Author: Nicole Brown
March 14 – 10 min read
What’s new, what’s next, and what it means for our business.
Published monthly, the OBX Innovation Briefing is presented by the OBX team as a way of highlighting the latest developments and innovations within the global cannabinoid industry. Each curated volume features insights and commentary on industry and category trends, regulatory updates, key initiatives, and upcoming events.
BRAND NEWS
Charlotte’s Web Plans to Debut CBD Beverages Later this Year
-
Charlotte’s Web said it expects to enter the CBD wellness beverage market this year. The company is currently developing new “CBD social elixirs” which are expected to launch in the second half of 2022.
-
“Entering the beverage category is reflective of our increased focus on new product categories and formats to drive our topline growth,” said Jacques Tortoroli, CEO of Charlotte’s Web. “This allows us to enter this fast-growing portion of the market.”
-
The company intends to introduce CBD sparkling beverages that contain Charlotte’s Web full spectrum hemp extracts derived from its proprietary, patented hemp cultivars. The beverages will be blended with other functional botanicals and natural flavors. The products will be vegan, gluten-free, dairy-free, and non-GMO.
-
The Brightfield Group estimated sales of CBD beverages at $245 million in 2021, up 50% from 2020. The market is expected to reach $1.3 billion in 2026, representing a 40% CAGR.
-
Kazmira, a vertically integrated cannabinoid manufacturer with patent protected purification technology – who received a $50M minority investment from Perrigo, (NYSE: PRGO) in June of 2020 – announced a significant strategic partnership with Companion Sciences to utilize its patent-pending CBD+Glucosamine formula and commercialize its joint mobility supplement in the US.
-
The partnership provides Kazmira with exclusive rights to manufacture and distribute a line of consumer products – through all channels – based on Companion Sciences’ IP and know-how. The products will address pain and inflammation symptoms related to a variety of joint conditions.
What’s A 3Chi? A Look At Some Of The Unusual Sponsors For This Year’s Daytona 500
-
Ever since the company first pioneered Delta 8, 3CHI has been a company focused on THC innovation within hemp-based consumer products. Now, raising the bar, the company has teamed up for a groundbreaking partnership with Richard Childress Racing, Tyler Reddick, and the No. 8 NASCAR Cup Series team in 2022. Tyler Reddick will drive the No. 8 3CHI Chevrolet Camaro during the 2022 season as part of the multi-race, multi-year partnership.
-
This is a significant partnership for both organizations, as it marks the first category-specific team partnership in NASCAR and first hemp-based consumer brand sponsorship across all major professional sports. It’s a big step for NASCAR and a huge step for the THC industry.
-
“This is a first-of-its kind partnership, both within motorsports and within the sports industry as a whole,” said Torrey Galida, president of Richard Childress Racing. “We’re proud of our role as industry leaders in this category and look forward to introducing a pioneer in hemp-based consumer products to NASCAR, as well as educating fans about 3CHI’s innovative, science- based products.”
HempFusion Subsidiary Sagely Naturals Launches Into 3,700 Stores at Top US Retailer
-
HempFusion Wellness Inc., a leading health and wellness company offering premium probiotic supplements and products containing CBD, is pleased to announce a major distribution agreement with one of the largest retailers in the United States.
-
Products from the Company’s wholly-owned subsidiary, Sagely Naturals, are expected to be on store shelves at over 3,700 of this retailer’s locations by April 2022.
-
The additional locations will increase the Company’s footprint from roughly 18,000 doors to just under 22,000 locations, including nine of the nation’s 10 largest Food, Drug & Mass retailers.
Cannabis Weekly Round-Up: Cronos Shares Results, Analysts Cut Producer Expectations
-
Shares of Toronto-based Cronos took a meaningful dip on Friday (February 18) after the release of its latest financial report; it had been delayed since last year, although the company has shared updates. Kurt Schmidt, president and CEO of Cronos, said the company will realign the business around its brands, and will prioritize the management of its expenses and investments.
