Coda Signature is a leading cannabis edibles company that has won countless awards for their creations. Founded in 2015 in Trinidad, Colorado, a small town just north of the New Mexico border, the women-led company has since become a fixture of the infused products market. Coda Signature prides itself on its innovative lens, focusing on what consumers want and framing their products around a luxury experience.
Lauren Gockley co-founded the brand in 2015 after a 20-year culinary career that started with professional training in France, working in Michelin-starred restaurants and Parisian pastry shops. They launched their first line of products in March of 2016 and three weeks later, the awards started coming in. Today, the company is a leader in the cannabis industry and constantly raising the bar. Last year they rolled out products with nanoemulsions, offering fast-acting edibles with a shortened onset time. In May of this year, Coda Signature debuted their low dose Fruit Notes, their foray into microdose formulations.
We caught up with Lauren Gockley to see what inspires her, hear the story of how the business came to be and get some insights on what’s next for the cannabis space.
Cannabis Industry Journal: I saw that you have a culinary background. Can you tell me about your background and how you got involved in the cannabis industry?
Lauren Gockley: I have been working in the culinary world for almost 20 years. I have been blessed to have a wealth of different experiences from my professional training in France at Valrhona’s L’Ecole Du Grand Chocolat and the Parisian pastry shops of Pierre Hermé, to the fine dining restaurants of Jean-Georges Vongerichten and Thomas Keller. I also spent several years as a raw vegan chocolatier where I gained a totally new understanding of chocolate and flavor creation using unconventional ingredients.
The transition into cannabis was an unexpected turn in my culinary career, especially considering the level of acceptance of cannabis in its early legalization period. I had been living in New York for almost eight years. I was working two jobs and trying to start a chocolate business. One night, my partner (and fellow co-founder), Brien Sauchelli, brought over a cannabis chocolate bar. At the time, I was not terribly familiar with cannabis edibles, but I sure was familiar with chocolate! I tasted the chocolate bar, and thought, “this tastes pretty good, but what if I could do it better?” The idea of elevating the cannabis edibles experience to the same caliber of excellence that we revere food made so much sense.
CIJ: Tell us how you co-founded and started Coda Signature. I’d like to hear the origin story
Lauren: Well, like so many cannapreneurs, I started in my kitchen with a crockpot, a Ziploc bag of trim and a massive amount of research. Fast-forward a few months to March 2015, and my partner and I are traveling across the country to Trinidad, Colorado—the new home of Coda Signature. Once unpacked, we dedicated almost a full year to product development, raw material sourcing, packaging design, facility construction, and most importantly we defined the mission, vision and core values of Coda Signature. One of our most significant core values is legacy. This was not meant to be an aspirational statement about the impact we hoped to have many years into the future, but rather an opportunity for us in every moment to ask, “What will my legacy be today?” We launched our first products in March of 2016. Three weeks later, we won the High Times Cannabis Cup for Best Edible with our Crescendo truffle collection.
CIJ: Your job title is Chief Innovation Officer – How is your company innovating the cannabis product space? What does your day-to-day look like?
Lauren: When it comes to innovation, we have identified four key areas of focus for Coda Signature products:
1) Flavor. We are leaning into our brand legacy of bold flavors and aromas, quality ingredients and impeccable craftsmanship. This legacy is reinforced by industry data. According to BDSA Trending Consumer Insights, flavor is the No. 1 driver of consumer purchase decisions, and second is brand loyalty.
2) Microdosing. According to BDSA Consumer Research, 73% of adults nationwide are now “bought in” to consuming cannabis. Understanding that much of this population is still getting acquainted with cannabis-infused products, we believe strongly that microdosed products are an essential factor for safe and customized experiences. We are one of the few infused products companies to defy the industry “standard serving size” with our new 1mg THC Fruit Notes.
3) Minor cannabinoids. We define the Coda experience through the integration of minor cannabinoids such as CBN, CBG, CBC and most recently THCV. This is no longer a market solely driven by milligrams of THC per dollar. Products innovating with minor cannabinoids are rapidly taking top-selling positions in both brand share and the market as a whole.
4) Fast-acting. After two years of intense R&D, Coda launched our first “Fast Acting” products in Q3 of 2021. “Fast Acting” decreases not only the onset time from 1-2 hours to 15-20 minutes, but also shortens the overall duration. This technology is a strong example of the incredible innovation redefining the cannabis edibles experience.
To answer your second question: My day-to-day is a blend of hands-on product creation; ongoing research into industry trends and new technologies; working with my colleagues in operations, quality and compliance to ensure our systems and procedures continue to deliver safe and consistent products; brand development and expansion; and of course, eating a lot of chocolate! The past few weeks have been particularly exciting for me as I have been back in the kitchen revitalizing our signature truffles that will be returning this holiday season.
CIJ: Where do you think cannabis will innovate next? What excites you about the future of product innovation in this market?
Lauren: Innovation in the cannabis industry can be particularly challenging due to the ongoing legalization limitations. However, like most life forms in nature, it is through limitations that we adapt, grow stronger and defy expectations. The fact that 73% of adults nationwide are open to the idea of cannabis means that we are just scratching the surface of innovation with this incredibly powerful plant.
Post-pandemic, I think a lot about our social habits. As a chef, there is a level of social intimacy I identify with food that I feel is not fully present in cannabis. I get very excited about the opportunities for more open cannabis consumption and how that will elevate and inspire the Coda product experience.
Hangovers are one of the aftereffects often experienced with spirits. Who doesn’t love a good martini or a refreshing margarita? One company is on a mission bring the flavor profile and buzz of spirited drinks without the negative consequences.
Like this article and want to see more? Subscribe to our free newsletter hereMXXN is a California-based cannabis infused beverage manufacturer specializing in 1:1 non-alcoholic replacements for everyone’s favorite spirits, enhanced with a touch of cannabis. By combining new technology in cannabis oil nano emulsions and alt-alcohol, MXXN is able to create flavor matching spirits sold by the 750 mL bottle. MXXN recently launched with three product SKUs including London Dry (gin), Jalisco Agave (tequila) and Kentucky Oak (bourbon) with a rum replacement due to launch soon.
