We Americans like to treat ourselves. Statistically, nearly everyone in the U.S. reports eating candy at some point during the course of each year—and an estimated 75 percent of adults reportedly indulge in candy here and there on a regular, weekly basis.

Also, nostalgia is a big part of the draw. “Everyone grew up with gummies,” says Steffen Weck, senior managing consultant, Vivid Consulting, LLC, Denver.

Weck also notes that gummies are easy and inexpensive to produce, and can be made with natural—even organic—ingredients. It’s also easy to provide a variety of flavor options.

“Gummies were one of the first products to appear in the legalized cannabis market, and they continue to make up a large percentage of all tetrahydrocannabinol (THC) edible sales,” says Jeremy Goldstein, COO and co-founder, Stillwater Brands, Denver. They also fit well with existing consumption patterns around adult gummy vitamins, he notes.

The gummy format is also popular in legal cannabis edibles because it’s popular in the mainstream candy industry. Mintel projects that the mainstream (non-cannabis) gummy market in the U.S. will reach $5 billion by 2022. The broader non-chocolate category has grown by a third over the past five years—up $1 billion from 2012 to 2018.

IRI, Chicago, reports that non-chocolate candy grew 5.98 percent to $8.21 billion for the 52 weeks ending March 25, 2018 (Candy Industry magazine, Global State of the Industry, June 2018). Trends that product developers are watching include fortification, an approach that can resonate with any age demographic. Organic, vegan/vegetarian and upscale/exotic flavor profiles are also on the industry’s radar—all of which are decidedly adult product differentiators.

These trends will trickle into the legal cannabis gummies market, too—along with emerging segments like increased prevalence of cannabidiol (CBD) products.


Market Perspectives

Even before the passage of the Farm Bill, which opens the door to nationwide farming of industrial hemp—a primary source for the non-psychoactive CBD ingredient—product development prominently featuring CBD was already seeing a significant uptick. Now that hemp is part of the U.S. agricultural landscape, CBD will be ubiquitous.

“Since the passage of the Farm bill, hemp-derived CBD is heading toward becoming readily available to consumers across the U.S.,” says Weck. “CBD-infused gummies are gaining much more interest by consumers.” They’re beginning to understand the benefits of adding CBD to their daily routine, he notes.

“CBD is a once-in-a-generation opportunity for established gummy manufacturers and start-up cannabis brands alike,” says Goldstein. “With the passing of the Farm Bill, CBD can now realize its potential as one of the most-exciting functional food ingredients in decades.” He fully expects CBD gummies to make their way across all retail channels.

Stillwater currently offers a line of gummy supplements in Colorado to meet a range of consumer needs. They’re all-natural, low in sugar and made with natural fruit juices and colors. The line includes three varieties: Honey Lavender (5 mg CBD and 0.25 mg THC per gummy), and Green Tea Mango (2.5 mg CBD and 2.5 mg THC) and Blood Orange (5 mg THC).

In September 2018, Wana Brands, Boulder, CO, expanded its gummies lineup with new Mango CBD Sour Gummies, a CBD-only, vegan-friendly product that offers 20 mg of CBD per gummy.

Kiva Confections, Oakland, CA, has introduced Kiva Camino Gummies in a Sparkling Pear flavor that features a 3:1 ratio of CBD to THC.

Research has shown synergistic effects between CBD and THC. “THC and CBD work well separately,” says Weck. “However, consumers are beginning to appreciate the synergistic benefits, which improve overall health.” He notes research has shown CBD might inhibit the breakdown process of THC in the liver, thereby extending the medicinal benefits.

Signature flavors also entice consumers. “Flavor optimization is important,” says Weck. “Flavor masking/potentiating needs to be considered.” According to research conducted by Vivid Consulting, the market is split, with 50 percent of consumers indicating a preference for edibles with a typical cannabis flavor and aroma, and the remaining half preferring an absence of such flavor and aroma notes.

“Flavors are top-of-mind for consumers as they choose their favorite products,” says Dan Anglin, CEO, CannAmerica Brands, Vancouver, British Columbia. He notes that CannAmerica uses data from confectionery associations regarding flavor and ingredient profiles to offer a balanced roster of classic flavors and new options. The company’s lineup includes traditional fruit flavors like peach, strawberry and banana, but also options like white lemonade, among others.


Standardizing Production

Producers of gummies should thoroughly familiarize themselves with state-specific regulatory guidelines on permitted gummy shapes and colors, among other factors. Colorado first banned use of shapes common to mainstream, non-cannabis gummies—like bears, other animals, fruit, etc.—back in 2017. Then, in October 2018, Washington State flirted with a ban on gummies, eventually deciding to establish stronger guidelines on the manufacture of such products, with specifics related to permitted colors and shapes.

