Monday, October 01, 2018 10:11:46 AM
Infusion: The 'critical piece' of the edibles puzzle
C/O Globe and Mail - Report on Business Cannabis
HIGHLIGHTS
1. Companies are racing to find technology that speeds up the effects of ingesting cannabis
2. Some firms are researching in-house, others turning to specialty companies such as Lexaria
3. Lexaria says it's in talks with several cannabis-related companies
Marijuana companies are gearing up to sell cannabis-infused food and beverages – the next phase of pot legalization in Canada expected next year – with a focus on providing products that don’t smell or taste like weed.
Companies are also scrambling to find the right technology that speeds up the effects of ingesting cannabis, similar to drinking a glass of wine or beer, to better compete with the alcohol industry.
“It’s a critical piece of the puzzle,” Jason Zandberg, an analyst at PI Financial, said of the onset and offset effects of edible cannabis products.
The goal is for consumers to feel the effects of cannabis-infused products in roughly 10-to-20 minutes, instead of an hour or more, which is the case with many edibles with tetrahydrocannabinol (THC), known for providing a "high," made at home or sold on the black market today.
“They need to nail down the ability to have consumers feel the effects,” sooner to avoid over consumption of THC, which could lead to an unpleasant experience, Mr. Zandberg said.
Industry leader Canopy Growth Corp. is working on its own in-house cannabis-delivery technology for this next market, while others are turning to specialized technology companies such as B.C.-based Lexaria Bioscience Corp. Lexaria claims its patented technology helps to improve the taste, smell and absorption of cannabis-infused products. Lexaria and others in the space are developing technology that delivers both THC and cannabidiol (CBD), the latter of which is often used for medical purposes.
It’s part of the race to develop alternative pot products after cannabis is legalized for recreational use on Oct. 17, starting with cannabis plants, seeds and oils. Health Canada is working on regulations for cannabis edibles, including food and beverages, expected to be released around mid-2019. It’s taking into consideration what it cites are the “unique potential health risks and harms that need to be carefully understood" with edibles. The regulations are expected to outline how much cannabis can be used per serving in food and drinks.
Roughly six out of 10 consumers are expected to choose edible products, including beverages when legal, according to a recent report from Deloitte. Cannabis products could potentially eat up around 15-to-20-per cent of the alcohol market, based on a study of U.S. states where it’s already legal.
It’s that threat to the alcohol market that has a growing number of beverage companies getting in on the action. International wine and beer maker Constellation Brands recently boosted its stake in Canopy Growth to 38 per cent from 10 per cent, while Molson Coors Brewing Co. struck a joint venture with HEXO Corp. (formerly known as Hydropothecary Corp.) to develop non-alcoholic, cannabis-infused beverages.
Coca-Cola Co. recently confirmed to the Globe and Mail that it’s watching the growth in the use of CBD in “wellness beverages.” Coke is among several beverage firms that have been talking with cannabis growers to learn more about the plant, according to The Globe’s reporting.
Canopy Growth CEO Bruce Linton said his company has been researching cannabis-infused beverages in-house for about three years, with a focus on consumer tastes.
“We simply looked at it and said ‘if we had consumers, how would they expect these products to be delivered, work, duration of effect and – knowing what we do about cannabis and extraction – how can we get there,?’” Mr. Linton said in a recent interview.
He wouldn't divulge any specific information about the products or technology being tested, citing competitive reasons, but said the company will be ready to launch the products when edibles are legal. “We think these experiments will yield some very interesting combinations," Mr. Linton said.
A HEXO spokesperson also declined to comment on the technology it’s using as part of its joint venture with Molson, including whether it involves an outside party.
Hill Street Beverage Co. Inc., Canada's largest alcohol-free wine and beer company, has signed an agreement with Lexaria to develop cannabis drinks, using Lexaria's DehydraTECH technology.
“Cannabis is a really stinky weed,” Hill Street CEO Terry Donnelly SAID. “With the Lexaria process, the infused product was virtually indistinguishable," based on testing to date.
Lexaria says its technology, created specifically for use in cannabis products, not only masks the taste and smell of cannabis but also controls how it's absorbed in the body. Its process includes mixing cannabis oil with fatty acids derived from sunflower oil. The combination is put through the company's specialized dehydration process to draw out the benefits. Once in the body, the formulation works with existing body functions that absorb fatty acids and channels them away from the liver for rapid access to the bloodstream.
The company says its technology enables cannabis in the products to be absorbed in about 10-to-20 minutes, versus 60 to 120 minutes for some cannabis-based edibles today. The effects last for about two-to-three hours.
The company says its technology is also an alternative to sugars and chemicals that are often used to placate taste and odours in certain food and beverages.
“We are focused on making ingestible or edible bioactive substances taste better, smell better, act faster and enhance potency,” says Lexaria president John Docherty, a trained pharmacologist and toxicologist, who is also the former president and chief operation officer of pharmaceutical firm Helix BioPharma Corp.
The company’s focus is on licensing its technology to third parties for use in their products. An example is a Colorado-based company that sells the 1906 brand of chocolate, which is infused with THC using Lexaria’s technology, as well as Los Angeles-based Biolog, Inc., which makes food and beverages with cannabis. Lexaria also has an agreement with the newly created Cannfections Group Inc. in Canada, which plans to make cannabis-infused chocolate, gummies and other candy.
Mr. Doherty says the company has “numerous other discussions underway” with small and large industry players following its business model in the lead-up to the legalization of edible cannabis products expected next year.
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