As more states legalize cannabis for recreational use, edibles will become a huge market for entrepreneurs. In California alone, consumers gobbled up more than $180 million worth of marijuana-infused food and drinks last year, 10% of the state’s cannabis sales, according to Arcview Market Research.
And it’s not just California that’s seeing a growing edibles market. Sales of pot-infused treats increased 121% last year in Washington state, where recreational marijuana is legal, according to cannabis analytics firm Headset Inc. And since Colorado first allowed recreational marijuana use, sales tripled from $17 million in the first quarter of 2014 to $53 million in the third quarter of 2016.
The reason for the explosive growth is that as the pot market expands, it’s starting to reach people who don’t want to smoke. Overall the smoking rate among adults is down from 20.6% in 2009 to 16.8% in 2014. Edibles provide a discrete, smoke-free experience. And since they can command higher prices, edibles often account for 25 to 60% of a dispensary’s profits.
That makes edibles an appealing slice of the pot pie, which was worth an estimated $7.2 billion in 2016, and is projected to grow up to 25% annually.
Edibles today are mostly candies, from dosed gummy bears to lollipops, where taste is an afterthought. And usually people are buying those edibles in windowless dispensaries where it can still feel very much like making an illicit transaction.
Matt Fosburg, founder of Ez THC, believes that’s poised to change and that there will soon be a market for high-end cannabis candy. With a background in retail design and candy making, Fosburg wants to bring the trappings of high-end retail — quality, consistency and a great in-store experience — to the world of marijuana treats.
He believes that focusing on taste and quality will give him a competitive edge in the edibles market. While most producers melt down mass-produced chocolate to make their candy, Fosburg says he’s the first one working on an edible bar from scratch.