We caught up with Darnell Smith, founder & CEO of MXXN, to ask about the technology going into infused non-alcoholic spirits, regulatory challenges and more. Prior to MXXN, Darnell was a spirits industry veteran, having worked with companies including Diageo, Pernod-Ricard and Bacardi.
Aaron Green: Darnell, nice to meet you. How did you get involved in the cannabis industry?
Darnell Smith: For me, it wasn’t something that was premeditated, in a sense. I had always been a cannabis user in my adult life. I played Division I sports. Cannabis replaced a lot of painkillers and medications that I probably would have had to take just to cope with athletic injuries. That’s how I got introduced to cannabis. And there is the recreational use of it as well.
To get to the origin story of MXXN, I spent a large part of my career working in spirits, namely, on the innovation and commercialization side of bringing new products to market under very well-known trademarks for large multinational companies. A few years into it, my liver was kind of at a point where it was like, “It’s gonna be you or me here, buddy.” So, I made the decision to start making – this is 15 years ago, in New York – a tincture where I would just heat up flower and decarb it and soak it in a high proof spirit. I would cover it for 30 days then strain it and have my tincture.
I’d be the guy in the bar, that would say “Hey, can I get a tonic and lime?” and I would put three drops of my tincture in there, and I would session cocktails along with everyone else. Next day at work, I’m the guy that’s bright-eyed and bushy-tailed and everyone else is kind of feeling a little bit weathered by that alcohol.
Innovation is usually born out of a personal need and that’s the same way here. So, fast forward 15 years and the technology has finally caught up. The rise of non-alcoholic spirits, the rise of cannabis and water-soluble emulsification, those two things combined really made the light bulb go off and say now is the time to offer this product. I feel like MXXN has a very specific place in our consumption of beverages and can fill a unique need that I think is rising.
Green: I’m interested in learning about the technology and the product. We can start with the technology that went into the product development process. I’ll go on to product next.
Smith: From a technical standpoint, up until a few years ago, the way that edibles were made was basically like raw extraction. There was very little ability to be precise about dosage. It was like trying to throw softballs through a chain-link fence. Non-uniformity made it very hard to say, “Here’s how this is going to affect you.” Fast forward and companies like Vertosa and Source have perfected this kind of nano-emulsion technology, which is basically water-suspended cannabis that can uniformly be used in food, beverage and cosmetic applications. And it’s akin to trying to throw sand through a chain-link fence. It’s just much smaller. It can remain more uniform, and thereby be more predictable in terms of dosage and effect.
So, that technology made it possible for us to then combine it with another wave that’s happening, which in the spirits industry is called alt-alcohol. What we do is distill all the flavor essences of well-known spirits and skip the alcohol. We then add the emulsified cannabis in place of the alcohol. And so with that, we offer a new kind of experience which is basically all the buzz but none of the booze. That’s really where technology-wise things have evolved. The rise of the non-alcoholic spirits and then the rise of being able to do water-soluble compatible cannabinoid emulsions.
Green: Are you selling this then as packaged goods or are you selling it as bladders similar to Coca-Cola in a bar setting?
Smith: This is a CPG packaged product and it really is analogous to a 750 ML spirits bottle similar to Tito’s or Grey Goose. The form factor is the same as spirits bottles, same 750 ML bottle. It doses just like a spirit would. Standard spirit pour is an ounce and a half. For us, an ounce and a half shot has six milligrams of THC.
For the average consumer, you can session cocktails and we give you the option to dose between two and six milligrams between a half ounce and an ounce and a half pour. So, it’s very analogous to what people are experienced in when it comes to spirits from the bottle to the dosage and to the actual recipes. We pride ourselves on being able to demystify something that has been a little bit complex in terms of making cannabis-infused cocktails. We are sticking close to what people are familiar with. People have a lot of experience with tequila or gin or bourbon and so we wanted to stay very familiar but also give people a chance to make the same recipes but sans alcohol.
Green: What kind of flavor profiles are you launching with?
Smith: We’re launching with three SKUs. Our first is London Dry, which is our take on a gin and that one has cucumber, juniper, coriander, and a nice peppery finish. We have Jalisco Agave, which is our take on a tequila or Mezcal. You have notes of agave, flint, salt, oak, and vanilla. And then the last one is Kentucky Oak, which is our version of a bourbon or whiskey. There you have charred oak, vanilla, and other flavor components that make up what bourbon is.
Now we have a rum in development that’s nearing the end of a robust R&D pipeline. We have some other options like ready-to-drink cocktails made with MXXN to more high-dose products for what we consider the “legacy consumer” who is maybe more medically inclined in the hopes of being able to give people more options when it comes to consumption of flavored spirits.
Green: On the cannabis side, with the infusions that you’re doing, is it pure THC or are you doing full spectrum?
Smith: Yes, full-spectrum cannabinoid. You’ll notice some beverage brands have what we consider a hybrid, some THC and some CBD. For us, and for the effects that we wanted to have the product to have we stuck with a THC-forward blend. There is a trace of CBD in there, but we don’t even claim it. It’s not something that we go forward with. Our emulsion is THC-based.
Green: Where are you at today in terms of the launch and presence?
Smith: We just finished a pilot test here in California. We started late-January, early-February and we’ve been selling direct-to-consumer. Just order and you can have it at your door in 24 hours for about 85% of the state. We’ve blown through our entire pilot run. Now we are entering into what we consider our launch phase which will be available in select retailers late-July. We are gearing up for our next big production run here in mid-July. We are basically all systems go.
At the same time, we’re exploring multi-state expansion. We have a lot of interest in states like Colorado, Nevada, Arizona and we’re having constant conversations with partners in those states to help bring the product to market.
Green: Have you looked at lounges?
Smith: Lounges have been our biggest traction as we start the retail rollout. We literally just started the dispensary piece of what we’re doing last month. And this is by design. First, we wanted to go direct-to-consumers for proof of concept to make sure we weren’t, you know, saying the story to ourselves. I think just by the performance of the pilot run and direct-to-consumer sales, we proved okay, this is a viable concept.
