NEW YORK (MainStreet) One of the more interesting sales phenomena since the advent of Colorado's legal recreational pot market is the popularity of infused food and products delivering THC and the other 65 cannabinoids in marijuana orally.
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Products containing cannabinoids may seem like novelty items for recreational users. Medicinal users, however, have long used orally ingested forms of the drug to help further refine the intended impact and delivery efficacy.
In the last few years, the cottage industry that grew up serving this market has become a burgeoning crossover mainstream industry vertical, with "edibles" as they are called, carving out a respectable place in marijuana-related sales, even before 2014.
After the January 1 legalization in Colorado, many stores that stocked the same reported invoking strict rationing to no more than two products a day per customer. Products flew off shelves so fast that vendors reportedly feared more than a month's inventory would sell out in the first week of legal recreational sales.
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According to Joe Hodas, Chief Marketing Officer at Dixie Elixirs, the first manufacturer in Colorado to obtain an "Infused Products Retail Marijuana License" issued by the state in 2010, "The response has been overwhelming." He estimates that as much as half of the entire Colorado market may be comprised of edibles, although he also modifies this figure with a caveat that better clarity depends on longer periods to gauge sales trends.
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The Company saw about a 500% increase in sales in January.
"There was a combination of significant out of state tourism interest, limited recreational stores open and some extra enthusiasm for those who wanted to participate in the taste of freedom," Hodas said.
Dixie Elixirs started the year distributing its product to ten outlets (both medicinal and recreational). Dixie Elixirs have since expanded their distribution to close to 60 stores across the state.
According to the Arcview Market Research Group's most recent industry analysis report, The State of Legal Marijuana Markets 2nd Edition, "Alternative ingestion methods that offer consumers cannabinoid delivery formats other than smoking are one of the fastest growing segments of the cannabis industry."
For that reason, state regulators around the country are beginning to wonder how to tackle this phenomenon with few guideposts to aid their decision-making process. Despite the popularity of THC ingested via food, one of the main issues still facing this market vertical is basic regulation.
Smoked marijuana begins to have an effect on the brain within minutes. Orally ingested products create a slower acting but usually more intense "body high" that users report is particularly efficacious in combating pain and muscle spasms. The delayed effect that THC in particular can have when ingested orally, not to mention the unpredictability of dose sizes and variable compositions of products, makes commercial production and regulation at this point an approximation at best.
The accidental death of an exchange student on spring break in Colorado in mid March who jumped to his death after eating marijuana infused cookie from a legally registered Colorado pot shop, proves how unreliable the effects can be on individual users, particularly those who do not use pot regularly.
Neither the Food and Drug Administration (FDA) nor the Centers for Disease Control and Prevention (CDC) have conducted or are in a position to conduct such studies because of marijuana's Federal Schedule I classification status.
In Colorado, the law requires sales in child resistant packaging with ingredients, serving sizes and expiration dates.
Oregon, which recently reconsidered its ban of THC-laced pre-made goods as it rolls out its pharmacy program this week (in particular sweets and chocolates) will allow the same if manufacturers follow strict guidelines in terms of food shapes (none can be made in bright colors, or look like toys or candy), and packaging which is required to be opaque and "childproof."
Local vendors are already complaining about the costs of compliance. And larger suppliers, even if they support regulation as Dixie Elixirs does, also face a period of uncertainty. Per Hodas, those running Dixie Elixirs "are believers in regulation because we know that without a strong regulatory framework, the industry is at risk."
Hodas noted that the changing regulations and packaging requirements are particularly hard to predict since the issue of packaging is not uniform across product lines and thus will be challenging for the industry for some time. In the long term, however, Hodas believes that "a sensible regulatory environment will help us grow."
It appears therefore, before the smoke clears on the federal level about the classification fate of the drug itself that regulation will be left to the states for now.
--Written by Marguerite Arnold for MainStreet