Edibles Eating Up Marijuana Market Share; Bubble Could Burst
Pot snack producers have a bright present, may face a crowded future.
People are buying a lot of weed in legal states. In 2016, Colorado boasted of $1 billion-plus in marijuana sales with recreational dough accounting for $875 million in sales. All that thriving cannabis commerce means there’s a lot more tax money to go around, especially for states selling edibles.
New data shows that marijuana-infused edibles are the most desired product on the market. The orally consumed goods are not literally flying off the shelves, but that is only because of limited drone ownership by weed consumers. Despite their cute and design-ey packaging and labels, edibles are highly appealing to those who are trying to use cannabis with discretion—perhaps attracted by advances in scientifically perfected taste and dosage delivery. Hey, it’s a lot easier to pop a tasty, low-THC mint than it is to blaze in front of your office, right?
In Washington, Mr. Moxey’s Mints is the most popular edible. Moxey's has sold more than $700,000 of weedy peppermint candies nationwide. Close behind is Zoot’s ZootRocks—a good-looking and discrete tin full of Lemongrass and Berry hard candies infused with local cannabis.
And there’s a lot of money to be made.
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.
Edibles sales have increased by 121 percent over the past year in Washington, and that's overcoming the state's ban of gummy goods that look too much like kid’s candy. If Washington State lawmakers would lift that prohibition, revenues might just pop; 26 percent of edibles sold in Colorado were gummies.
Colorado’s edible favorite goes to Americanna’s Sour Leaf Gummies, released less than a year ago, which sold 223,000 units in $3.8 million in sales in 2016. Americanna's Sour Leaf was an instant hit, and the gummies are still being consumed almost as fast as they can be produced.
Another company driving the Colorado consumables market is Lucky Edibles, which produces a line of "sweet and discreet" infused-mints perfect for micro-dosing and recreational consumers alike seeking predictable, consistent experiences. Precision dosing is trending across all sectors of retail and medical cannabis, and some edibles companies like Lucky are leading the industry in delivering safe, consistent and effective products. (Lucky Edibles will soon be available in Nevada as well).
These burgeoning companies have a lot to gear up for, especially as newly recreational states, such as Massachusetts and California, get their weed shops up and running. The assumption is that these states will want a lot of edibles too. The challenge to many of these companies that are successful producing products to a local market will be translating that success to a mass market.
Plenty of local edibles companies have made their mark in almost-ready recreational states. For example, in California Bhang Chocolates has refined its recipes and won Cannabis Cup awards for its goods. Founder Eric Eslao is producing weed chocolate in a 10,000-square-foot facility in the Oakland area and tells Forbes he has no plans to expand beyond his state (which is not what we've heard)...
Only evolving rules and regulations and entrepreneurial preference will tell if these companies, poised to make a ton of cash, can sell outside of their (literal) comfort zones. Or, will they perish if they don't make moves to expand? Maybe it's just a matter of time and perceived profits before local markets are flooded with edible makers who will have compete harder for diminishing shares of the edibles pie.