So as we go out, our number one targets are obviously establishments that also are connected to or have connections with a consumption lounge. There aren’t a ton at this point. They’re still kind of proliferating. But I will tell you the moment we walk into one of these accounts is like a no-brainer because it allows this account to offer a whole new experience. When it comes to consumption lounges in terms of great cocktails you already know: gin and tonics, margaritas, paloma, with no real education required on the part of who’s ever going to be serving. We basically take 20 retailers a month in chunks and so far of the 15-20 that we’ve done, four or five of them have consumption lounges and you’ll see it in those very soon.
Green: Are there any challenges there with dosing in a lounge where the onus is on the operator to dose? How do the regulations work there?
Smith: It’s similar to alcohol, right? As an establishment, you have a responsibility to kind of pay attention to what’s happening as the consumer is consuming. Typically, most of the legislation that was written is for an inhaled consumption lounge. Ingestibles weren’t necessarily considered heavily when it came to legislation. What we tell folks is you have the same responsibilities you would if you were a bartender. Our recommended pour in consumption lounges is a lighter dose. This way, the customer has a chance to start low and go slow, and really recognize how it’s going to affect them.
Legally, there is no firm guidance on what overconsumption looks like for the typical consumer. So, we tell folks you have to kind of get a feel for who the consumer is. If they’re curious person who doesn’t have a lot of experience with cannabis, we typically recommend not to exceed a five-milligram serve per sitting until you figure out how it’s going to affect them. However, if you have very high dose legacy consumers, who buy and drink these 100-milligram single-serve bottles it’s a different story. You kind of need to gauge that from consumer to consumer, and what their tolerance level is. A lot of onus is on the consumption lounge. And I think that’s why they’ve kind of been slow to really roll out how they deal with beverages, because it’s just a different beast. It’s absorbed differently by the body from inhalable products
Green: What trends are you looking at in the industry?
Smith: I love seeing more food-based options. Edibles to this point have been mostly candies and gummies and I see the trend going to more high-end, curated food selections. I think that’s super interesting. The condiments that go into cooking is a category that I’m keeping an eye on. I came across a THC and CBD-infused Siracha sauce the other day and I was like, “wow, this is fantastic!”
In the beverage space, there continues to be innovation, which we are on the forefront of. There’s a point of saturation that’s going to come for how many seltzers can exist in the market at the same time. And I think we’re kind of reaching that point. So, it’s going to be incumbent upon the beverage space to continue to innovate.
I’m also watching where things go with hemp-derived THC, the Delta-8s and those things and how is that going to be dealt with when it comes to the legal market. I think you see varying ways that it’s being dealt with across states. That’s a trend I’m certainly keeping an eye on as things continue to roll out across the country.
Green: What, in your personal life or in cannabis are you most interested in learning about?
Smith: Given where the world is today, I feel like we all live in this “OR” mindset. It’s either you OR me, it’s either this OR that. And I think you can see with some of the more recent political things that have happened, it’s this ideology of like, trying to force your beliefs on someone else. For me, it’s more about like, how can we learn to live more in the “AND” right? You can have this AND this and they can coexist, and they don’t have to be in competition. In my personal life, that’s where a lot of my energy is going. How do I spread that thought of getting out of this living in OR. We must move to this kind of mindset of AND. How can we be accommodating for a bunch of different beliefs, a bunch of different approaches? It causes so much friction when we try to impose beliefs on others that may not share the same beliefs.
I am thinking about how I can apply that to the cannabis industry as well. In terms of federal legalization versus state, where can we find that the happy ground? If we think about going across state lines, that’s effectively building a whole other business in the state, and in virtually no other industry does that exist. I can tell you economically this country could use infusion of cannabis to be more freely available. So those are the types of things that keep me moving these days. I’ve had a lot of success in my past and so for me, it’s less about financial achievements, and it’s more about how we can help move folks to this is AND mentality and not everything has to be OR.
Cannabis products and medicines are progressing rapidly, eating away at the market share of smokable flower. Currently, the general adult use cannabis market is split in three, in order of popularity: cannabis flower, vaporizers and ingestible products like edibles or capsules. In the medical market, flower is increasingly being replaced by alternative methods of delivery – and the same trend is now starting to be seen in the adult use market.
This is to be expected to some extent. Initially, only flower was available to medical cannabis users. On top of not everyone feeling comfortable with smoking, inhaling a combustible substance into the lungs is not the healthiest consumption method for those already suffering from a serious illness.
In the present day, there are new alternatives to smoking that come without the risk and actually have additional benefits. For example, there are now much more precise ways to measure your cannabinoid intake than weighing out the flower you’re about to burn. As technology develops, there is an expectation that – despite flower sales being fairly stable last year – we will see continued incremental growth in the non-flower category, especially on the medical side.
Oral Cannabinoid Delivery
Thankfully for those who want to use non-smokable products, there are a growing number of alternative oral products that are currently available in the market or are under development.
Cannabis edibles might be the first products to come to mind when you think about non-smokable products – but for many medicinal users, these are actually a fairly unpopular option. While having a cannabis-infused brownie or gummy might be quite discreet compared to smoking a joint, the need for patients to take in extra sugar or extra calories every time they need to take their medicine can be off-putting. Additionally, tradionally infused edibles can take between one to three hours to feel as the body needs time to digest.
Cannabinoid capsules or pills have recently emerged as an equally discreet alternative to edibles. These pills come in many forms, including hard capsules containing ground cannabis flower, softgel capsules containing measured doses of cannabis extract, and gelatin-free alternatives. Though these pills, like edibles themselves, do come with a relatively long onset time.
Pills and edibles are also both affected by first-pass metabolism. This means that the active cannabinoids will be processed through the digestive system and the liver before passing onto the brain or the other organs. During this process, some amount of CBD or THC will likely be broken down by the body before it can make its effect felt, leading to inaccuracies between the labelled dose of a product and the active dose that reaches the brain or target area in the body.