-
“Through this realignment, our goal is to position Cronos Group to be able to successfully assemble a portfolio of best-in-class brands, products and intellectual property, while preserving the financial flexibility to make additional strategic investments in our (research and development) and brand pipeline as we innovate and evolve with our consumers’ wants and needs,” Schmidt said.
-
Cronos reported a net loss of US$77.6 million for its fiscal Q3 2021 period, which represents a US$0.21 loss per share. The company highlighted an uptick in net revenue, which hit US$20.4 million for the quarter, as well as adult-use sales in Canada, medical sales in Israel and an increased US presence.
TREND PIECES AND EDITORIAL
The Future of Cannabis is Female: Gen Z Women are Fastest-Growing Consumers of Legal Weed
-
Gen Z consumers overall saw the fastest growth during the pandemic, driven by how many were turning 21, the age at which cannabis can be legally purchased, where allowed. Destigmatization plays a role as well. Some young consumers have spent their formative years in states where adult recreational cannabis is legal and are more comfortable with it.
-
But there was also a particular uptick by women over men.
-
Year-over-year sales for Gen Z women, defined as those born in 1997 or later, grew the fastest in 2020 compared to any other cohort, at 151 percent, according to data from Headset, a cannabis analytics firm that collects aggregate information from point-of-sale registers. Gen Z men followed, at 118 percent. Millennials and Gen X round out the top four, with about 50 percent and 30 percent sales growth, respectively.
-
“The future of cannabis is female,” said Bethany Gomez, managing director at Brightfield Group, a cannabis market research agency. “An order of magnitude more.”
-
“That female consumer wants to be discreet, wants to have something not just to blow you away,” said Tessa Adams, chief marketing officer at Moxie.
-
“Using bikinis and being offensive is a thing of the past,” when it comes to marketing marijuana products, said Kristi Palmer, co-founder of Kiva Confections. “Cannabis brands and companies are getting with the program and professionalizing in a way that welcomes women into the space, thank God.”
Dry January: Low-and-No Sales Surge by $295M in Bars
-
In the US, 35% of adults of legal drinking age participated in Dry January this year, an uptick compared to 2019’s figure of 21%.
-
The trend towards ‘less but better’ drinking continues to gain traction in the US and abroad, and this new data from market analyst CGA shows the movement has reached a new high water mark.
-
Beyond Dry January, CGA research demonstrated that almost 75% of participants plan to continue drinking alcohol-free beer, ‘spirits’ and mocktails, and 64% intend to drink alcohol-free wine.
-
With more and better cannabis drinks on the market now than ever before, it won’t be long before consumers find these new cannabis drinks fill a niche where they might have otherwise consumed alcohol.
This Edibles Company Is Quietly Expanding Its Footprint and Aiming for $200M in Revenue for 2022
-
Edibles company Wyld started in Oregon, spreading across the U.S. and into Canada. While a relatively quiet growth story, Wyld is emerging as a formidable edibles player in the cannabis space.
-
The company raised a $150,000 seed round in 2015, and it has taken on some senior debt notes, but everything else has been internally generated. The company is taking a disciplined approach to growth and cashflow. Wyld is open to the possibility of future fundraising, but it has not reached a point where it is necessary for continued growth.
-
Wyld did more than $100 million in revenue last year, and this year, the company is targeting $200 million in revenue. Both established markets and new markets are driving the company’s growth.
-
Today, Wyld’s U.S. footprint includes its home state of Oregon, as well as California, Nevada, Arizona, Washington, Colorado and Michigan. The company plans to add several markets this year, including Illinois, Missouri, Oklahoma, Massachusetts and New Mexico.
REGULATORY
Michigan to Regulate CBD Under Cannabis Agency
-
Michigan will now regulate the non-high-inducing cannabis product CBD under the same agency as plain old marijuana.
-
Gov. Gretchen Whitmer signed an executive order renaming the Michigan Marijuana Regulatory Agency as the Cannabis Regulatory Agency (CRA). The CRA will regulate the processing, distribution and sale of marijuana and hemp.
