Tag Archives: formulate

Leaders in Cannabis Formulations: Part 1

By Aaron Green
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Natural cannabinoid distillates and isolates are hydrophobic oils and solids, meaning that they do not mix well with water. By formulating these ingredients using various technologies, companies like Caliper and Ripple have learned how to change the solubility properties of the cannabinoids. In addition, formulations can improve bioavailability and onset time of the cannabinoids.

Stillwater Brands is a cannabis formulation company based out of Denver, Colorado, leveraging proprietary technologies for solubilizing cannabinoids in water. Stillwater has a partnership with the Canadian company Green Organic Dutchman and will soon expand their THC line of products, Ripple, into Michigan. Their CBD product line, Caliper, is already sold nationally.

We spoke with Drew Hathaway, senior food scientist at Stillwater, about the Stillwater technology and aspirations for growth. Hathaway joined Stillwater in 2018 after engaging with them as a technical sales representative in his previous role at a food ingredients supplier.

Aaron Green: What trends are you following in the industry?

Drew Hathaway: I can mainly speak to the science side of the business since that’s where I operate, but I do have some insight into the marketing approach and some of the things we look at. We’re looking at traditional food and beverage trends, whether it’s beverage formats, with its unique ingredients that are going to be general flavor trends, which can definitely be very region-specific. One of the things we definitely look at, especially on the THC side, is dosage differences. What are people putting their dosages at? Are they doing a combination of cannabinoids or terpenes? Are they really using individual ingredients? I think that’s something that’s been fairly well established in the THC market, especially since you have the regulatory mandate of 10 milligrams THC being your max single dose.

Drew Hathaway, senior food scientist at Stillwater

When Stillwater first launched in 2016, our company started with lower dose products to provide microdose options. We focus all of our products on functional foods for consumers. It’s why we have three different options for every single one of our products. We have what we call the Pure 10 which is 10 milligrams of THC per serving. We have what we call the Balanced 5. That’s 5 milligrams THC, 5 milligrams of CBD. Then as well as our Ripple Relief, which is a 40 to one ratio of CBD to THC at 20 milligrams CBD and 0.5 milligrams THC. We provide a variety of options for people looking for different dosage levels. We have to look at all of those trends. Packaging trends are also high on our radar.

Aaron: How about flavors?

Drew: We recently launched additional SKUs for our Ripple gummies here in Colorado. We have four different options. We have a sour variety pack that contains sour watermelon, sour apple and sour peach. We also just launched peach cherry, kiwi apple and sour watermelon by itself — and all of those are at the five milligram THC per gummy dose. That aligns with the Pure 10 line as well. We also have been working on some new flavors for the 10 milligram THC quicksticks, which we’re looking to launch early next year. Then, like I mentioned earlier, we’re expanding into Michigan with the THC business, which has been a big goal for us and something that’s gotten a lot of effort behind the scenes.

Aaron: So Drew, how did you get involved at Stillwater?

Drew: I like to describe myself as a traditionally educated food scientist. I went to college and got my bachelor’s and master’s in food science and technology at Ohio State. And then I ended up at a really cool company that was a very large food ingredient supplier. I was technical support to sales for their team. Through that position, I covered the Colorado territory as well as California and I got to cover Stillwater as one of my customers providing technical advice on different products and ingredients that they were looking at. I got involved with Stillwater through that position, back in the early days when they were still trying to develop and figure things out. That would have probably been about four years ago. I was able to see from the sidelines and I was dealing with some other cannabis companies in the space here in Colorado at the time too.

I recognized very early on what they were trying to do by making cannabinoids water soluble and water compatible. It was not only extremely challenging, but also had a ton of potential if they were able to pull it off. At that point, they were still trying to figure out how this is going to work. How do we produce it? How do we sell it? How do we make sure that things are stable? Things of that nature. I got an inside look at Stillwater from the very start, back when there were really only a few people at the company. I would check in with them regularly as they needed help.

I always joked that they were my least important, most interesting customer and I mean that only because they were buying extremely small amounts of ingredients from us. From a sales perspective, naturally, my manager didn’t necessarily want me spending a ton of time working with them. From a personal interest perspective, I was like, “these guys are doing something really intriguing and if they can pull this off this has a ton of potential, so I want to help them however I can.”