To avoid these problems with first-pass metabolism, some have turned to use sublingual cannabis oils and tinctures. By placing a measured dose of oil under the tongue using a dropper, this theoretically allows for the fast absorption of THC or CBD into the bloodstream without the product being processed by the digestive system. However, in practice, these sublingual tinctures need to be held under the tongue for around ten minutes before they are fully absorbed. This is fairly difficult to do without accidentally swallowing some amount of the tincture, and so this still introduces some amount of uncertainty with dosing.
Fast-acting absorption techniques and nano emulsions are also gaining in popularity. Nanotechnologies and techniques have been developed by many firms, and boast claims of increasing absorption through the digestive system in order to effectively double the volume of cannabinoids absorbed into the body. Nano emulsions are also promising, which come with claims of up to four to five times more improved absorption. Such technologies rely on cannabis oils being immiscible with water-based substances, and process these cannabis oils in such a way that they become nanoscale droplets suspended in a larger mixture. Because of their size, these small pockets of cannabis oil are able to be absorbed rapidly through the gastrointestinal tract and into the bloodstream.
Older liposomal and newer nano-liposomal combinations have also boasted similar claims. Liposomes are commonly used as a novel drug delivery system for pharmaceutical products to facilitate the absorption of drugs into the body, and the adaption of such techniques for the cannabis sector is also intended to dramatically improve the absorption of cannabinoids into the bloodstream. Given the marketing of these products, it can become confusing to know which is the best. The only way to know for sure is to have either a breath or blood analysis to see which style works and is best for the individual consumer.
As manufacturers progress from flower and basic products, the largest brands and more advanced medical companies are all producing ingestible products with fast absorption methods and additives. The difference is pronounced and significant enough that consumers and patients are starting to demand fast absorption products. As the market becomes more educated, you can expect that the market for fast absorption ingestible products will greatly outpace the older, more basic formulations. Of course, some emulsion additives will increase the operating costs for businesses, but over time, this difference will likely be fairly minimal.
Microencapsulation to boost cannabinoid absorption
Microencapsulation is another new method for producing drugs with high bioavailabilities, and the technique has recently made headlines in the cannabis industry.
Using a technique known as ionic gelation, or ionotropic gelation, scientists are able to trap drugs inside nano- or microscale capsules. These tiny capsules are robust enough to be able to protect the active drug ingredient–which in this case would be CBD or another cannabinoid–against the harsh environment of the gastrointestinal tract without necessarily limiting bioavailability.
Unlike the other oral dosing methods, cannabinoid microcapsules are not yet a commercially available product. However, there is early research indicating that this drug delivery technology could be a significant step forward in terms of improving cannabinoid bioavailability and absorption.
Published in the journal PLOS One, a new study from a team of Australian scientists reports that CBD microcapsules used in combination with a permeation-modifying bile acid can boost the peak concentration of CBD reaching the brain by 300 percent. These peak concentrations of CBD in the body also happened much earlier with the CBD microcapsules than with regular CBD oil, reflecting a faster absorption by the body.
This improved absorption and bioavailability addresses many of the limitations seen with traditional oral cannabinoid delivery. However, there is still potentially a very long road before these microcapsules are approved for general use in humans, making them an unrealistic option at present.
Metered Dose Inhalers
So far as innovative cannabis dosing technology that is currently available on the market goes, metered dose inhalers lead the way. Making up one-third of the market share, these devices are easy to use, discreet and are far less invasive than burning cannabis flower.
Heating and vaporizing a purified cannabinoid also exposes the user to fewer potentially harmful combustion products than smoking flower. Using vapes, manufacturers are also able to adjust the formulation of vape oils in order to deliver a truly consistent product. This can help the consumer to truly measure their intake of beneficial cannabinoids.
Vaporizers for general adult use are very common now and come in many forms and flavors. Until recently though, there were very few vaporizers that met the specific needs of the medical market, like being able to deliver very controlled doses of cannabinoids. Now, innovation in the sector has led to a number of companies developing special metered dose inhalers for this purpose. These devices use smart technology to only heat and vaporize a pre-set controlled dose of cannabis oil from their compatible cartridges, allowing for intake to be tracked more precisely. This is different from regular vapes, where the amount inhaled can vary depending on how deeply a person inhales, or other environmental factors.
Recently, Syqe Medical received approval from Health Canada for their metered dose cannabis vaporizer. There is already a similar registration for approval in the US and Europe that looks promising for similar devices.
Recreational acceptance of products, like these high-tech vaporizers, drives up spending on innovations that would otherwise just be novel ideas. The cannabis industry has a wealth of creative talent, and with the market beginning to tear away from flower and towards novel and innovative products, like vaporizers and fast acting ingestible products, now is the time for the medical market to invest in this talent and follow the demand and the money.
Federal legalization of adult use cannabis is still out there as a potential, but ultimately, there are no guarantees that come with such a move. Further, even with legalization, the state-to-state variations in regulations for everything from cultivation standards to packaging and transportation will make marketing country-wide a difficult proposition for most cannabis businesses. The businesses that will grow and thrive will be ones that embrace trends and opportunities that are on the horizon for 2022 and beyond.
Economic resilience even in challenging times
Large scale companies are dealing with the issue of state-to-state differences in regulations by building branded verticals in each state: from growing to packaging, as well as building stores, in order to avoid the issue altogether. It’s an expensive proposition that is out of reach for the smaller entrepreneur, but it creates an almost regulation-proof setup for these organizations.
One interesting trend that would never have been as clear if the pandemic had not occurred is that cannabis is being generally viewed as a recession-proof industry. The pandemic has put the same types of constraints on consumer activity as a recession does and the results are clear: people are still interested, perhaps more so, in cannabis-related products and will choose to continue using them, even in times of restraint.
This economic resilience has also encouraged the growth of investment opportunities in the cannabis industry. ETFs (exchange-traded funds) that cover the industry are growing in number, as more cannabis related businesses grow in size and go public.
While banking through traditional institutions will continue to be difficult for cannabis businesses, pending federal legalization, there is a lot of money being funneled into the industry, through venture capital and angel investments. There is no question that it is still a growth industry now, and into the next decade.
