Last year was a big one for the United States cannabs market.
In November, voters in Arizona, New Jersey, South Dakota and Montana passed ballot initiatives legalizing recreational use, bringing the total to 15 states where that’s the case. Medical marijuana is legal in 36 states. As the number of potential consumers rises, cannabis alternatives are also on the move.
According to data from Seattle-based cannabis analytics firm Headset, sales of cannabis edibles grew 60% in 2020 across seven states (California, Colorado, Massachusetts, Michigan, Nevada, Oregon and Washington), from $767 million in 2019 to $1.23 billion in 2020.
The edibles share of the cannabis market increased from 10.65% in 2019 to 11.07% in 2020.
As it continues to grow, more cannabis edible manufacturers are going to need to focus on food safety and quality assurance, not to mention they’ll be joining the food supply chain, searching for ingredients and more.
“I think, quite frankly, some companies that we would typically use in food manufacturing and CPG won’t work with cannabis because their company position is: It’s federally illegal.” Jennifer Clark, senior vice president of operational excellence, Cresco Labs
All of this is further complicated by a lack of federal regulation of the market and different state-by-state requirements. The challenge for cannabis edible manufacturers is finding their footing in a competitive and new space.
Jennifer Clark, senior vice president of operational excellence at Cresco Labs, which has several sub brands that make cannabis edibles such as gummies, hard candies and chocolates, talks about her company’s focus on quality and safety, the regulatory environment and more.
QA: Why is food safety and quality important for the cannabis edibles market?
JC: At the end of the day, we want to put out a product that’s always high quality and consistent, so our consumers — in certain markets they are medical patients — can really rely on us to make sure that they’re getting the best product they can that is safe, reliable and consistent every time. I think that ensures that our brand is also protected as well. Oftentimes, state regulations in the cannabis space don’t get into the details of traditional food quality and safety. And we really want to be doing the right thing and going above and beyond what those minimum state requirements are just because it’s the right thing to do. Part of our company mission is to normalize and professionalize cannabis. And I think with that is making sure that we’re taking all those best practices because many of us come from food manufacturing.
QA: How much regulation is there?
JC: When you’re looking at less mature markets or markets that are a newer space, you don’t see a lot of the regulations regarding traditional GMPs, or what I would call manufacturing controls or food quality and safety regulations. A lot of it, quite frankly, is with regards to material management and preventing theft and diversion — making sure inventory counts are accurate. Most states definitely require independent third-party lab testing. But they don’t have traditional things like “Here’s what you need to do for cleaning and sanitization. Here’s what you need to do for allergen control.”
QA: Do you see that changing as the market grows?
JC: I’ve been with Cresco for a little over three years, and you can definitely see an evolution in this space. Especially in your more mature markets like California, which is really paving the way for where the industry needs to go. It’s not just about theft and diversion. In their regulations, they have very similar language to what you would see in GMPs. They have more language like GFSI regulations. In newer markets, like New York, some of that is actually baked into their regulations. For your cultivation practices, you have to be following GAPs, which is good agricultural practices. Or, in Michigan, you have to be following a variety of things. One of them is SQF, which is under the GFSI umbrella. I definitely see that people are becoming more aware.
QA: How does potency play into quality assurance or labeling for the cannabis edibles market?
JC: If you have something like a capsule or even a food, like a gummy product, you are dosing it to the specific label claim. So, we have a 2-milligram gummy or a 5-milligram gummy. And you really want to make sure you are manufacturing to that spec and testing it, because if someone thinks they’re taking a 2-milligram gummy, and it’s really 4 or 5, they’re going to have a different reaction that’s going to catch them off guard. And so that’s where it’s really critical when you have potency — you’re formulating to your target. The quality aspects are even more important there.
QA: Just like other food products, you need raw ingredients. How does Cresco interact with the larger supply chain?
JC: People often talk about the seed-to-sale process, but really it starts well before the seed. You need to make sure when you are purchasing ingredients or cultivation media that the people you are actually buying from are vetted. Typically for our food products, we’re trying to buy from vendors that are already GFSI-certified. But that’s not a requirement [for this market] anywhere. We want to protect our products downstream to make sure what’s coming in is already under some sort of regulated food quality and safety certification. So we always try to do GFSI-preferred suppliers. We inspect every product coming in through our quality group and do an incoming inspection to make sure it’s the right color, nothing’s broken or leaking. Before it even hits our production floor, it’s already gone through that, and we make sure that it’s OK to go before we’re introducing it into the supply chain.
QA: What’s the biggest challenge you face when it comes to quality and food safety?
JC: At the end of the day, we’re still federally illegal. I think, quite frankly, some companies that we would typically use in food manufacturing and CPG won’t work with cannabis because their company position is: It’s federally illegal. This is certainly getting better, but in terms of picking suppliers, in certain instances, there’s only limited suppliers that specifically feed into the cannabis space. Kind of along the same lines, because there are no federal standards … you’re almost guessing where it’s going to go [regulation-wise] and trying to align. But at the end of the day, you could be wrong. So I think in some ways that’s a little bit of a gray space.