KNOWLEDGESTREAM AT-A-GLANCE
Exploring the Emerging Trends in Cannabis Products
ABSTRACT
Opportunities and Challenges Facing Established Brands in the Emerging Recreational Cannabis Market in the U.S.
PARTICIPANTS
OBJECTIVES
1. The Cannabis Product Landscape: Understanding the various cannabis based product and business opportunities that are being created.
2. Marketing Approaches: How ethical products within these areas are and should be marketed and the claims that they will legally able to make.
3. Risk Mitigation: How established companies may be able to participate in ways that don’t compromise their reputations.
4. :
End Date: Jul 13, 2018
CONTRIBUTIONS
ACTIVITY
68 Days
5 Themes
19 Contributors
633 Posts
165 Comments
142 Followers
OUTPUTS
4 Slide Deck
5 Video
THEME #1
What is the landscape for medical and recreational cannabis products in the legalized markets in the U.S.?
THEME SUMMARY
The Recreational and Medical Cannabis Markets in the US are Relatively Young and Evolving.
- Recreational market consists of a very broad range of edible and or ingestible products with little standardization and seemingly little (if any) official oversight.
- Medical market is more strictly controlled in terms of distribution (via dispenseries) but it is not clear how product quality and other objective standards are measured and or enforced.
The Category is Getting More Professional and Less "Hippie"
Packaging is now more professional and has adapted to the user. The "hippie" style packaging is on the way out. Professional, trustworthy, clean packaging is in. This is also reflected in which dispensaries (retail store-fronts) are successful. The Caliva's of the world are eating up smaller shops.
Yelp actually has alot of specific information about Cannabis dispensaries with pictures and detailed review for both Medical and Recreational products. All the shops also seem to collect your personal information by scanning your drivers licence. I personally do not have any pictures to post.
Recreational Consumer Products Are Very Broad
Edibles – Just about any food or beverage product you can think of has a cannabis infused alternative. Most commonly used is butter or olive oil, which is then used to make things such as: brownies, cookies, candies, chocolates, etc.
I was in Colorado last month and they were saying the brewer of Blue Moon was starting to brew alcohol free beer using Cannabis. Makes sense since Cannabis and hops are related genetically.
No Real Standardization of Dosing, Claims, Quality in Recreational Category
major increase in THC containing cosmetics and vapes crossing state lines. Here in Texas, CBD oil can only be administered to epileptic children, but we see CBD oil containing products as OTCs, cosmetics, transdermals, and vapes in stores - all considered against the law in Texas.
One challenge I see is that there are a huge wide verity of product offering but very little information on dosage, potency and impact/effect of the product – which is for recreational and what is for therapeutic usage…
Medical Category is Very Different From Recreational
Chopped/Powdered materials, Powdered Botanical extracts – (carcinogens), Tinctures, Infusions, Decoctions, Fluid extracts, Solid Dose (caps and tabs), Boiling Before Use, Rectal Use, Vaginal Use, Transdermal Patches, Nasal/Inhalation, Ophthalmic, Burning,Injectable (for higher concentrations of THC)
Yelp actually has alot of specific information about Cannabis dispensaries with pictures and detailed review for both Medical and Recreational products. All the shops also seem to collect your personal information by scanning your drivers licence. I personally do not have any pictures to post.
Regulatory Landscape is Still Evolving
it would be very interesting to begin to take products introduced in the states that approved cannabis and slot them into FDA established regulatory structure. Which ones might be considered Rx, OTC, DSHEA, functional foods? Then assess their "readiness" to follow that particular regulatory path.
If it stays just food we may never learn the full potential of this possibly powerfully therapeutic 'drug'. Think of Aspirin [salicylic acid] as an analog - if ASPIRIN was not OTC then it would be one of the most valuable cardiac drugs in the world.
THEME #2
Compelling and Technically Supported Product Claims
THEME SUMMARY
Medical is leading the charge in terms of well technically supported approaches to new applications...but it is too early to tell what the FDA will and won't accept.
- Lots of companies investing in clinical studies in preparation of FDA submissions, but folks are wary of shifting political winds.
- Recreational is pretty much on its own. Some folks taking a more ethical approach to making marketing claims, but still unregulated.
- Big companies are getting involved in Canada which may prove bellwether for US prospects.
As with Most "Clinically Supported" Claims, the studies themselves can be variable.
Yes, performing clinical trials in legalized states is great, but will FDA accept it? Prior to any trial, a firm should seek FDA approval. Otherwise, FDA may not accept or even actually reject the protocol, even if data is collected - thus making the trial an expensive misstep.
Medical claims tend to be better technically supported (than recreational), but none are yet officially accepted by FDA
Recreational claims are not uniformly well technically supported.
One point to consider is as the cannabis industry moves more toward federal oversight, and even if it doesn’t, we may run into some serious challenges around claims of “natural” and various other health claims.
Many recreational brands sound like food brands, borrowing "farm to table" language, using either provenance claims, "all natural" or "craft" claims (not necessarily technical data linked to performance, but providing a quality halo):
Some big name pharma companies are getting ready to play in the medical arena
“Subject to future regulatory changes, Sandoz Canada will wholesale and distribute co-branded — Sandoz and Tilray — non-smokable/non-combustible medical cannabis products to Canadian hospitals and pharmacies.” also GW pharma which I spoke about today even Novartis
We have a few companies in non-legalized states preparing submissions to FDA using THC components for pain relief as part of the opioid reduction. FDA is expected to accept the submission. This submission will make national news. T
THEME #3
Do you feel that large companies with known brands can and should enter the medical and or recreational CBD/THC markets?