Now more than ever, cannabis has gone mainstream. The medical uses for it in terms of stress reduction, mental health and so on, have built up markets that might have otherwise looked to more traditional pharmaceutical options. There is an interesting portion of this new mainstream market that is interested in the therapeutic effects of cannabis but not in the traditional consumption method of smoking. In addition to wanting to avoid inhaling smoke, this same section of the market is acutely aware of what they put into their bodies and what impacts their choices have on the environment at large. The result? Organic, ethically sourced and developed cannabis products are becoming more and more the norm.
Products that include oils, tinctures, topicals and edibles are all within the scope of what the discerning cannabis consumer is looking for. The only downfall for many of these types of products, versus a smokable, is the effectiveness of the THC. For example, edibles can take upwards of an hour to produce any psychoactive effects. That limits the function of these types of products, so the next generation of these requires technological innovation to find a solution to that limitation, such as nano emulsions.
For example, we have innovated by leveraging technology that reduces THC particles to a nano size and creates a barrier around the particle so that they can be absorbed into the bloodstream, bypassing the neutralizing effects of the digestive system. This effectively creates edibles that produce a high that is comparable to what can be obtained by smoking a joint, therefore solving the issue that edibles have had in the past.
Multinational growth opportunities
With the inability to export from the US to other growing markets, there is the opportunity for cannabis companies to expand as multinationals. Growing and marketing cannabis products elsewhere and exporting to other countries that will accept the imports, is a big opportunity. To use an existing example, Uganda has established a government sponsored program to produce and export medical cannabis to Germany. This is an important change that has other countries in particular watching to see how this evolves. Certainly, from the point of view of local economic development, it’s too good an option to ignore.
We are partnering with a chain of medical clinics in Tanzania—“Your Local Clinic”—to provide local medical practitioners with the ability to prescribe medical cannabis, once legalization is realized. This is the first step in a longer term plan that will allow us to build up legal exports to Europe.
Export to the European Union (EU) is expected to grow dramatically by 2025, leaving plenty of expansion opportunities for US companies to take their growing practices, as well as available technology for irrigation, to the next level, via Africa and potentially even Latin America.
Natural cannabinoid distillates and isolates are hydrophobic oils and solids, meaning that they do not mix well with water and are poorly absorbed in the human body after consumption. Cannabinoid oils can be formulated into emulsions to form a fine suspension in water to modulate bioavailability, stability and flavor.
Happy Chance is a cannabis infused products company offering better-for-you products to their customers. Happy Chance recently launched a low-glycemic index fruit bite line made from fresh ingredients, distinguishing them from traditional gummies. Splash Nano is a cannabis infused products ingredients company specializing in nano emulsions. Happy Chance utilizes Splash Nano technology in their fruit bites formulations.
We spoke with Katherine Knowlton, founder of Happy Chance, and Kalon Baird, co-founder and CTO of Splash Nano to learn more about their products and how they came to do business together. Prior to Happy Chance, Knowlton worked as a chef. Prior to Splash Nano, Baird was a consultant to the cannabis industry.
Aaron Green: Katherine, how did you get involved in the cannabis industry?
Katherine Knowlton: I am a chef by trade. I went to culinary school in 2015. My partner also got into the cannabis space in 2017, which was right around the time when adult use cannabis became legal in California. As a chef, I am very passionate about cooking for optimal health and well-being. I noticed right away the abundance of candy- and sugar-laden products on the market. I set out to create a wellness driven product blending healthy, whole foods with a better value proposition, better-for-you and better-for-the-planet.
Green: Okay, great. Kalon, same question: how did you get involved in the cannabis industry?
Kalon Baird: I left a corporate job in 2011 and started cultivating in Southern California. I started to develop techniques for horticulture and developed a connection with the plant. I was a consultant for many years, and then decided to take a different path when legalization happened and got into the regulated manufacturing space. My goal was to bring new products to market to help satiate the demand for the infused category, the non-smokeable categories and to pursue niche product development.
Green: Tell me about your recent product development interests?
Baird: We’re interested in the research that comes out regarding cannabis minor constituents. We work with other research labs doing two-dimensional chromatography. We’re trying to figure out what compounds exist in the plant that aren’t just the major cannabinoids, and how to work with them in a pharmacological context so that they can be standardized and replicated at scale.
So, it’s not just about making a sugary THC gummy, it’s about seeing what minor cannabinoids, what minor terpenoids and what other unknown compounds can we explore, and then put back into products.
Green: That’s 2D GC-mass spec?
Baird: Yeah, it’s GC-by-GC and tandem mass spec. There are only a couple people that make that piece of equipment. The lab that we work with on that project is called Veda scientific. They’re one of the only people in the cannabis space that uses that machine. And they’re right in our backyard. The tech enables us to further quantify terpene profiles and helps to differentiate our products.
Green: I’d like to focus first on the Splash Nano technology and then we’ll dig into how you got to know each other, and then we’ll finish off with learning more about Happy Chance. So Kalon, tell me more about Splash Nano.
Baird: We employ nano emulsion technology. It’s essentially the science of making oil and water compatible and suspended in a way that reduces droplet size. With nano emulsions, you create an interfacial layer that enhances absorption and solves technical problems like being able to make cannabis oil compatible in water-based matrices, and sometimes in non-water-based matrices. The idea is that as we spread out the particles and as we change attributes of how they’re coated, they’re more bioavailable, and you get a more consistent and faster onset experience like you would in the pharmaceutical or alcohol industry. It’s bringing the industry standard up to the consumer package level and the pharmaceutical level, so that people aren’t waiting the typical hour-long timeframe to absorb that first dose.
Green: Tell me about your business model.
Baird: When we started out in 2018, we were going for a manufacturing license. In the meantime, we saw the drink category evolving and we wanted to be a part of that conversation in that ecosystem. We started developing our own nano emulsions that we knew would be useful when we got our license. We knew that we would sell the base material to co-packers who would put them into beverages. We didn’t want to co-pack the beverages ourselves. So, we developed a drink additive that was our proof of concept that had legs for the technology so that we could show people how to use it. That proof of concept spun off and became its own product and now it’s in the market under the brand name Splash Nano and comes in four distinct product SKUS using minor cannabinoids as differentiators.
