Marijuana Business Magazine May-June 2019

Marijuana Business Magazine | May-June 2019 60 their shelf life and means dispensaries don’t need special infrastructure such as refrigerators to stock them, said Malmuth at Atlas. Betting on Hemp-Derived CBD Products There is an increase in the number of CBD-only ingestible products or ingestibles that have higher CBD-to- THC ratios, said Liz Connors, Headset’s director of analytics. Those products tend to be sold at a higher price point, making them an attractive play and a good strategy for growth. Some brands also are capitalizing on the 2018 Farm Bill, which removed hemp from the Controlled Substances Act and legalized cannabis plants up to 0.3% THC. That, in turn, has prompted some infused product manufacturers to start selling hemp-derived CBD creams, bev- erages and edibles through e-commerce platforms, despite some legal uncertainty surrounding online sales. Some man- ufacturers are shipping those products across state lines and internationally, giving them an ability to expand their brands’ footprints without using contract manufacturing agreements. While this is a strategy for growth and gives compa- nies the ability to generate new revenue, experts cautioned it is important to con- sult with a lawyer before proceeding. Examples include Mr. Moxey’s Mints, which ships its CBD-only mints to the United Kingdom and much of the United States. Tukan, meanwhile, ships its CBD beverages to 40 states. Tukan’s Crane said companies that ship CBD products across state lines should closely monitor regulations that could put them at risk of breaking an individual state’s rules. “We have an obligation to be respon- sible actors,” Crane said. “We’re seeing • There was significant growth last year in the number of microdose products and the number of packages with less than the maximum allowed amount of THC, noted Headset’s Liz Connors. • Microdose products frequently top the list of best-selling products, so a brand with a product suite that includes maximum- and low-dose products is likely to appeal to more consumers. • There will always be a market for maximum-dose products, Connors said. Similar to other consumer packaged goods, consumers care about price relative to quantity—or, in this case, potency. 0 5% 11% 16% 21% 27% 32% Jan 18 Feb 18 Mar 18 Apr 18 May 18 Jun 18 Jul 18 Aug 18 Sep 18 Oct 18 Nov 18 Dec 18 Jan 19 Feb 19 Beverages Edibles Micro-Dose Products as a % of Category Sales TAKEAWAYS MICRODOSE PRODUCTS AS A PERCENTAGE OF CATEGORY SALES Products Source: Headset Microdose is defined as a product with 5 milligrams or less per serving. (Only about 50% of products in our data have serving size, so this analysis includes only those products.) Beverages 0 5% 11% 16% 21% 27% 32% Jan 18 Feb 18 Mar 18 Apr 18 May 18 Jun 18 Jul 18 Aug 18 Sep 18 Oct 18 Nov 18 Dec 18 Jan 19 Feb 19 Beverages Edibles Micr -Dose Product s a % of Category Sales 0 5% 11% 16% 21% 27% 32% Jan 18 Feb 18 Mar 18 Apr 18 May 18 Jun 18 Jul 18 Aug 18 Sep 18 Oct 18 Nov 18 Dec 18 Jan 19 Feb 19 Beverag Edibles Micro-Dose Products as a % of Category Sales Edibles

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