Beyond The Pipe: Emergence Of Cannabis Edibles Industry

“Cannabis use” conjures up a variety of images. Some associate it with sparking a joint and thrusting a middle finger skyward to the man in the 1960s. Some might picture Brad Pitt’s stoner cameo in “True Romance,” pulling on a bong in a disheveled apartment.

A contemporary view would be a sunlit moment of smoky yogic #bliss, or a statuesque adventurer vaping next to a waterfall on instagram. The one thing all these images have in common? Smoke.

It’s no coincidence that cannabis consumption has historically been associated with smoking, because unlike alcohol, cannabis must be heated to have the best effect.

But if smoking cannabis is the optimal way to process and consume it, what’s the deal with eating or drinking cannabis, a.k.a., so-called “edibles”?

The market appeal here is obvious. Smoking, in all its forms (including vaping) poses some health risks. For people who would prefer to avoid smoking, but who want to experience the effects of cannabis, the ideal scenario is a predictable-dose, ingestible format.



However, as much as marketers and consumers would like to have our cannabis cake and eat it too, there are still challenges. Cannabis edibles formulated with even the most advanced technology still have to pass through your stomach before being absorbed, which slows the process down. Technology cannot change this basic fact of biology.

Despite the limitations of infusion technology, edibles were a one billion dollar market in 2017 in North America. Various reputable research companies estimate that the market will quadruple to around $4.5 billion by 2024. According to the Specialty Foods Association, edibles were a top-10 food trend for 2018, right up there with plant-based foods and Filipino cuisine.

Until Thursday of last week, dozens of cannabis celebrities were hailed as “the next Martha Stewart of cannabis.” But Martha herself has put those claims to rest by signing a consulting deal with the world’s largest cannabis company, Canopy Growth (NYSE: CGC), which trades at an astronomical market cap of around $16 billion. Martha Stewart’s hat in the ring is a sign that cannabis is very much going mainstream in the next few years.

Shail Paliwal is the co-founder of 3 Leaf Edibles, an upmarket edibles company selling cannabis-infused all-natural baked good and fruit jellies in California. I asked him about the future buying habits of consumers over the next few years as adult-use legalization grows in North America.

“The segmentation of consumers who are beginning to explore edibles, but who have not been traditionally people of the cannabis culture will eventually map similarly to traditional consumer-packaged goods buyers,” he says. “A small percentage will explore experimental means (like growing at home or cooking at home), but the vast majority of this segment will prefer ready-made products.”

In other words, average consumers of this market are going to resemble consumers for any CPG market. This fact (as well as the momentum and size of this new market) points to lush green opportunities for experienced marketing, branding, advertising and product design professionals.

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