Meanwhile, our bread-and-butter business was working with smaller brands, like Happy Chance that needed a path to market but couldn’t get the license or couldn’t go through that whole rigmarole of a two-year waiting period and a half a million dollars and all the other stuff. So, we started taking on all these smaller brands effectively licensing their brand IP and their ideas. In the process, we ended up learning a ton about product development and it became kind of a passion.
We have three core revenue streams. One of them is contract manufacturing, or private labeling. The other one is our own product Splash Nano which is a drink additive. And then the last is we open sourced the technology and sell that as a business-to-business platform so that people can infuse their own products with our fast-acting emulsions. We’re working on a licensing model that will allow other states to create that same consistency, where we send a black box model out to them, and then they infuse the cannabis and then turn that into a product.
Green: Moving on to Katherine here. Tell me about Happy Chance, and how you came up with the brand concept and the product idea.
Knowlton: Going back to what I touched on earlier, many traditional edibles in the space are brownies, cookies and candy type of products that do not contribute to wellness. I wanted to give the wellness driven consumer an option in cannabis. I wanted to create a powerhouse edible that was not only functional and complete but that elevated the consumer’s experience as a whole because of the ingredients we choose and the whole cannabis we source.
I’m someone who values better-for-you products that contribute to optimal health and well-being. So, I set out to make something. I didn’t really know what I wanted to make in the beginning. I bought a dehydrator and a food processor, and I started messing around with different applications in my kitchen. Over 100 variations later, the fruit bite was born.
The fruit bite is made with dates – a natural sugar that delivers nutritional power: a low glycemic index and high in vitamins, minerals and antioxidants. A sweet you can feel great about. And we use pumpkin seeds which have a lot of great protein. We are working with a company in California that takes imperfect fruits and vegetables and upcycles that back into the food supply chain. We utilize the whole fruits and vegetables as a dried intermediate, capturing all the flavor of nutrients. No added natural flavors and nothing from concentrate.
Green: How does the consistency differ from a gummy?
Knowlton: The consistency is similar to a Lara bar or an Rx bar. Essentially, it’s that same consistency in a bite form and so it’s very different than a gummy. It’s a low dose, low sugar alternative to the modern-day gummy.
Green: So, you’ve got this healthy concept for the fruit bite. You’re looking at suppliers and technologies to infuse the product. How did you finally decide on Splash Nano?
Knowlton: I watched my partner lose his company a few years ago to a larger vertically integrated company. The MSO promised the moon and the stars, and they got lost in the weeds of their eco-system, ultimately losing their company. That said, I was very sensitive when I first started on this journey. I even took on my own partners who didn’t work out either. I spoke with a lot of manufacturers in the selection process. Splash Nano was the tenth manufacturer I spoke with.
It was a very organic way of meeting. I am also based in Santa Barbara where Splash Nano is located. My partner’s brother shared an office space with Kalon, so we met through that connection. I learned right away that Splash was founded on wellness, much like Happy Chance. It was important to source clean cannabis, an aspect that Kalon and his team take pride in. We quickly discovered that Kalon’s Splash Nano technology was going to work in my product. Happy Chance immediately found a home, and it has been an organic evolution of realistic business and friendship.
Green: Kalon, I’d love to get your perspective as well. How do you think about partnering with brands?
Baird: Because of our contract manufacturing experience, we’ve been able to touch approximately 50 brands over our three-year tenure in this space. We’ve seen kind of everything from the multi-state operator to the owner-operator and everything in between. I developed a passion for working with these smaller brands for a lot of different reasons. This industry is built on the success of small mom and pops. Yes, the multi-state operators do have a place and they absolutely add a lot of value. But at the same time, they have their own natural challenges. You have essentially a culture of employees versus a business owner that’s making a lot of their own decisions.
There are advantages to somebody like Katherine, who’s in the trenches of business, and understands the ebbs and flows and ups and downs of this industry and be able to get through some of those challenges a lot more organically and a lot more sustainably. Katherine has such a deep pulse on her business and on her customer and on her own money. She tends to make a lot more calculated decisions, and I really appreciate that.
There’s a lot of waste that gets accumulated in this industry through packaging, through bad decisions, and over extensions of capital. It’s sad to watch and you see these people that have great potential, but it’s kind of lost in this sort of the framework of a large organization. Again, I like multi-state operators, they’re great. There’s nothing wrong with them, but it’s just a different flavor. I’m trying to highlight the fact that working with somebody that has a pulse on her business, and the passion for what she’s doing is wonderful. It’s not just about making money; it’s about adding value.
Green: Katherine, talk to me about sustainability and how you’ve woven that into your product.
Knowlton: We’re dedicated to supporting Product, People and Planet. That’s the whole mission and ethos of Happy Chance. As a chef, I wanted to be intentional about where our ingredients come from. We only source organic and upcycled ingredients – an essential recipe in sustaining a healthy, eco-friendly plant. Intention and integrity are always at the forefront of our products. We prioritize partnering with more transparent supply chains. We want to show the world how cannabis can promote positive lifestyle changes that support living more actively and consciously.
To reiterate, we are also not using anything from concentrate. We are using the entire strawberry, the entire blueberry and so it encapsulates all the flavor and all the nutrition that you would have from a fresh fruit into our products.
Green: How do you think about sustainability in product packaging?
Knowlton: As far as packaging goes in this industry, we’re very limited in what we can do. Compostable packaging isn’t really available, but we have partnered with a packaging company that definitely has mindfulness at the core of their mission. They have established their entire supply chain to ensure they are focusing on green practices and reducing waste each step of the way. Their energy efficient machinery creates a zero-waste manufacturing process to reduce their carbon footprint and they utilize soy and vegan inks to help reduce air pollution by minimizing toxic emissions in the air. My hope for the industry is that as it continues to evolve, we can become less wasteful as far as packaging goes.
Green: Rapid fire questions for both of you: What trends are you following in the industry right now?
Knowlton: As a chef and coming from the CPG world, I’m passionate about health and wellness. I think that it’s important to stay on trend with what we’re seeing in CPG. There’s definitely a market as far as people wanting these better-for-you products. I want to bring that into the cannabis space.