-
The move will streamline the administration’s oversight of all cannabis products, Whitmer’s Friday order says. “Consolidating multiple government functions into the newly named Cannabis Regulatory Agency will help us continue growing our economy and creating jobs,” Whitmer said in the release. “And to be blunt — safe, legal cannabis entrepreneurship, farming, and consumption helps us put Michiganders first by directing the large windfall of tax revenue from this new industry to make bigger, bolder investments in local schools, roads, and first responders.”
CATEGORY & RESEARCH TRENDS
Oral Ulcers, Gynecologic Pain & Spinal Disorders
Oral Ulcers:
-
Researchers in China wanted to know whether treating oral ulcers might be among the many potential uses of CBD. To find out, they tested a CBD-infused oral spray at three different concentrations (0, 1, and 10 mg/mL) on tongue ulcers in mice over the course of three days.
-
Their results, published this month in the Journal of Dental Research, indicate that not only did the CBD-treated mice generally recover faster than the control animals, but the high-dose CBD group tended to fare better than the low-dose group.
-
The researchers also investigated the mechanisms behind this effect. They determined it to be largely attributable to immune response and inflammatory pathways mediated by direct activation of PPARy nuclear receptors, a main target of CBD, and, to a lesser extent, partial activation of CB1 receptors.
Gynecologic Pain:
-
Cannabinoids are well known for their ability to combat pain and inflammation. So researchers in the Department of Gynecology and Obstetrics at Johns Hopkins School of Medicine (with a practicing OB/GYN as senior author) conducted a systematic review of existing studies on the use of cannabis for gynecologic pain conditions. These include chronic pelvic pain, reported to affect one in four women worldwide; dysmenorrhea; vulvodynia; endometriosis; interstitial cystitis (bladder pain syndrome); and gynecologic malignancy.
-
Sixteen studies met inclusion criteria for the review, which was published this month in the journal Obstetrics and Gynecology and covered in the February episode of the journal’s podcast. Two randomized controlled trials and six prospective cohort studies evaluated the efficacy of medications containing either palmitoylethanolamide (PEA, an endocannabinoid-like compound) or an inhibitor of fatty acid amide hydrolase (FAAH, an enzyme that degrades PEA and endocannabinoids), while eight cross-sectional studies evaluated cannabis use.
-
“Survey data showed that most women reported that cannabis improved pain from numerous gynecologic conditions,” the authors write. “Cohort studies and an RCT using PEA-combination medications reported pain reduction.” While promising, these findings come with many of the usual caveats: “Interpretation of the studies is limited due to varying cannabis formulations, delivery methods, and dosages that preclude a definitive statement about cannabis for gynecologic pain relief.”
Spinal Disorders:
-
Also published in Feb. 2022, a new paper in the journal Current Reviews in Musculoskeletal Medicine summarizes recent research surrounding the use of cannabis and cannabinoids in four “spinal disorder” contexts: chronic low back pain; spinal cord injury; before and after surgery; and general orthopedic procedures. The narrative review identifies key studies and papers in each of these areas and provides an overview of their findings relative to various factors, including pain, spasticity, surgery recovery, and opioid use.
-
The long and the short of it: evidence for cannabis use in spinal disorders is still limited and of generally low quality but contains some promising nuggets.
-
“This is an interesting and burgeoning area of musculoskeletal research, as patients with spine disorders can be severely afflicted with chronic pain without many effective pain treatment options,” senior author and Northwestern University orthopedic surgeon Srikanth Divi said in an email to Project CBD.
-
“Before we can recommend it routinely for patients that undergo surgery, we need to know its biological effects on spine fusions and long-term complications. This would require robust prospective studies. For now, for patients that state they get good relief from CBD or THC products that are not operative candidates, I think it may be an effective alternative treatment.”
UPCOMING EVENTS & WEBINARS
-
-
SXSW (March 11-20, Austin TX)
-
Supply Side East (April 12 & 13, Secaucus, NJ)
-
Got Innovation? If you see an interesting new brand, trend or other innovative idea, please feel free to share directly to [email protected].