I dealt with them in that sales capacity for about two years before they talked about expanding into the CBD space with the Farm Bill passing at the end of 2018. I recognized at that point that I think they had two scientists including Keith, our head of R&D, and I said “alright, that’s really ambitious. You probably need some help! I think it’s time for me to take the leap and see if you guys are interested in having me come on board.” Fortunately, they were and so I’ve been with the company a little over two years now.

Aaron: Can you explain at a high level what the Stillwater products do?

Drew: The base technology behind all of our products for Ripple and Caliper is essentially converting your fat-soluble cannabinoids, whether it’s CBD or THC, into a water compatible product in a process referred to as emulsification. What you’re essentially doing is taking CBD and THC containing oils, whether it’s a distillate or isolate, and you’re essentially breaking those fat droplets into extremely small droplets and then stabilizing them at that size. We make our own emulsion — the fat droplets are extremely small — then when you draw that down into a powder format and redissolve it into water, you are dispersing billions upon millions of fat droplets into your glass. Those droplets are evenly dispersed through the beverage so that you get the same amount of THC or CBD in your first sip that you get in the last sip. That’s really the core technology behind everything that we do.

Taking cannabinoids and making them water soluble is the base technology necessary in order to make something like a shelf-stable infused beverage. There’s no way that you’re going to take traditional distillates or cannabinoids and be able to make a beverage that is shelf-stable otherwise. It’s been really cool since joining Stillwater to learn and understand how that process changes the way that those cannabinoids are absorbed by your body. Emulsification changes things like the onset time, as well as the total amount of cannabinoids your body’s absorbing and using. That’s been something that’s super interesting to see through the clinical research that we’ve done with human participants through Colorado State University.

Aaron: Let’s say if you just take THC oil and put it into an infused product. What’s the difference between that and Ripple?

Drew: Some products formats, such as beverages, just aren’t possible with THC oil without an emulsification technology. As the old saying goes in science, water and oil just don’t mix. So, if you were to take a traditional THC distillate and try to add it to a beverage, that would just float on top as a big oil slick. When you took your first sip, you would essentially get all of the cannabinoids in your first gulp which not only makes precise or partial dosing impossible, but also would taste absolutely terrible. Emulsification makes those infused beverage products possible and stable over a normal one-year shelf life or potentially longer.

Emulsification also changes the way that your body absorbs those cannabinoids, which is something that we’ve definitely put a heavy emphasis on and have really been able to validate with clinical research. I think that’s one of our biggest differentiators versus our competitors. We’re definitely not the only ones in the water-soluble cannabinoid space, but from my understanding, I think we’re one of the few companies that have actually executed human-based clinical trials (vs rodents) through a third-party university and been able to prove that these cannabinoids are detected in your bloodstream as fast as 10 minutes after consumption. We measured those results directly against an oil-based control, where you’re not going to get a peak absorption until maybe 60 to 90 minutes after consumption. What this research found was that not only was our product absorbed much faster, but it also enabled a significantly higher amount of the cannabinoids to actually make it into the participants’ blood stream where it can be used by their bodies. We also found the type of food emulsifier makes a significant difference in absorption – not just emulsion size, counter to common belief.

We use the analogy, “It’s getting a better bang for your buck.” The main purchasing consideration for a lot of edibles consumers when you go to a dispensary is “what is my cost per 10 milligram dose of THC?” That’s one of their key purchasing parameters, especially for your lower budget customer. What’s great with Ripple is one milligram of THC consumed through our Ripple technology is not really equivalent to one milligram of an oil-based product and that your body is actually going to absorb a higher percentage of it. And therefore, you’re going to get more of an effect, whether you’re looking for a medical effect or whether you’re looking for more of a recreational therapeutic effect. It also improves the consistency of that experience. So, with oil-based products, you could have the same products multiple different times and based on what you recently ate, you might get a higher or lower absorption rate or a faster or slower absorption rate. It’s also in the consistency of the experience and I know that from our market research of our consumers of Ripple products here in Colorado since that’s been in the market for a few years now. That’s the number one reason why people really trust our brand is because they can count on getting a consistent experience every time for the same dose.

As we all know, with the THC market and edibles market being newer in general, that’s most people’s biggest fear, especially if you’re a new consumer of THC — you obviously don’t want to consume more than what you can handle as far as getting higher than you want to be or anything like that — So consistency is a really, really key aspect for us and something that I’m definitely proud that we can provide that for our consumers.

Aaron: What does your product look like when you dissolve it into a liquid – let’s say something clear? Is the resulting mixture clear or cloudy?