Baird: We’re seeing the inclusion of minor cannabinoids, terpenoids, standardized recipes and faster- or slower-acting delivery systems. So, I’m following trends in advanced drug delivery systems paired with minor cannabinoids.
Green: What are you most interested in learning about?
Knowlton: I’m most interested in how I can take what I’ve learned in the food space and help bring that into the world of cannabis through Happy Chance. Ultimately cannabis is plant medicine. So, how can we educate people that the ingredients we choose to make products should be good for us too. I think that there’s a lot that can be done with it from a from a health and wellness standpoint.
Baird: I’m interested in learning more about the analytical overlay between quantifying and standardizing entheogens and plant medicines like cannabis into the product development process in CPG. I’m thinking of ways to blend the two worlds of traditional science and New Age medicine.
Green: Awesome, that concludes the interview. Thank you both, Katherine and Kalon.
Natural cannabinoid distillates and isolates are hydrophobic oils and solids, meaning that they do not mix well with water and are poorly absorbed in the human body after consumption. Cannabinoid oils can be formulated into emulsions to form a fine suspension in water to improve bioavailability, stability and flavor. Vertosa is a cannabis infused ingredients company specializing in emulsion technologies. Their technology can be found in a range of CBD and THC containing beverages found on shelves today.
We spoke with Austin Stevenson, chief innovation officer at Vertosa, to learn more about emulsification technology and some of the challenges in testing cannabis infused beverages. Stevenson joined Vertosa in 2019 after spending time as a cannabis advisor at CanopyBoulder as an entrepreneur in residence. Prior to Vertosa, Stevenson ran the hemp and CBD analytical testing laboratory business unit for Eurofins.
Aaron Green: How did you get involved in the cannabis industry?
Austin Stevenson: I got involved in the cannabis industry nearly seven years ago, when I was an advisor to an accelerator in agriculture technology in Africa. I went to the MIT Innovation Laboratory, and I saw a whole bunch of farmers cultivating green leafy vegetables in the middle of the Kalahari Desert, which piqued my curiosity. I learned that it was all done via hydroponic indoor cultivation and freight containers. I got back to the US and put my detective hat on, and learned that it was really the cannabis industry that was driving innovation in terms of indoor and sustainable agriculture. At that point, I took it as an opportunity to dive in and started, again, as an advisor at an accelerator in Colorado. From there, I’ve been on the amazing cannabis journey.
Green: And how did you get involved with Vertosa?
Stevenson: I became an advisor at CanopyBoulder to a few software companies and got on the founding team there as well as at a few cultivation companies and other license types across the supply chain. Immediately before Vertosa, I ran the business unit for hemp and CBD testing at Eurofins, one of the world’s largest analytical chemistry laboratories, specializing in Ag Pharma. My clients were your traditional retailers: CVS, Kroger. Our team analyzed thousands, maybe hundreds of thousands of SKUs of infused products.
At one point I had to tell one of my clients at Eurofins, that all of their beverage SKUs were failing potency tests. Their supplements, OTC products, some of the confections, cosmetics, were all passing, but the beverages were failing potency testing. Cannabinoid ingredients were floating to the top, sinking to the bottom, even leaching into the can liners. It just wasn’t working, so we had to tell them that those beverages could not go to market. On this same day, I happened to run into my longtime friend and business partner in the industry (now Vertosa CEO) Ben Larson at a conference in Oakland, who was running the Gateway Incubator at the time, but had met our other partner and founder, Dr. Harold Han. Ben told me, “I have this PhD chemist, a surface chemist from BioRad. He’s been experimenting with techniques, taking cannabis oils and turning them into fast acting emulsions for beverages. I’d like for you to check it out because I’m considering building a business around this.” I said, “Alright, show me the technology. Let me take it back to the lab, analyze it, verify it, and then try it. See if it works.” Lo and behold, it did. I fell in love with the product. I saw the problem firsthand at my lab and now I saw a solution, so I knew that the next part of my cannabis journey would be to join Ben and Harold in building a business together focused on being the number one technology solving the problem of stability and potency for the infused beverage market.
Green: What is the core technology of Vertosa?
Stevenson: Our focus at Vertosa is being the best delivery mechanism for cannabinoids. That means that we have a portfolio of different technologies that we’re using to take cannabis oils and turn them into fast-acting liquid emulsions, as well as powder-based APIs. When we began, we were using nano-emulsification. We are using nanotechnology in the food space, with a few different methods for creating those nano-emulsions, to infuse a diverse range of different products – everything from seltzer waters to dealcoholized wines and teas.
Green: So, it’s a portfolio of products with the basic idea of encapsulating the oil into smaller components. Can you highlight some of the challenges when you were first developing the product with testing? My assumption is that it was relatively new for testing labs. How did you support method development with them so that you are accurately reporting cannabinoid content?
Stevenson: The biggest problem that we faced at Vertosa is that there’s no one size that fits all. The chemistry of an infused seltzer water is different than the chemistry of a dealcoholized wine. The reason is because, quite literally, the ingredients are different. They’re different products. When we’re making the emulsions for these beverages, all the ingredients have to be compatible – the ingredients in the emulsion as well as the ingredients in the beverage. We’ve had to design a portfolio of different emulsions for different beverage types to ensure compatibility in any scenario, otherwise there could be instability, causing separation between the emulsion and the ingredients.
Additionally, we’ve seen challenges in the packaging type as well as the manufacturing techniques, specifically sterilization, thermal processing, chemical treatment, or the lack thereof. These three core variables (ingredients, packaging, and manufacturing technique) are where all the challenges in potency testing arise. For example, you have an infused beverage that is going to be packaged in an aluminum can. There is a polarity between cannabinoids and the can aligners that ultimately could create leaching, or an absorption type of effect.
At Eurofins, we would see beverages that were supposed to contain CBD in the can but were testing at 0 milligrams, despite manufacturers confirming that they had added the CBD. All the CBD had been absorbed into the can liner. Our teams of method development chemists and management had learned to acid rinse the can liner so that we would be able to capture the cannabinoids and identify them. That was a step that we had to learn through trial and error, and we were able to bring this over and build upon this at Vertosa.