“When creating edibles, or any ingestible product, one must understand the food production industry as a whole, not just how it relates to cannabis,” says Shehzad Hoosein, executive vice president, Cannabistry Labs, Niles, IL. “Specifically, we see many cases of people being lax in their enforcement of food-safety protocols, including HACCP, sanitation and other quality-assurance processes. In addition, at the production level, I have not seen much rigor applied to quality control, with respect to in-process quality checks, and traceability.”

Whenever a company is developing foods for human ingestion, it must adhere to strict food-safety and QA/QC protocols, looking toward FDA standards for guidance. “It is my firm conviction that all cannabis-infused edibles must be produced with the same mindset as any packaged food product,” says Hoosein. This means placing the highest emphasis as possible on food safety.

“Product developers first need to evaluate the skillset at the production level,” says Hoosein. “If a manufacturer has the foresight to employ quality-assurance personnel and operators with experience in the food and beverage industry, they’re off to a good start.” Alternately, they need to incorporate food safety and quality-control protocols directly into their formulations and standard operating procedures (SOPs) to the maximum extent possible in order to minimize risks.

“Gummy production is vastly different based on scale,” says Anglin. “If a brand wants to create boutique, small-batch products, the main challenges are based on size of equipment. If a producer wants to serve the entire marketplace in which they are licensed to operate, they need to be consistent and reliable for both retailers and consumers, and that means more-extensive equipment requirements, detailed SOPs and a larger labor force to train.”

Developing a product that tastes right and performs correctly when infused is a science, says Anglin. “Establishing standards for creating amazing products is the first step. The second step is to enact processes that are repeatable so that the expected outcomes are the same with every production batch. And the third step is fostering a professional environment that makes your team work together to make great products.”

Having trusted partners who understand your business is key, says Goldstein. “Unfortunately, there is a lot of snake oil being pushed these days, and in a fast-developing market, it’s incredibly important to separate the wheat from the chaff.”

Goldstein provides some guidelines to consider when looking for a CBD supplier:

  • Make sure they understand your production and are able to specify the right product for you. Ingredients are never one-size-fits-all. Do you need a flowable powder, a liquid concentrate, a technology for film adhesion? What level of concentration best suits your application?
  • Find out the source of the CBD. What testing is being conducted in terms of potency, heavy metals, pesticides, etc.?
  • Can your CBD partner scale with you and provide consistent output every time?
  • Is your CBD supplier accurately labeling their ingredients? And do those ingredients support or detract from your brand value propositions?

Suppliers continue to make strides in the purity and consistency of the ingredients they offer. “Science and extraction technology have improved to a point that the extracted oils can be refined to remove residual plant matter, including lipids, waxes and even some undesirable terpenes,” says Anglin. The end result is a professional product that delivers a consistent experience every time.


Emerging Markets

Current trends point toward more supplement-focused positioning in the future, notes Goldstein. “High-sugar, artificially flavored products work well as novelties, but they don’t integrate well into daily use. Consumers want functional and healthy.”

Manufacturers are rapidly developing cannabinoid formulation technologies that provide for cleaner flavor profiles and greater bioavailability without the need for added sugars or fats, notes Goldstein. “These efforts yield greater flexibility in formulation, as well as improved product efficacy.” He notes that growth in the mainstream consumer market will have a strong focus on daily wellness.

Weck suggests that producers look into market opportunities for gummies made with strain-specific distillates. “Each strain of cannabis has various types and amounts of cannabinoids and terpenes,” he says. This provides unique experiences for the consumer. “Customers will choose the type of edible based on the desired effect.” For instance, producers could develop occasion-specific products for instilling calm, or getting ready for sleep. Producing gummies with whole-flower distillates can also improve end-product quality, consistency and efficacy.

A better supply chain helps producers effectively expand into new markets. “As the science progresses, we see nutraceuticals and vitamins being added to fortify products and provide adult consumers many choices in how their consumption of cannabis confections can be paired with other methods of enhancement for sleep, digestion, skin care and more,” says Anglin.

Anglin notes that CannAmerica is laying the groundwork to be ready for the FDA to reverse its decision regarding interstate sales of CBD food products. “We are laser-focused on this market, as there are many opportunities to create specific formulations for different types of consumers, from those looking to boost their wellness, to older demographics and everyone in between.”

CBD is clearly poised for a rapid rise—particularly now that the doors are open to conduct significant levels of medical and health-specific research.

“CBD will be a dominant functional ingredient in gummy supplements of all kinds,” says Goldstein. “The potential applications cover all manner of ailments. We just need the research to back it up.”