Drew: We do have liquid concentrates, especially in the Caliper side of things, but with our powders, it kind of billows in as a cloud when you add it to a clear liquid. You can almost think of it like when we pour creamer into coffee: you see the cloud expand and then slowly fill out the cup and then be fully mixed in. Whereas with our products if you pour it into clear water, and you’ll see this white cloud form and then disperse. The final solution is generally a little bit cloudy depending on how much water you add it to.“I’ve been fortunate to be the lead developer for those products for Caliper and for Ripple, and flavor work is definitely something that never gets old.”

Aaron: How are customers using your products?

Drew: For a long time, we’ve had a variety of products in the market, some of which are still in the market, and some of which we’ve pulled since then. The key product for us has always been the Ripple dissolvable powder. It’s an unflavored, unsweetened powder that comes in a little sachet packet that you can tear open just like you would any other product and add to really anything. With its water compatibility, there’s really not a single product that you can’t add it to. It’s been really cool to see through social media, and in general, consumer engagement is electric and is kind of viewed as a novelty. The initial reaction is “Oh, I can take this little powder, put it in my eggs and now I have infused eggs!” It’s been great to see the creativity that our consumers have. We’ve seen it put in such a wide variety of products that literally you can make anything into an edible. I think that’s one of the coolest aspects of that product and why it’s been so successful.

One of the things we did realize pretty fast is that for a lot of people, the convenience and the consistency of the experience was a main driver for why they were purchasing our products. A lot of our real consumers just take that packet apart, ripping it open and pouring it straight in their mouth. It’s the fastest and most convenient way to consume the products, pretty much anywhere. We dug into that with our more recent launch of Ripple Quicksticks. And then we added some flavor, we added a little bit of sugar and sweeteners to make it a consumer-friendly experience where you get a really enjoyable flavor. It’s still just as convenient to consume by just ripping the packet straight open and pouring it in your mouth.

Aaron: It sounds like there must have been some interesting internal product development testing!

Drew: Yeah, definitely. That’s a fun one. I’ve been fortunate to be the lead developer for those products for Caliper and for Ripple, and flavor work is definitely something that never gets old. It can be frustrating at times, it’s definitely not the easiest thing to do. We’ve looked at traditional berry flavors, citrus flavors, as well as weird, kind of out-there flavors, to see what we like and what we think will work with our consumers.

Aaron: What states do you operate in?

Drew: Currently, our Stillwater THC business only operates in Colorado. That’s essentially the genesis of all the companies (Ripple, Caliper) is Stillwater being here in Colorado. We’re excited to announce that we’re expanding to Michigan next year. That’s something that we’ve all been working pretty heavily on developing and getting ready to go. That will be our first expansion of the THC brand to a different state.

We do have a licensing and distribution agreement with The Green Organic Dutchman (TGOD) in Canada. They produce our products using the same technology up there and license also under the Ripple brand name. So, it’s great to see the presence that we’ve been able to expand up there.

Then with Caliper on the CBD side of things with Caliper Ingredients and Caliper Consumer. We operate nationwide for that based on the more recent rules with the 2018 Farm Bill. For me, especially working across all of those business units, it’s really interesting to see the different business approach between your target CBD consumers and your target THC consumers because they’re really different markets. There’s definitely some overlap, but you’re targeting a different demographic to a certain degree. We keep those decisions in mind when we’re choosing how to market and what flavors to use and what products to make. So that’s been really interesting for me to see the behind-the-scenes discussions.

Aaron: I saw on your website, you’ve got consumer options via the dispensaries. Do you work with any infused product manufacturers on a licensing basis or partnership basis?“I’m super excited to continue to see how the medical research will continue to evolve.”

Drew: I’d say the majority of them are definitely on the CBD side for Caliper, partly because the regulatory environment of CBD just is a little bit easier to kind of engage other customers and to sell products across state lines and things of that nature. We do have some partnerships with some of the companies here in Colorado. I’d say the main one that we’ve promoted externally is with Oh Hi infused Seltzers based out of Durango, Colorado. It’s been a great agreement where we provide our base technology via liquid Ripple formulation that they can then infuse into their seltzers. They’ve done a great job with those products and it’s definitely a partnership that’s been mutually beneficial.

Aaron: What are you personally interested in learning more about?