Here at Vertosa, the biggest challenge in the lab currently is that there aren’t consistent methods for analyzing beverages. Every lab has different standards, and the instrumentation hasn’t always been calibrated. To ensure that these low dose beverages are measured properly, you have an accurate LOQ to identify the cannabinoid content. Part of the challenge is that the analytical chemistry community has only started to collaborate here recently, literally in the last few months as the AOAC made a call to action for methods for beverage.
At Vertosa, we’ve had to work together with the labs and ask if they have a method for developing beverages. It’s a three-step approach: we send a lab the oil, the emulsion, and the finished product, and ensure that the accurate cannabinoid profile is being diluted across the entire chain to make sure that each step the instrumentation has been calibrated the correct way. We want to make sure that they calibrate it into the HPLC and that the correct cannabinoid profile is always consistent in the finished product. It’s a lot of intimate hand-holding with the labs.
Green: So, you took it upon yourself to go out and get the methods validated, anticipating the need for finished goods testing with your customers and partners?
Stevenson: That’s right. From the beginning, we understood that the problems we are setting out to solve are consistent potency testing and accurate dosing. We wanted to be able to say confidently that when you work with us, you’re going to pass potency tests every time. And if you don’t, we’re going to uncover the reasons why.
For us, we have been able to provide that consistent and reliable ingredient. And yes, there’s been stumbles along the way, but those stumbles are the learnings that make us better. In the beginning, we had just one formula but the chemistries of different beverages vary too much for that to work. We also know that packaging type and manufacturing processes play a role. So, we now have a portfolio of different emulsions, such as conventional, natural, and organic, that can work with any given varibale and that have verifiable potency.
We anchor ourselves to the promise that our clients will pass potency, because that’s the biggest problem most brands have.We know the ingredients inside and out – knowing how heat plays a role, how polyphenols play a role, how oxygen plays a role, and helping the labs and our brand partners succeed while minimizing all the risk and pain that they go through with failed potency. You’d be surprised how many people are using the wrong product in formulation. A new client will come to us frustrated after adding CBD isolate powder to their beverage and seeing it fail potency tests. That’s where we’re able to come in and correct the course.
Green: Someone comes in with a magic wand. What do they solve for you?
“Efficacy research is the most interesting aspect of industry research to me.”Stevenson: If I had a magic wand, I would use it to accelerate efficacy research to validate and verify specific cannabinoids/terpene formulas for targeted effects. In other words, I’d love to have a peer-reviewed, scientifically validated cannabis formula for any desired effect, like anxiety or pain relief, aid in sleep, or increased energy, for example. At Vertosa, we’re currently investing in third party academic research to empower our clients with validated information; however, it takes a lot of time, money, and effort conducting research and clinical trials. It’s a long but essential and beneficial process!
Green: What trends are you following in the industry?
Stevenson: In the world of edibles and ingestibles, I’m extremely interested in exploring onset times and bioavailability technologies, as well as trends in ingredients. More of our clients are interested in rapid onset times so that consumers feel the effects within minutes of consumption, removing some of the stereotypical hesitation around edibles and wondering when “it’ll hit.” It’s also fascinating to explore and integrate minor cannabinoids as well as active and functional ingredients and how they interact together in an ingestible.
I’m also extremely interested in keeping up with changing regulatory policy around consumption lounges and access in recently recreational states. Open consumption lounges are a fantastic solution to further normalizing cannabis usage and decentralizing alcohol in our culture, as consumer behavior is increasingly reflecting a move away from alcohol towards more health-conscious choices.
Green: What are you most interested in learning about?
Stevenson: Efficacy research is the most interesting aspect of industry research to me. Most of us cannabis professionals are passionate about the plant, and anecdotally know how cannabis can be used to improve quality of life. However, the scientific and academic community needs to see hard evidence. As we build the industry in a post-prohibition era, there is more access to research grants to evaluate the efficacy and safety of cannabis. The National Institute of Health (NIH) has identified four (4) key areas of cannabis research eligible for grant funding: (1) cannabinoid research (2) cannabidiol research (3) endocannabinoid system, ECS research, and (4) therapeutic effects of cannabinoids. It’s the latter two, ECS and therapeutic effects, that really spark my curiosity. At VERTOSA, we’re spending a lot of time and resources with our Scientific Advisory board to help accelerate this research, and I’m personally excited about the forthcoming discoveries we make, which will help our entire industry grow and thrive!
According to a press release published this week, Quicksilver Scientific, a nanoemulsion delivery technology company, announced a partnership with Truss CBD USA, which is the joint venture between Molson Coors and HEXO Cannabis.
Quicksilver is a manufacturer of nutritional supplements that uses a patent-pending nanoemulsion delivery technology. Their technology is what enables companies to produce cannabinoid-infused beverages.
Because cannabinoids like CBD are hydrophobic, meaning they are not water-soluble, companies have to use nanoemulsion technology to infuse beverages. Without this technology, beverages with cannabinoids would have inconsistent levels of compounds and they wouldn’t work well to actually deliver the cannabinoids to the body. Nanoemulsion essentially cannabinoids water soluble, thus allowing the delivery of cannabinoids to the bloodstream, increasing bioavailability.
Dr. Christopher Shade, Ph.D., founder & CEO of Quicksilver Scientific says they have perfected their nanoemulsion technology over the past decade. “CBD is not water-soluble, which creates challenges for manufacturers when attempting to mix it into beverages,” says Dr. Shade. “Our innovative nanoemulsion technology overcomes these challenges by encapsulating nano-sized CBD particles in water-soluble spheres that can be directly added to beverages. The result is a clear, great-tasting product with greater bioavailability, a measure of a compound’s concentration that is absorbed into the body’s bloodstream.”
Quicksilver is providing their technology to be used with Veryvell, the joint venture’s new line of non-alcoholic, hemp-derived CBD beverages. The beverage line is already available in the Colorado market. According to the press release, the three product offerings include: “Focus” (grapefruit and tarragon with ginseng and guarana), “Mind & Body” (strawberry and hibiscus with ashwagandha and elderberry) and “Unwind” (blueberry and lavender flavors with ashwagandha and L-Theanine).
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