Marijuana Business Magazine January 2019

January 2019 | mjbizdaily.com 89 INFUSED PRODUCTMANUFACTURERS NEED TOGET READY FOR THE FDA. Experts predict that U.S. federal reform of marijuana laws is com- ing—and with it, infused product manufacturers should prepare for oversight from the U.S. Food and Drug Administration. Manufacturing processes and quality-control plans will have to meet the FDA’s standards, said Rick Scarpello, the founder of Denver-based Incredibles, an infused product maker. That means edibles makers: • Should be prepared to register their facilities with the FDA and submit to third-party audits of quality-control processes. • Will have to prove to the FDA their manufacturing facilities are safe and that they have a quality-control plan that includes stan- dard operating procedures and good manufacturing practices. • Will also need a hazard analysis and critical control points (HACCP) plan. It shows a manufacturer has identified times in the manufacturing process where products can be vulnerable— milk that could spoil in transport, for example. • Will need to have food safety and food defense plans to show they’ve limited safety hazards when producing, manufacturing or handling food, and that they’ve prevented intentional tam- pering of products. • Will need to have testing, quality-control, quality-assurance and recall-system plans in place, too. – Joey Peña Seven Steps to Build into a HACCP Program 1. Conduct a hazard analysis. 2. Identify critical control points (CCPs). 3. Establish critical limits. 4. Establish monitoring procedures. 5. Establish corrective actions. 6. Establish verification procedures. 7. Recordkeeping procedure. Food Flow Chart Infused Products INFUSED BEVERAGES COULD BE A LUCRATIVE NICHE IN CANADA. Price, dose and discretion are the top purchase drivers for cannabis-infused products—factors that edibles makers need to keep in mind when dreaming up new offerings. Infused beverages could be a sizable product category in Canada, where edibles are expected to become legal in 2019. According to retail and consumer research on U.S. and Canadian markets conducted by Seattle-based Headset and Toronto-based Lift & Co.: • 88% of revenue from infused products is derived from items priced below $25 (all prices in U.S. dollars), and affordable costs are the No. 1 purchase driver for edibles. • 26% of Canadian consumers want a convenient size or dose, and 33% say they want high-THC, low-CBD products. • 30% of Canadian consumers say they choose edibles because they are discreet; discretion is particularly important to females and consumers 55 and older. • 48% of Canadian consumers are particularly interested in sampling cannabis-infused beverages when edibles are made legal there next year. What does that mean for new-product development in the United States and Canada? Based on the research, infused product makers should focus on potent, $15-$25 products that deliver long-lasting, consistent effects in 100-milligram packages or 10-milligram doses, experts said. There’s also a market for discreet products—mints or atomizers, for example—that are marketed to female consumers and baby boomers. – Joey Peña DesiredEdible Potency 33% 27% 25% 6% don’t know / not sure HIGH THC LOW CBD BALANCED THC CBD LOW THC HIGH CBD Deep Dive Into Segment Popularity 34% On average over 1/3 of consumers have purchased at least one edible or beverage product in 2018. 21% Edible consumers spend about 1/5 of their total cannabis budget on edibles. RIck Scarpello Courtesy Photo Canada is expected to legalize infused edibles in 2019. Courtesy Photo An HACCP program identifies points in manufacturing when products can be vulnerable. Courtesy Photo