Drew: For me, the whole appeal of joining the industry was research. With prohibition and decades of those restrictions preventing true research there are so many unknown questions that still need to be investigated. I’m super excited to continue to see how the medical research will continue to evolve. I think we’ll get better clarity on the efficacy of individual cannabinoids versus different combinations and ratios of cannabinoids. The entourage effect is something that’s pretty heavily talked about in the industry. I do think there’s some research to support that. I also think there’s still way more unknowns than things that we actually know. So, I’m super interested in seeing how our understanding of everything will continue to improve over time.

I’d love to see the medical research eventually expand into what synergistic benefits exist between cannabinoids and other bioactive ingredients such as turmeric, catechins, antioxidants and other plant-based ingredients that have gotten a lot more interest through the medical research in the last decade.

Then one of the things I’m always excited about being on the science side of things is we’re still investigating the general compatibility of cannabinoids with various types of food and beverage products. That goes not only for ingredient interactions, but also factors like pH, water activity and moisture content. Even packaging definitely plays a role in cannabinoid stability for a variety of products. There’s also a variety of production processing technologies that still need additional investigation, whether you’re talking pasteurization, for beverages, or retort for canned products or newer technologies like high pressure processing (HPP). So, I think the most exciting thing for me, and the reason I was really willing and interested in joining the industry, is there’s so much to learn. I don’t think we’ll ever run out of things to explore. I think as an industry the better we conduct this research, the better off we’ll all be.

Aaron: That’s the end of the interview! Thanks Drew.

Leaders in Infused Products Manufacturing: Part 5

By Aaron Green
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Cannabis infused products manufacturing is quickly becoming a massive new market. With companies producing everything from gummies to lotions, there is a lot of room for growth as consumer data is showing a larger shift away from smokable products to ingestible or infused products.

This is the fifth and final article in a series where we interview leaders in the national infused products market. In this final piece, we talk with Lisa McClung, CEO, and Glenn Armstrong, senior advisor at Coda Signature. Lisa got started with Coda in 2019 as a board member after transitioning from an executive role at Wrigley. She now heads up the company as CEO and President. Glenn has deep experience in product development and innovation with brands such as General Mills, Whirlpool and Wrigley.

Aaron Green: Okay, great let’s get started here. So we’ll start with Lisa. How did you get involved at Coda?

Lisa McClung, CEO of Coda Signature

Lisa McClung: I was lucky. Based on my experience, I was originally asked to be on the board of Coda. I’ve served on nine company boards in addition to my career as an executive at General Electric and at the Wrigley Company where I was heavily involved with innovation. The Board then asked me to consider stepping in as CEO after I’d been working there for six months. I was just overwhelmingly complimented that they considered me and I feel incredibly lucky to be here.

Aaron: Okay, great. Glenn, how did you get involved in Coda?

Glenn Armstrong: We’ve known each other for a long time at Wrigley. I was in innovation for the confectionery side and worked very closely with Lisa. When she became a board member, she asked me to do some advising for her. Im new to the cannabis industry so, I was really excited about doing something different. When Lisa became CEO, she asked me if I would help her.

Aaron: How do you think about differentiating in the market?

Glenn: I spent 90% of my career on the innovation side working with companies like General Mills, Quaker Oats and Amway. When I think about how to differentiate almost any company I always focus on innovation. In the cannabis industry, everybody’s got gummies and chocolates but you’ll hear people talking about gummies are going away.” No, youve just got to innovate, right? It’s like the carrot peeler from 20 years ago. It used to sell for about 25 cents, and it was all steel and now they sell for $10.99. Who would have known?

Glenn Armstrong, Senior Advisor at Coda Signature

I believe anything can be innovative. When I looked at the gummies I asked, what we learned at Wrigley, can we bring into Coda that currently is not in this industry?” Think about various gums and how they can change flavors over time like Juicy Fruit which dissipates really quickly and thats just how the flavor is.

Or, there are other ways like spearmint. You can get an initial boost and then extend that flavor by encapsulations. I don’t see much of that in the cannabis industry. It’s just taking what’s out there from flavor companies that people like and getting them into this market.

Aaron: Awesome. Do you have any particular technologies or work or products from other industries that really interest you?

Glenn: I would say it’s going to be from the pharmaceutical industry. You think about THC and CBD being so hydrophobic. With chocolate, it’s not such a hard thing to get into. If you try to get those kinds of compounds into aqueous solutions though it can be a challenge, the drug industry has been doing it for years! So, to me, delving into some of their patents and some of their ideas, that’s one of the most powerful industries I see where we could utilize their technologies to advance the industry. I expect big pharma to get into this. We can start looking at what they’re doing that we can leverage quickly to get into Coda products.

