Cannabis Forum Recap: Taking the First Steps

A thriving U.S. market for legal cannabis food and beverage products is no longer just a theory: it has officially arrived.

What that marketplace looks like and how entrepreneurs should navigate it, however, is still anything but clear. Mapping this new landscape and charting a path forward for the nascent industry was the focus of discussion at the first-ever Cannabis Forum for Food & Beverage, presented by BevNET and NOSH, on Dec. 1 in Santa Monica, Calif. Working with either THC or CBD-infused products present unique challenges across multiple levels including regulation, marketing, investment, supply chain and distribution, to name a few. These hurdles can be intimidating, but the advice and insight provided by the Forum’s presenters was aimed at helping ambitious entrepreneurs take their first steps into the brave new world of cannabis CPG.

After opening remarks from BevNET Editor-in-Chief Jeffrey Klineman, the Forum kicked off by presenting a panel of four speakers — Adam Miron, co-founder and chief brand officer of HEXO; Hesaam Moallem, president and CEO of Charlotte’s Web; Errol Schweizer, co-founder of and partner in mood33; and Evan Eneman, founder of Sands Lane Capital — to examine how cannabis is developing into a cooperative industry even at an early stage.

Individually and as a group, they emphasized the need for greater education — aimed at both consumers and the government agencies charged with regulating production and sales — around cannabis and specifically the non-psychoactive benefits of CBD. Schweizer, calling the level of scrutiny on hemp-derived CBD “irrational,” advocated for a loosening of rules that would allow for universities and other research institutions to more closely collaborate with cannabis companies on testing and R&D. Meanwhile, Moallem voiced his optimism that the process of de-stigmatizing marijuana to mainstream consumers was progressing at a steady rate.

“Five years from now, we will be talking about how certain terpenes affect functionality,” he said.

Next, Jessica Lukas, VP of consumer insights at market research firm BDS Analytics, provided the data and context to back up some of the early market momentum in cannabis CPG. Attitudes towards marijuana are changing, she said. Whether or not they are consumers themselves, 80 percent of adults in the U.S. and Canada support some form of legal marijuana usage. According to Lukas, 23 percent of adults in states where marijuana is legal (either recreational or medical or both) have used cannabis in the last six months, while a further 38 percent are considered cannabis “acceptors.” As food and beverage makers improve formulation and dosage for their products, that group is expected to grow. In the beverage space, high-dose THC and CBD drinks are giving way to new products that offer more of an incremental functional proposition to consumers. All-channel sales for CBD-infused products are expected to reach $28 billion by 2022.

Following Lukas, Ari Sherman and Jourdan Samel, co-founders of vertically integrated hemp-based food maker Evo Hemp, took the stage to offer a case study in building a successful cannabis CPG brand. The pair discussed how they’ve taken a proactive approach to investing in both science — by launching a hemp genome mapping initiative to better dial in on certain terpenes — and marketing, by creating communications house Evo Hemp Media as a way to educate consumers.

One of the primary concerns for any budding cannabis entrepreneur is the regulatory framework for both THC and CBD-infused products. Cassie Furman, attorney at Vicente Sederberg LLC, broke down the progress being made on loosening federal and state rules around cannabis, noting that a “national change in perspective on cannabis is gathering momentum” as states like Arizona, New Mexico and New York are expected to approve adult marijuana use by 2020.

The following speaker, J. Smoke Wallin, president of cannabis cultivator Vertical, spoke about translating his experience as a brand builder in the spirits industry to the cannabis space. He noted that establishing trust is critical, and as they take the next step in their development, companies will need to recruit talent with strong backgrounds in branding and CPG to help prepare for the forthcoming industry “tipping point.”

As the CEO of CBD-infused sparkling water maker Sprig, Michael Lewis shared lessons and learnings from his career in cannabis. By creating a secondary THC-based line, the company was able to position its products to work in a variety of use occasions and become integrated into their daily lives. As the beverage market gets more crowded, Lewis noted, only brands with a strong footing in supply chain, marketing and distribution will have a chance to rise above.

As the Forum’s penultimate speaker, Will Kleidon, founder and CEO of Ojai Energetics, provided the scientific foundation for understanding cannabis on a biochemical level. With proper dosing of CBD being a frequent question from both consumers and retailers, Kleidon noted interestingly that, according to research, a 250 to 500 mg dose of CBD is required for users to feel maximum benefits, far higher than the amount found in most infused food and beverage currently on the market.

Closing out the day, Angelica Xavier, founder of nutrient dense snack brand GOODBITES, talked about making the transition from working as a business consultant to embracing a raw, vegan lifestyle in launching her company. She explored how GOODBITES is helping to change some of the stigma around edible cannabis products by breaking down dosage into simple terms (one cookie, one dose) and the unique marketing opportunities available for brands in California.

The Cannabis Forum for Food and Beverage, presented by BevNET and NOSH, was sponsored by Green Taste, mood33, Growpacker, Ojai Energetics and Lebermuth.