Author: Nicole Brown
March 14 – 10 min read
What’s new, what’s next, and what it means for our business.
Published monthly, the OBX Innovation Briefing is presented by the OBX team as a way of highlighting the latest developments and innovations within the global cannabinoid industry. Each curated volume features insights and commentary on industry and category trends, regulatory updates, key initiatives, and upcoming events.
BRAND NEWS
Charlotte’s Web Plans to Debut CBD Beverages Later this Year
-
Charlotte’s Web said it expects to enter the CBD wellness beverage market this year. The company is currently developing new “CBD social elixirs” which are expected to launch in the second half of 2022.
-
“Entering the beverage category is reflective of our increased focus on new product categories and formats to drive our topline growth,” said Jacques Tortoroli, CEO of Charlotte’s Web. “This allows us to enter this fast-growing portion of the market.”
-
The company intends to introduce CBD sparkling beverages that contain Charlotte’s Web full spectrum hemp extracts derived from its proprietary, patented hemp cultivars. The beverages will be blended with other functional botanicals and natural flavors. The products will be vegan, gluten-free, dairy-free, and non-GMO.
-
The Brightfield Group estimated sales of CBD beverages at $245 million in 2021, up 50% from 2020. The market is expected to reach $1.3 billion in 2026, representing a 40% CAGR.
-
Kazmira, a vertically integrated cannabinoid manufacturer with patent protected purification technology – who received a $50M minority investment from Perrigo, (NYSE: PRGO) in June of 2020 – announced a significant strategic partnership with Companion Sciences to utilize its patent-pending CBD+Glucosamine formula and commercialize its joint mobility supplement in the US.
-
The partnership provides Kazmira with exclusive rights to manufacture and distribute a line of consumer products – through all channels – based on Companion Sciences’ IP and know-how. The products will address pain and inflammation symptoms related to a variety of joint conditions.
What’s A 3Chi? A Look At Some Of The Unusual Sponsors For This Year’s Daytona 500
-
Ever since the company first pioneered Delta 8, 3CHI has been a company focused on THC innovation within hemp-based consumer products. Now, raising the bar, the company has teamed up for a groundbreaking partnership with Richard Childress Racing, Tyler Reddick, and the No. 8 NASCAR Cup Series team in 2022. Tyler Reddick will drive the No. 8 3CHI Chevrolet Camaro during the 2022 season as part of the multi-race, multi-year partnership.
-
This is a significant partnership for both organizations, as it marks the first category-specific team partnership in NASCAR and first hemp-based consumer brand sponsorship across all major professional sports. It’s a big step for NASCAR and a huge step for the THC industry.
-
“This is a first-of-its kind partnership, both within motorsports and within the sports industry as a whole,” said Torrey Galida, president of Richard Childress Racing. “We’re proud of our role as industry leaders in this category and look forward to introducing a pioneer in hemp-based consumer products to NASCAR, as well as educating fans about 3CHI’s innovative, science- based products.”
HempFusion Subsidiary Sagely Naturals Launches Into 3,700 Stores at Top US Retailer
-
HempFusion Wellness Inc., a leading health and wellness company offering premium probiotic supplements and products containing CBD, is pleased to announce a major distribution agreement with one of the largest retailers in the United States.
-
Products from the Company’s wholly-owned subsidiary, Sagely Naturals, are expected to be on store shelves at over 3,700 of this retailer’s locations by April 2022.
-
The additional locations will increase the Company’s footprint from roughly 18,000 doors to just under 22,000 locations, including nine of the nation’s 10 largest Food, Drug & Mass retailers.
Cannabis Weekly Round-Up: Cronos Shares Results, Analysts Cut Producer Expectations
-
Shares of Toronto-based Cronos took a meaningful dip on Friday (February 18) after the release of its latest financial report; it had been delayed since last year, although the company has shared updates. Kurt Schmidt, president and CEO of Cronos, said the company will realign the business around its brands, and will prioritize the management of its expenses and investments.
