Watch out, Maureen Dowd, three more companies that make edibles may be coming to the legal marijuana market.
The Marijuana Show's fifth episode, "Not Your Grandma's Salty Balls," was all about edibles. As the episode's title alludes, entrepreneurs pitched products from cannabis-infused sweet-and-savory chocolate balls to cannabis-based bitters.
One of the most intriguing businesses featured on the show is Cannabis4Cancer. The California-based company has a one-for-one business model, reminiscent of Toms Shoes, giving away a dose of THC oil to cancer patients for every chocolate bar sold. Founder Joaquin Lujan asked for $850,000 for a 15 percent stake of his company.
"We are not hiding the fact that we are a for-profit company with a cause," Lujan says. "[Cannabis] is medicine and we need to make sure it's available to people who need it at zero cost since it's not covered by insurance. I realized we just need to give it away for free."
Lujan told the show's creators and judges, Wendy Robbins and Karen Paull, that his company sources cacao from around the world and described one of his employees as the Willy Wonka of the edible industry. Each bar costs around $2.50 to make and has a price point of $15 to $20. One potential problem with his company is that he does not have production licenses to make his cannabis-infused products. Although navigating the process of obtaining licenses is difficult, Robbins and Paull advanced Cannabis4Cancer to the next round.
Another contestant who made it to the next round was Kristin Gemma Ra Star Di Ferdinando, the founder of organic cannabis-infused energy bar company Buddhalicious. Di Ferdinando, who is a single mother of two and brought her younger child along with her, says her bars are gluten-free, refined sugar-free and only contain 10 milligrams of THC, so anyone who eats one won't have any problems functioning afterward.
After one year, she says, she has deals with 100 dispensaries in Colorado and her products will be in stores by February. Despite her meandering pitch, Di Ferdinando hooked the judges with her product. "From a marketing standpoint, what I like most about it is that it doesn't look like a kids' snack," says judge and business adviser Todd Mitchem, who runs his own consulting firm and used to be an executive at cannabis vaporizer company OpenVape. "This looks like an energy bar. If I laid this out my kids would avoid it."
What should entrepreneurs take from this episode? Well, one thing is that the edible market reaches a wider set of consumers. For many virgin-lunged first-time cannabis users, edibles are more appealing than smoking weed. That said, the main concern around edibles (as Maureen Dowd found out the hard way) is dosage and packaging. The last thing you want is for edibles to be too strong. Developing packaging that does not attract children is important as well.
The episode also shows how attractive social entrepreneurship can be to investors. Like Toms Shoes, a good cause can help build a loyal following of customers who are motivated by the desire to improve the lives of others. That's true even if--or perhaps especially if--the product is cannabis.
Watch the full episode below. In case you missed last week's episode, catch up on the action here.