CANNAINVESTOR Magazine September / October 2016 - Page 19

Infused Products & Extracts

Legalized recreational marijuana sales in Colorado and Washington have driven the market growth of infused products and extracts as many dispensaries, particularly in tourist areas, which report that edibles and extracts represent an increasing percentage of their sales. Cannabis infused products and extracts offer numerous benefits over raw flower consumption, including better taste, and increased discretion, convenience, familiarity, and ease of use.

Furthermore, due to the nascent nature of the cannabis industry, cannabis infused product manufacturers and extractors can generate competitive advantages by utilizing best practices from the food production and chemical extraction industries outside of cannabis.

When cannabis infused products and extracts first entered the market, problems such as irregular cannabinoid contents and inconsistent product composition were rampant. As the industry has continued to professionalize and mature, cannabis infused product and extract companies have become more sophisticated through the adoption of outside technologies as well as the hiring of seasoned operators. The expertise from executives and specialists from these outside industries not only helps optimize production and ensure quality control but also increases the company’s reputation and reduces operational risk if these employees bring with them track records of success. Cannabis infused products and extracts will continue to improve towards the quality and consistency of traditional food and drink, attracting additional consumers as they do.


Many companies in this sector have positioned their products in the nutraceutical and cosmetic industries. Transparency Market Research estimates the global nutraceuticals market was valued at over $165 billion in 2014 and forecasted its growth to $270 billion in 2021, while Research and Markets calculated the global cosmetic market was valued at $460 billion in 2014 and is forecasted to grow to $675 billion by 2020. Selling cannabis products through these categories allows users to take advantage of some of the plant’s benefits without necessarily having to receive a prescription, while also allowing the companies making these consumables to bring products to market without having to go through the extensive FDA approval process. The FDA has recently sent warnings to companies that have been making claims about their products that lack scientific evidence, but products that have, from the beginning, been marketed as dietary supplements and do not claim to be “intended for the use in the diagnosis, cure, mitigation, treatment, or prevention of diseases” should remain free from FDA scrutiny.