-
“Through this realignment, our goal is to position Cronos Group to be able to successfully assemble a portfolio of best-in-class brands, products and intellectual property, while preserving the financial flexibility to make additional strategic investments in our (research and development) and brand pipeline as we innovate and evolve with our consumers’ wants and needs,” Schmidt said.
-
Cronos reported a net loss of US$77.6 million for its fiscal Q3 2021 period, which represents a US$0.21 loss per share. The company highlighted an uptick in net revenue, which hit US$20.4 million for the quarter, as well as adult-use sales in Canada, medical sales in Israel and an increased US presence.
TREND PIECES AND EDITORIAL
The Future of Cannabis is Female: Gen Z Women are Fastest-Growing Consumers of Legal Weed
-
Gen Z consumers overall saw the fastest growth during the pandemic, driven by how many were turning 21, the age at which cannabis can be legally purchased, where allowed. Destigmatization plays a role as well. Some young consumers have spent their formative years in states where adult recreational cannabis is legal and are more comfortable with it.
-
But there was also a particular uptick by women over men.
-
Year-over-year sales for Gen Z women, defined as those born in 1997 or later, grew the fastest in 2020 compared to any other cohort, at 151 percent, according to data from Headset, a cannabis analytics firm that collects aggregate information from point-of-sale registers. Gen Z men followed, at 118 percent. Millennials and Gen X round out the top four, with about 50 percent and 30 percent sales growth, respectively.
-
“The future of cannabis is female,” said Bethany Gomez, managing director at Brightfield Group, a cannabis market research agency. “An order of magnitude more.”
-
“That female consumer wants to be discreet, wants to have something not just to blow you away,” said Tessa Adams, chief marketing officer at Moxie.
-
“Using bikinis and being offensive is a thing of the past,” when it comes to marketing marijuana products, said Kristi Palmer, co-founder of Kiva Confections. “Cannabis brands and companies are getting with the program and professionalizing in a way that welcomes women into the space, thank God.”
Dry January: Low-and-No Sales Surge by $295M in Bars
-
In the US, 35% of adults of legal drinking age participated in Dry January this year, an uptick compared to 2019’s figure of 21%.
-
The trend towards ‘less but better’ drinking continues to gain traction in the US and abroad, and this new data from market analyst CGA shows the movement has reached a new high water mark.
-
Beyond Dry January, CGA research demonstrated that almost 75% of participants plan to continue drinking alcohol-free beer, ‘spirits’ and mocktails, and 64% intend to drink alcohol-free wine.
-
With more and better cannabis drinks on the market now than ever before, it won’t be long before consumers find these new cannabis drinks fill a niche where they might have otherwise consumed alcohol.
This Edibles Company Is Quietly Expanding Its Footprint and Aiming for $200M in Revenue for 2022
-
Edibles company Wyld started in Oregon, spreading across the U.S. and into Canada. While a relatively quiet growth story, Wyld is emerging as a formidable edibles player in the cannabis space.
-
The company raised a $150,000 seed round in 2015, and it has taken on some senior debt notes, but everything else has been internally generated. The company is taking a disciplined approach to growth and cashflow. Wyld is open to the possibility of future fundraising, but it has not reached a point where it is necessary for continued growth.
-
Wyld did more than $100 million in revenue last year, and this year, the company is targeting $200 million in revenue. Both established markets and new markets are driving the company’s growth.
-
Today, Wyld’s U.S. footprint includes its home state of Oregon, as well as California, Nevada, Arizona, Washington, Colorado and Michigan. The company plans to add several markets this year, including Illinois, Missouri, Oklahoma, Massachusetts and New Mexico.
REGULATORY
Michigan to Regulate CBD Under Cannabis Agency
-
Michigan will now regulate the non-high-inducing cannabis product CBD under the same agency as plain old marijuana.
-
Gov. Gretchen Whitmer signed an executive order renaming the Michigan Marijuana Regulatory Agency as the Cannabis Regulatory Agency (CRA). The CRA will regulate the processing, distribution and sale of marijuana and hemp.
