Predictable Edibles: Fast Onset Innovation in Cannabis
“I think the quick-onset product opens up the category, if you will, to a lot more situations and a lot more people.” — Nancy Whiteman, Wana
When considering the overlap between CPG and Cannabis, it is the Edible category that most closely resembles traditional CPG given its predominantly confectionary form factor. In fact, in the earliest days of legalization, where most cannabis was sold almost exclusively in bulk Flower from unknown sources, the first branded packaged products were generally produced as Edibles.
Edibles have a long history within cannabis, even prior to the legalization. Everyone has their ‘brownie’ story, of having a negative experience that lasted too long and was too unpredictable. This was mostly due to inconsistent dosing and the slow onset time due to the digestive process. This stigma carries through even today, which may account for some of the reason the category trails other formats in total market share. To change perceptions, brands are looking to innovation, leveraging unique technological methods to have Edibles onset quickly, and offset a few hours later while capturing more of the traditional cannabis effects you might find in Flower. A bold claim for sure, but if true, may change the Edible category for the better.
Innovation in Edibles
The stigma around the effects of Edibles is there for good reason, and it has to do with how our bodies process cannabis differently when ingested. When eaten vs. inhaled, cannabis is processed by the liver where Delta-9 THC, which is responsible for the traditional high, is transformed into a different chemical that may result in intense psychoactive effects. With legalization a campaign of ‘start low, go slow’ was used to help new consumers not end up in a paranoid haze on the couch for hours.
Enter rule #1 of the CPG Value Creation playbook: Perfected mass-market brand building and product innovation.
Low-dose Micro-dose
Early innovation to solve this challenge was to create products with a low-dose, or micro-dose serving size of products that come in at 5mg or less. Kiva brand’s Petra mints are a great example of this, with each mint comprised of 2.5mg of THC, or Cann’s beverage which is a 2mg THC per serving product. These are great options for Edible consumers who are concerned about having too much, but easy to over consume waiting for them to take effect which may result in the same negative experience.
Fast Climb and Smooth Descent
More recently, innovation is coming in through efforts to produce fast onset products that completely upend the idea of the traditional Edible. Similar to feeling the effects of a glass of wine in 5 to 10 minutes, fast onset technology short circuits the traditional slow ramp and conversion of Delta-9 THC in your liver and provide a shorter duration high, more reminiscent of traditional cannabis formats like Flower. There are now a number of brands beginning to produce and market such products with more to be expected.
A Look at the Competitive Landscape
While brands such as 1906 were among the first to market fast onset products, we’ll be looking at a small set of newer product lines from Sunderstorm, Cannacraft and Wana that are leveraging novel technology to produce both fast acting and traditional Edibles.
Marketing and positioning
Each brand markets this format a bit differently, from “Rapid Onset” to “Fast Acting” language on packaging, to expectations around timing and effects on their respective websites. I think consumer education is key here as a first line effort to drive further awareness of the innovation that’s occurring within the category.
Sunderstorm’s Kanha Brand has a few options, including a gummy line of Edibles under the product line of Nano which come in at 5mg each. With Nano, Sunderstorm markets an onset time of 15 minutes, much faster than a traditional Edible. The packaging includes both “Rapid Onset” and “Micro-doseable” language to emphasize its unique position.
Wana’s ‘Quick’ fast onset line of gummies markets itself with cocktail branding, such as Peach Bellini. It comes in 5mg format, with 20 servings for a total package size of 100mg. It markets an even faster onset time of a minimum of 5 mins and includes duration expectations of 2 to 4 hours. In addition to the speed of onset, it also markets itself as more of a ‘cerebral high’ reminiscent of consuming traditional Flower.
Finally, Satori’s ‘Strawberries in Chocolate’ Edible also includes a mention of Fast Acting on the package and comes in at 3mg per serving, the lowest dosage of the three product lines featured here, but in a package size that is 100mg in total with 33 servings. It is also their only SKU that includes fast acting components in their line of chocolates. The ‘Fast Acting’ positioning is the least predominant on these packages.
Share of brand sales
Each brand highlighted has a different strategy and product lineup. With Sunderstorm Kanha products having the broadest line-up of fast acting to Satori having the smallest with a single product. When we look at total sales year to date, fast acting Edibles are already accounting for almost a full-third of Edible sales for the respective brands. The fast acting lineup also has some of the highest growth rates year-to-date vs. year ago (Q1 2020 vs. Q2 2020). The best selling Kanha Nano products, Passionfruit Paradise and Cran-Pomegranate punch had growth rates of 44.5% and 100.9% respectively!
Innovation comes at a price
The general cannabis consumer is often price sensitive, with a large share of sales going to relatively low priced products. Two notable factors contribute to this behavior:
- A younger demographic attracted to cannabis, like Generation Z, who may have less purchasing power
- Limited marketing opportunities that help brands to differentiate resulting in a premium price point
Looking at fast acting edibles we see a significant premium over an average Edible price. Even with the price premium, these products sell very well for the respective brands, with these fast acting products landing in the top 10 in terms of sales within the brand portfolio, and in some cases like Satori, taking the top spot.
Given the fast acting / rapid onset technology is relatively new to the cannabis industry, I believe we’ll see this price delta vs traditional edibles come down over time as the costs built in to the development of this innovative format will come down.
What to Watch For
I think all Edible brands should find ways to leverage this type of innovation to reshape perceptions and remove negative stigmas that the Edible category has had in the past. Even within the legal market, there are still risks with consumers not following the ‘start low and go slow’ mantra, consuming 100mg in a single session, which may result with the same negative effect.
The more brands that bring this fast acting format to market, the more consumers will be educated and begin to demand this type of consumption experience, creating a virtuous cycle that may end up with an entirely different Edible landscape in the years ahead where fast acting, rapid onset products are the norm, not the exception.
Things to watch for:
- What brands are next to introduce this type of innovation?
- Will the average item price premium for fast onset come down?
- Will fast acting command > 30% share of Edible sales for current brands?
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