Lisa: We’re not necessarily a pharmaceutical brand, but we are committed to helping people live and feel better. It really is about how you weave cannabis into everyday life?

Coda’s line of chocolate bars

We have a platform of very indulgent products, which is our chocolates ranging from truffles to bars. We also are building our non-chocolate portfolio to include other ways to enjoy cannabis in their daily life. And then to Glenn’s point, I think there’s ideas and technologies from the pharmaceutical area, theres also things that have been in the food industry for years that provides sensations and experiences.

I think part of our goal is how many of the five senses can we touch from people in creating product?” The feel of something in your mouth heating, cooling. Not just the psychoactive aspect of it, but the complete end-to-end experience.

These are all dynamics of us delivering the live and the feel” piece of it. Then people can either use them from a lifestyle perspective for enjoyment, or a medical perspective. Our job is to provide consumers choices and options that provide those type of experiences.

Glenn: If you have a product that’s supposed to “reduce anxiety” why not start with the slight warming of the mouth? Something that feels calming long before the THC or CBD kicks in? Then have a flavor come up that just feels warm and comfortable. By combining all five senses, you have a product that really does something for your consumer.

Aaron: Thanks for that! Whats your process for creating a new product at Coda?

Lisa: Well, I think everybody talks about brainstorming sessions like innovation is something that just pops up. I think innovation has three legs to it. One is really customer-driven. So, we have to produce products that help our retailers make money, and that deliver really good experiences to consumers that we jointly serve.

The second piece of it is thinking about the discipline of innovation. So, when we make a product, what technologies do we bring to bear, can we scale them, and can we produce them at the right price point and delivery?

Coda Signature Fruit Notes

Then the last piece is the fun piece, trying to listen to what is and isnt being said in the market to really try to be a solutions company.

We spend a lot of time listening and watching the market to figure out where we can anticipate things. We used to call it problem detection” at Wrigley.

One project that Glen and I worked on was a mint that was designed really around adult usage in more professional situations. So, meaning the shape of the mint needs to be tucked in your cheeks so you couldn’t see it. And the packaging of it was something you could surreptitiously pop underneath the desk because we were designing it for people to use as really a business tool. You don’t think of mints as a business tool, but they really are, they give you more confidence with breath-freshening and you don’t necessarily want to hold that out with everybody else.

Some problems are about how to make a product more fun with our fruit. I can put pineapple jalapeño in my mouth and have a literal popping experience, which adds to my enjoyment of that experience.

The last piece is not to do too many products. One of the things that I think of in cannabis is that everybody’s still learning. It’s such a wide-open space, in some cases, that you also have to kind of pick what you do well. So, sticking close to our brand and what we stand for is also something that we’re trying to do. We’ve actually pulled in our SKUs recently and are trying to focus on a platform of indulgent experiences and of lifestyle products. We try not to do everything that we see out in the market and focus only on the things that we do well that solve problems for our consumers.

Glenn: From my perspective — I am not a big process person — I think the best way to do it is to say, okay, we’ve got these products. We could look at technology, we could look at something else, but let’s just go scour what’s out there. And let’s get outside of our industry.” Look outside your own game, and see what you can use.

Discovering how to use these technologies in a gummy or chocolate as opposed to just drugs isnt rocket science. My biggest avenue is looking outside and finding what you can apply as opposed to trying to reinvent everything.

Aaron: Weve focused on the front end of innovation. Can you articulate on the back-end how that moves into product development, manufacturing and commercial launch?

Lisa: We have a new product pipeline with a Stage-Gate process where we will have a number of ideas and whittle them down on certain criteria.

Sometimes the ideas start with the technology and not the market. Glenn will find something and say, Hey, this is going on, should we be thinking about this in cannabis?” It allows our each of our teams to come up with how they can make it work.

Then, as that product passes through the next stage-gate, we’re looking at the actual economics of the product, and how it fits relative to our other products all while were getting consumer input.

We get to that point in the process when we start trialing with consumers to help decide. And sometimes you get the best idea in the world, and then it’s not going to work so in some cases so you put it back in the pantry.

I never like to say that we don’t take an idea forward, even products that we may have taken off the market, we say we freeze products, we don’t cut products!” because our goal is to have options. Our discipline is around a Stage-Gate process tied to our business goals and objectives. It’s also about playing around with concepts and seeing what materializes.

