need to make its shelf life one of your most important priorities.

3. Compliance is costly.

Perhaps more than any other industry, cannabis products are the target of dozens of strict regulations, including when, where, and how they can be sold. Failure to comply can mean a state-mandated recall of your product — or even a complete shutdown. To add to the complication, the regulations vary by state and even county to county.

Some of the mandatory factors you’ll need to consider: Child-resistant packaging, compliant and traceable labeling, expensive double-testing at a licensed cannabis testing laboratory, and a cannabis attorney to check your work. 

Unfortunately, these come with a premium price tag so be sure to include these costs in your funding plan, or you’ll get left behind when the regulatory dust settles.

Keep in mind that the day you finally become somewhat comfortable with your state’s regulations, is likely the day that they will change again.

The packaging and label requirements are almost always problematic in the days and weeks after a regulatory change. Producing only small batches of labeling at a time can be helpful for your bottom line, as things can change quickly. Know your regulations and avoid wasted time and effort for your employees.

In terms of analyzing your product, packaging, and labeling for proper compliance with state and local laws, a lawyer is usually a more favorable asset than a business consultant.

Related: What East Coast Cannabis Entrepreneurs Can Learn from Colorado

4. Pricing is personal.

Pricing cannabis-infused products is a delicate balancing act. They should be priced within reason for the consumer, while still covering all your costs of production and compliance.

To avoid sticker shock, try to bring your pricing as close as possible to conventional price points of cannabis-free food and beverages. Determine a standard value equation for the consumer to equate the value of the product, with and without cannabis, to ensure you are in line with expectations of value over price.

5. Testing is advised. 

If you’re not sure if your edible or drinkable idea has what it takes to succeed, you should first test an “unmedicated” version of your product — meaning cannabis-free — tosee how it would be received if it was launched today. The cannabis is icing on the cake. There are millions of edible makers out there, but only those with superior quality will become household names. Test before you invest.