Marijuana Business Magazine January 2019

Marijuana Business Magazine | January 2019 100 Business Strategies | Infused They used a variety of coffee beans, filters and brew times to dial in their final product. For the THC oil used to infuse the beverage, Somatik’s owners chose a double-distilled concentrate that has upward of 85% THC. Double-distilling the oil creates a more consistent experience for consumers by reduc- ing the terpene profile, Coker said. Terpene profiles in smokable flower can lead one consumer to have a vastly different experience from another. In edibles and infused beverages, that’s not necessarily a desirable quality. “Terpene profiles are incredibly important, but we wanted to develop a product that would deliver a con- sistent experience to people who are newer to the industry,” Coker said. Infused beverage makers use various strategies—ethanol tinctures, nanoemulsions, microencapsulation or fatty acid-conjugation reactions— to introduce hydrophobic THC oil to the liquid products, Coker said. Coker, who is a plant biologist and worked on formulations for skin care products before co-founding Somatik, worked with chemists to develop nanoemulsions to infuse Somatik’s cold brew with THC oil. Nanoemulsions prevent the oil from separating in the liquid and provide better homogeneity in canna- bis-infused beverages, Coker said. The tiny oil droplets are combined with sur- factants, compounds that lower the surface tension between the oil droplet and the liquid. One end of the droplet binds to water; the other binds to oil. That makes it easier for the oil to sus- pend itself in the liquid rather than separate, Coker said. “We wanted to make sure our emul- sion wouldn’t separate or break and that the concentration of the THC is consistent throughout the entire product,” Coker said. “That makes it easier to say with confidence, ‘This is what your experience will be like.’” Partner With Local Firms For a cannabis-infused product manufacturer, a strategic partnership with a reputable food or beverage business can: • Boost the brand’s visibility. • Earn valuable media coverage and new sales leads. • Provide new comarketing opportunities. Coker and Schroeder purchase wholesale ingredients from and have partnered with two well-known Bay Area companies: Ritual Coffee, a cof- fee roaster and retailer, and Endorfin Foods, an artisanal chocolatier. During the development of Soma- tik’s infused cold brew coffee—Soma- tik Featuring Ritual Coffee—Ritual owner Eileen Rinaldi made her staff available to taste Somatik’s formu- lations and provide quality control feedback, Coker said. “That in and of itself was completely invaluable,” Coker said. “At the time, we didn’t have a product on the market and little capital, so to have that expertise given to us was really the only way we could move as quickly as we did.” The infused cold brew also quickly caught the media’s attention. The San Francisco Chronicle called the partnership “a classic San Francisco fusion.” One marketing professional told the newspaper the pairing was “brilliant.” “It was really beneficial in San Francisco to talk about our partner- ship with Ritual,” Coker said. “People know their coffee and know they like Ritual coffee.” The newspaper’s coverage prompted dispensaries to contact Somatik about stocking its product and increased foot traffic to retail out- lets where the product was available, Coker said. The two brands have developed cross-promotional marketing strategies, too. Both brands share social media posts that feature the other’s products, and Somatik has used in-store vendor days to share buy-one-get-one Ritual coffee cards or free bags of Ritual coffee with can- nabis consumers. Source Via an ‘Ethical Supply Chain’ Schroeder said he and Coker have an “extreme focus on the ethics of (their) entire supply chain.” “Cannabis is a healing plant, and we need to ensure that every Somatik's cannabis-infused cold brew coffee. Courtesy Photo San Francisco-based Somatik, a manufacturer of cannabis-infused cold brew coffee and chocolate- coated coffee beans and goji berries, is carving out a niche in the infused beverage market. To succeed, the company: • Uses double-distilled concentrate and nanoemulsions to deliver a consistent product. • Sources high-quality ingredients from reputable local suppliers, a move that has generated valuable media coverage and new sales leads. • Focuses on the ethics of its supply chain. • Establishes direct-trade relation- ships with the farmers who grow the coffee and cacao beans the company uses.

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