Glenn: There is this whole notion of a process, there’s a Stage-Gate, but before that, it’s a lot of playing around. What Lisa and Ive recently worked on was making innovation a way of life so that every time you see something, you say something.

“We dont think of innovation solely as the next flavor that’s going to be on the shelf.”We always gave people permission to play in the web.The reason brainstorming sessions don’t tend to work, is we expect people to become innovative in these next five hours.

So, if you think of innovation as a way of life, then it becomes what you do daily, and you look at things differently. I like to say when you’re driving home, go a different route, because you never know what you’re going to see. When you get out of that habitual mindset, you’ll think about your business differently, almost naturally. Innovation — this way of life — is one of our buzzwords.

Lisa: I think building that innovative culture is a responsibility, but also a challenge for a company like Coda. I mean, we’re not new. We’ve been around five, six years and we have some of the leading chocolate bars out there. We’re known for flavor systems.

Where our goal is to create a culture of innovation, you get these little pockets of creativity and innovation, and then it starts snowballing. You build on it, get people excited about it, and move it forward. That’s how everybody gets involved in innovation.

One of the goals of that pipeline process is to combine inspiration and discipline. But you don’t just want to be innovative in the next flavor. That isn’t doing enough for our consumers. Weve educated them on the potential flavors could bring. But now we really want to be much more innovative across the board and see what kind of culture of innovation Coda can do.

We’re looking at the packaging, how we interact with retailers, how we use digital messaging to support our retailers and support our products. We dont think of innovation solely as the next flavor that’s going to be on the shelf.

Aaron: From a supply chain perspective, how do you go about sourcing ingredients?

Lisa: We have some wonderful partners that have been with us at Coda. People that bring us chocolate from other parts of the earth.

We continue to keep building our ecosystem of partners. We look at different flavor houses and different food type researchers to be partners with us to broaden our ecosystem. It’s something that’s very much top of mind, even more so during COVID, because we’re feeling  very fragile about our supply chains.

Glenn: Yeah, I think Lisa, that’s one thing you and I bring, not only to Coda, but I think to the cannabis industry, is the whole CPG discipline of how we look at suppliers and procurement. We need to go out there find some smaller flavor labs with incredibly creative folks.

I think the whole notion of expanding the supplier and vendor base, is pretty unique in this industry and that’s one of the strengths we bring to Coda.

Lisa: Our goal is to really create an ecosystem of different suppliers. I just think that that’s something other industries — you talked about pharmaceuticals earlier — have done. Cannabis is just starting to get there, but that’s where you get exponential opportunities.

We’re really looking at cross-functional and interdisciplinary teams with outside partners. Cannabis is at the stage now where I think it’s looking for more sophisticated technologies and new ways of deploying. We’re also really interested, as Glenn said, in some of the younger, more entrepreneurial firms that want to possibly expand their reach into cannabis as well.

Aaron: Okay, great. So my next question is can you give me an example of a challenge that you run into frequently? And this can be either a cannabis challenge or a business challenge?

Lisa: I think one of the challenges that cannabis faces in general is educating consumers about our market. One of the opportunities we have is to bring people into the market. We’re at the same time developing products for people who are in the cannabis space and are active users and have varying degrees of understanding of how they’re using the category in their daily lives.

We’re also trying to create products and education to invite people into the cannabis market. That’s a different challenge than if you’ve had an Oreo cookie, and people kind of understand cookies. They understand Oreos, and then they understand organic Oreos and all the other permutations of two chocolate cookies with a vanilla thing in between. Our goal is to expand the ability for people to access cannabis in their lives.

That is a very unique business problem. And it does represent a bit of a screen, are you going to do some of your products for more sophisticated users and others for less sophisticated users?  Cannabis has consumers that have been taught essentially to think about milligrams; there’s one of the key components of choice. People will look at the product and flavor, and then they look at the milligrams and the price point.

That’s very unique to what we would find on CPG. You don’t necessarily look at dollars per milligram when you buy a cookie. So, if you’re trying to make a premium product with premium flavors, how do you say, Well, yeah, there’s dollars per milligram, but this product has all these other technologies to create the warming or whatever.” “Innovation in products and new categories is critical to get the industry beyond common confections.”

So you kind of have a dual issue. You’re trying to get people educated on a new category and how they use it. But the education of the consumer in terms of the potential and the possibilities that they can access is going to be very important.

Aaron: What trends are you following in the industry?