-
The move will streamline the administration’s oversight of all cannabis products, Whitmer’s Friday order says. “Consolidating multiple government functions into the newly named Cannabis Regulatory Agency will help us continue growing our economy and creating jobs,” Whitmer said in the release. “And to be blunt — safe, legal cannabis entrepreneurship, farming, and consumption helps us put Michiganders first by directing the large windfall of tax revenue from this new industry to make bigger, bolder investments in local schools, roads, and first responders.”
CATEGORY & RESEARCH TRENDS
Oral Ulcers, Gynecologic Pain & Spinal Disorders
Oral Ulcers:
-
Researchers in China wanted to know whether treating oral ulcers might be among the many potential uses of CBD. To find out, they tested a CBD-infused oral spray at three different concentrations (0, 1, and 10 mg/mL) on tongue ulcers in mice over the course of three days.
-
Their results, published this month in the Journal of Dental Research, indicate that not only did the CBD-treated mice generally recover faster than the control animals, but the high-dose CBD group tended to fare better than the low-dose group.
-
The researchers also investigated the mechanisms behind this effect. They determined it to be largely attributable to immune response and inflammatory pathways mediated by direct activation of PPARy nuclear receptors, a main target of CBD, and, to a lesser extent, partial activation of CB1 receptors.
Gynecologic Pain:
-
Cannabinoids are well known for their ability to combat pain and inflammation. So researchers in the Department of Gynecology and Obstetrics at Johns Hopkins School of Medicine (with a practicing OB/GYN as senior author) conducted a systematic review of existing studies on the use of cannabis for gynecologic pain conditions. These include chronic pelvic pain, reported to affect one in four women worldwide; dysmenorrhea; vulvodynia; endometriosis; interstitial cystitis (bladder pain syndrome); and gynecologic malignancy.
-
Sixteen studies met inclusion criteria for the review, which was published this month in the journal Obstetrics and Gynecology and covered in the February episode of the journal’s podcast. Two randomized controlled trials and six prospective cohort studies evaluated the efficacy of medications containing either palmitoylethanolamide (PEA, an endocannabinoid-like compound) or an inhibitor of fatty acid amide hydrolase (FAAH, an enzyme that degrades PEA and endocannabinoids), while eight cross-sectional studies evaluated cannabis use.
-
“Survey data showed that most women reported that cannabis improved pain from numerous gynecologic conditions,” the authors write. “Cohort studies and an RCT using PEA-combination medications reported pain reduction.” While promising, these findings come with many of the usual caveats: “Interpretation of the studies is limited due to varying cannabis formulations, delivery methods, and dosages that preclude a definitive statement about cannabis for gynecologic pain relief.”
Spinal Disorders:
-
Also published in Feb. 2022, a new paper in the journal Current Reviews in Musculoskeletal Medicine summarizes recent research surrounding the use of cannabis and cannabinoids in four “spinal disorder” contexts: chronic low back pain; spinal cord injury; before and after surgery; and general orthopedic procedures. The narrative review identifies key studies and papers in each of these areas and provides an overview of their findings relative to various factors, including pain, spasticity, surgery recovery, and opioid use.
-
The long and the short of it: evidence for cannabis use in spinal disorders is still limited and of generally low quality but contains some promising nuggets.
-
“This is an interesting and burgeoning area of musculoskeletal research, as patients with spine disorders can be severely afflicted with chronic pain without many effective pain treatment options,” senior author and Northwestern University orthopedic surgeon Srikanth Divi said in an email to Project CBD.
-
“Before we can recommend it routinely for patients that undergo surgery, we need to know its biological effects on spine fusions and long-term complications. This would require robust prospective studies. For now, for patients that state they get good relief from CBD or THC products that are not operative candidates, I think it may be an effective alternative treatment.”
UPCOMING EVENTS & WEBINARS
-
-
SXSW (March 11-20, Austin TX)
-
Supply Side East (April 12 & 13, Secaucus, NJ)
-
Got Innovation? If you see an interesting new brand, trend or other innovative idea, please feel free to share directly to [email protected].