THEME SUMMARY
Large Companies Can And Will Explore Various Market Entry Scenarios
- Some large companies will seek to enter via medical channel applying rigorous therapeutic rationale/support to not face blowback.
- Some large companies seeking to enter the rec mkt will pursue therapeutic & functional (not get you high) benefits. Others may pursue getting high, but only if already in alcohol/tobacco space.
Large Companies will need to go “by the book”
I believe that if large companies who operate in the U.S. treat THC and CBD as drugs, and follow the established regulatory paths (Rx, OTC, but not supplements/DSHEA or recreational), then they can effectively capture the economic opportunity while minimizing any reputational downside
FDA Rx approval and doing it by the book is the only/optimal way to go.. I also agree that think only pharma have the revenue/investors and commercialization / go to market potential to recoup the costs to do this 'right'.
Large companies will have to be able to successfully navigate regulatory and supply chain complexities
After spending a week with FDA and joining the national cannabis committee under AFDO, we see only two possible paths for marijuana. Recreational or adult use goes out the window under regulation. Therefore, marijuana is classified as a drug.
you might have a traditional prescription that would be given for a approved NDA that would be filled by a pharmacist. I could see a large company taking over a small company that has gotten an approved NDA for a cannabis extract.
Some large companies will consider recreational channel for therapeutic benefits, others for “getting high”
Companies currently in the Alcohol/Tobacco areas would enter the recreational market and sell cannabis that gets you high but not anti-inflammatory extracts (eg.CBD).
One pathway could be topical usage vs injestible. Per an earlier comment this could be aimed at sexual health enhancement in a brand such as KY Jelly. Or add to topical sports pain reliefers may also be a less risky route. Both are more health related but more social vs illness related.
Negative stigma risk or not, large companies will at least wish to explore the market opportunities.
Large companies will eventually want to jump in, especially as more states get on board and it's no longer a "one-off" strategy. The best way to do this is through an acquisition where they can distance themselves respectfully, but benefit from the learning.
I think forward looking companies will want to get some learning on this, it's too big of a trend not to be thinking about. And now there are plenty of test market scenarios
THEME #4
What Meaningful White Space Exists For Cannabis Products in the Recreational Market Space?
THEME SUMMARY
Large (and Small Companies) Still Have Considerable Untapped Opportunities Within this Market
- Regulations as they emerge will necessitate adaption. Those companies that can do so effectively will survive and possibly thrive. The reverse is also true.
- The market is requiring increasing sophistication and knowledge in order to effectively navigate and manage through the nuances of formulating and safely and legally producing and marketing products.
Key Untapped Opportunities Remain For Large Companies
t seems to me that recreational amounts (TBD) of THC or CBC could be in liquid delivery systems, with claims such as "calming" or "sleep aid" may be viable.
Whether it relates to inventory tracking software, product packaging, facility conditions, testing requirements, or content disclosures, there is opportunity across the board when related regulations change.
Considerable Amount of Rigor/Complexity in Effectively Operating Within the Space
New, meaningful cannabis-based product opportunities exist for large companies, however require establishment of at least three pillars to be acceptable and pragmatic products.
New regulations from the Bureau of Cannabis Control state that Child Resistant Resealable Packaging is REQUIRED for all Cannabis Products. Also, pre-packaged flower (actual buds of cannabis) is required for most dispensaries depending on if they have packaging and distro licenses (many do not).
Semantics and Definitions Matter
As in any drug, vs cosmetic, vs food claim there is often a fine line between what might be considered a drug claim....I think there could some some level of risk that some companies are will to take and others will not be willing to take.
I wouldn’t call CBD use recreational ever as it infers a high or some sort of experience. As an FYI, even with cannabis use, there is a terminology shift towards “adult use” vs “recreational use” since recreational sounds like all the kids should do it for fun.
THEME #5
Supply Chain and Quality Assurance
THEME SUMMARY
States are beginning to impose regulations that are causing businesses and supply chain partners to scramble, adding steps, cost and complexity. This will invariably impact product price and supply.
- States like California, Oregon and Washington are placing stringent quality testing and other standards on products that are already disrupting operations.
- Only the largest, well funded and best organized companies will be able to accommodate these rules. Small players will likely get pushed out.
If California is setting the model for all future state supply controls, only the strong (and well funded will survive)
The regulations created a run on the 20-30 state approved labs and have been super poorly implemented. There is a lack of lab tested flower available for purchase and brands have had to shell out 100-500k on lab tests, which has crushed many small brands and made room for larger better funded ones.
In Oregon, Washington, adult use Cannabis-based products are highly regulated. Each planted seed is tracked (RFID) through plant stage to point of sale. All products sold must be lab-tested, including potency, pesticides, mold, heavy metals, toxins, etc. Untracked products are nearly impossible.
Potentially valid models already exist for the industry to regulate itself.
How could the industry establish it self with some GMPs and legitimize what it is manufacturing? One way to do so [at least in the absence of FDA approved products] is for the Cannabis industry to partner with well renowned body such as United States Pharmacopeia (USP) to set agreed to standards.
I agree with Michaela, following a DSHEA-like approach seems to me to be the logical solution for a national regulatory approach, assuming that national marketing is some day allowed. I am highly skeptical that it will be, and I suspect that this may remain a state-by-state call.