Lisa: Beyond paying close attention to legalization progress across the country and monitoring how states are setting up their regulatory standards, were focused on which consumer demographics are incorporating cannabis into their wellness and self-care practices—and how Coda Signature products fit into their daily routines.

Glenn: For edibles, fast acting” is probably beyond a trend and it will be interesting to see where this nets out. Consumers appear to be balking at the slightly higher price point for fast-acting gummies, but there may be a market for after-dinner dessert items. In other trends, use of minor cannabinoids and terpenes for specific benefits appears to be a solid consumer need, but this is going to require solid science to see if these products truly work. Innovation in products and new categories is critical to get the industry beyond common confections.

Aaron: Okay great! Lastly, what would you like to learn more about?

Lisa: Were fascinated by the technological advances being made in the cannabis industry, and how those achievements may enrich the consumer experience moving forward. Were also interested in the growing body of scientific research around how cannabis products can enhance peoples health and wellness.

Glenn: U.S. legalization and the constant changes in regulations require someone to distill the information and do a weekly report on changes.

Aaron: Thank you both! That concludes the interview!

Leaders in Extraction & Manufacturing: Part 3

By Aaron Green
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Cannabis extraction and manufacturing is big business in California with companies expanding brands into additional states as they grow. This is the third article in a series where we interview leaders in the California extraction and manufacturing industry from some of the biggest and most well-known brands.

In this weeks article we talk with Joaquin Rodriguez, chief operations officer at GenX Biotech. Joaquin was introduced into the cannabis industry through a close personal relationship and has spent seven years researching and navigating the cannabis market before jumping into his career with GenX Biotech. The interview with Joaquin was conducted on August 4, 2020.

Next week, we’ll interview Michael Schimelpfenig, head of R&D and BHO extraction manager at Bear Extraction House. Stay tuned for more!

Aaron Green: Hi Joaquin! I appreciate you taking the time to chat today. I’m glad we were able to connect!

Joaquin Rodriguez: Absolutely! I’m looking forward to it.

Aaron: Me too! So, I like to start off the interview with a background question so people get a chance to know about you better. How did you get involved with GenX Biotech?

Joaquin Rodriguez, chief operations officer at GenX Biotech

Joaquin: I went to school at Cal Poly for mechanical engineering and spent some time in the oil industry. In 2011 I was introduced to who would be the future founder of GenX Biotech, Shea Alderete. I spent 7 years diving into cannabis industry to better understand the landscape and Prop 215 (Californias Compassionate Use Act of 1996) and then Prop 64. In late 2017, I joined GenX Biotech to spearhead the acquisition of licensing and scale up distillate manufacturing.

Aaron: Awesome. My next questions are focused on product development. What is your decision process for starting a new product at GenX Biotech?

Joaquin: Our founder, Shea Alderete, is an innovator in product development. He specializes in formulations and new formulas for vape products. We are big on gathering empirical data. In any new product we will run a small batch and test first with heavy cannabis users to gauge their reaction to the product. We will then test with light cannabis users and finally new cannabis users so we get the full spectrum of user experiences. Throughout the process, we are gathering empirical data on things like taste and perceived therapeutic effects.

Aaron: Are you personally involved in manufacturing? Tell me about your process.

Joaquin: I am, yes. We specialize in large scale distillate manufacturing to make THC oil and we formulate batches using cannabis-derived terpenes. This what we call Sauce, a full spectrum high-terpene extract obtained from a butane hash oil (BHO) process. This is a separate extraction method from our alcohol extraction process.

Aaron: Very insightful! What is your process for developing new products?

Joaquin: GenX Biotechs core mission is to bridge the gap between cannabis culture and the science behind cannabis. We focus more on therapeutic effects as well as recreational. We keep a pulse on the industry as a whole to see what people are doing and saying as well as new extraction methods. When we capture that data we evolve and adapt and create new formulations based on that preference and test it out. Its a constant game of does this look good? taste good? make you feel good? how is the potency?” Its really a big collaboration with our end users.

We will also collaborate with other brands and manufacturers to stay ahead of the curve, share information that can make us a better company, more power in numbers is what we say. As an example, Wonderbrett is known for their high-quality flower. They have a high-end product and high-end brand recognition. We would, for example, strategize and collaborate together to utilize a unique cannabinoid and terpene profile and test that with our vape products in the market. It’s more of a collaboration than a white label relationship. In this way, Wonderbrett can expand into the extracts space via their brand. We do this with other brands as well where well use their raw material and joint market the brands on the final product.

Aaron: Fantastic. Are you developing new products internally?

Joaquin: We develop all our products 100% internally.

Aaron: Do you ever bring in external product development consultants?

Joaquin: Not for products, however there are certain situations, like hardware development, where we will work with outside groups that specialize in equipment manufacturing to create something specific and one off for us. We are currently working on bringing to the market an FDA-approved inhaler technology device that is a non-combustible metered delivery device that we are really excited about. In addition, we have an incubator program with our LA partners to introduce new brands to the market which is a great asset for consulting brands looking for a home and multistate resources.

Aaron: Very cool, that’s the first I have head of inhalers in the market. For my next question feel free to answer however you like. What does being stuck look like for you?

Joaquin: Getting stuck can happen in a few different areas. With respect to manufacturing, the main bottleneck issues are consistent quality of the raw biomass materials. Mother nature does not duplicate the same results exactly every time and fluctuations can affect the cost and quality of raw goods. Other things like wear and tear on manufacturing equipment are not normally an issue as everything is stainless steel and pretty stable. But things like valves, gaskets and grommets tend to wear down with consistent use. When those fail, a whole operation can be shut down. We keep a stockpile of those on hand to make sure we stay in production.

“I support the leaders that help increase the overall knowledge for consumer and patents to know the difference between a quality product and a boof product.”Aaron: If you get stuck is it usually the same place? Or is it different each time?

Joaquin: Like I said, if we get stuck its usually in the sourcing of raw materials. Cultivators can have a bad crop or weather might affect their crop. It almost always comes down to the relationship with your cultivators. They fuel the industry and are the back bone of the whole supply chain. If they have any issues it affects everyone down line.

Aaron: Do you ever hire outside consultants when you get stuck?

Joaquin: Not really. We rely on our experience and years of operating and going through our own failures to navigate any issues with manufacturing. Collectively we work together to pivot and adapt to the ever-changing legal cannabis landscape. We do on occasion outsource to a 3rd party to help acquire raw goods. On the other hand, we separately consult for other people and groups looking to build out labs!

Aaron: That’s an excellent position to be in! For the next question imagine there’s a magic wand. What does your magic helper look like?

Joaquin: Someone that can come in and help with taxation. Triple taxation is tough. There’s the cultivation tax, manufacturing tax, state tax and local taxes. Long Beach recently lowered their local tax from six to one percent, so that is encouraging, but there needs to be a fair taxation for this industry to really thrive.

Aaron: Whats the most frustrating thing you are going through with the business?“I’m really excited for the continued education and deregulation of cannabis and its medical applications.”

Joaquin: I think that would be sales downline. With Prop 215 and the transition to prop 64, legal outlets have been heavily truncated. There are now approximately 600 legal retail outlets down from a high of about 4500 prior to prop 64. The competition landscape is really high and its hard to get product on the shelves without proper capital to keep the brand going. It is advantageous to partner with an established distro in order to get involved with their downline and run lean and mean.

Aaron: Now for our final question. What are you following in the market and what do you want to learn about?

Joaquin: I’m really excited for the continued education and deregulation of cannabis and its medical applications. It never should have been illegal to begin with, but with government corruption and greed it was targeted and use for multiple agendas. I support the leaders that help increase the overall knowledge for consumer and patents to know the difference between a quality product and a boof product. You have seen the results of the vape scare and there’s a good reason for it. Most people don’t want to pay the high ticket for legally compliant product so they turn to the illegal side where no regulation or testing is conducted to ensure they are getting safe, quality products.

In addition, the demand is so strong that illegal producers are able to put whatever they want in their products and sell them as if they are legit, provided they have the knock-off packaging, and those operators further harm those people because the state they are selling in hasn’t adapted to the times and has prohibited the availability of legal cannabis. Their inaction and support of the continued “war on cannabis” makes them just as guilty in the results of those people who have fallen ill or been hospitalized.

There have been lots of new studies published that are slowly making their way into social media and reaching consumers so that is encouraging. Another important element is the education of bud tenders because they are the face of the brand when the customer or patient is at a legal dispensary so they need to be educated on what makes for a quality product and how it can help or achieve a desired result for a customer or patient.

Aaron: Well, that concludes the interview Joaquin. Thanks for taking the time today to talk. This is all awesome feedback for the industry. Thanks so much for these helpful insights into product development in the cannabis industry.

Joaquin: Thanks, glad to help!