Ten years is a long time.
It’s particularly true for the makers of edibles, which have navigated an unsteady landscape from the early days of collective gardens and nonexistent regulations.
But the companies that have made it this far, be they large multi-state operators or small craft kitchens, all share a similar focus on the products, customer service, innovation and education, even if it hasn’t always been easy.
“We always told each other that if we do the right thing, the money will come. It wasn’t about the money. It was about making the medicine and taking care of customers,” says Rick Scarpello, CEO of Medically Correct in Colorado, which celebrated its 10-year anniversary this year. “You don’t start with ‘How do I make money?’”
“I’m glad I didn’t know then what I know now or I probably wouldn’t have gone through with it,” says Hovering Laplante, CEO, co-founder and chief infusion officer of elbe’s edibles in Oregon, a business he describes as a “10-year overnight success” story.
One of the oldest cannabis edibles companies in the country is VCC Brands, a California-based processor and manufacturer that was founded as the Venice Cookie Company in 2008 but today sells chocolates, gummies, teas and other beverages.
“I don’t know if anyone else in the business has seen as much change as we have seen,” says founder and CEO Kenny Morrison. “The fact that we’re called ‘Venice Cookie Company’ shows how far we’ve come.”
Morrison founded his company during California’s Prop 215 medical era after he made a potent olive oil from some trimmings he was given by a childhood friend. He knew the product — which he deemed “Not So Virgin Olive Oil” — was good, but not be enough to carry a company. So Morrison hired his cousin, a pastry chef, to help create a cookie recipe, which got a great response. The infused cookies were smaller than other products available on the market, but proved to be ahead of their time, delivering THC to those who needed it in smaller portions with fewer calories.
“I’ve never seen a Vicodin the size of a football,” Morrison says today, looking back on what was at the time, an innovative decision.
Following the success of the small cookies, Morrison’s company launched a line of small chocolate chews and then capitalized on the growing desire for higher-potency products with a cookie that had 60 milligrams of THC, which was at the time labeled “5x strength.” Then came a “15x” chocolate bar, called the 4.20 Bar, that quickly became a bestseller.
VCC broke into the growing beverages category with infused tea bags called “Subtle Tea” and then created a lemonade — all before the first states legalized recreational use in 2012. The lemonade would become part of the Cannabis Quencher line that is still sold today. It was around that time Morrison says he decided he wanted VCC to be the “Coca-Cola of the cannabis industry,” a phrase that often drew blank expressions from those he told.
“It’s always been a process of elimination and convincing — convincing people to trust us,” he says of the products VCC has developed and released.
Truth in Advertising
At Medically Correct, Scarpello and co-founder and president Bob Eschino also remember the days when edibles were labeled using a “1x, 2x, 3x” potency system. It was something they worked hard to overcome because, as Eschino says, “it meant nothing.” Medically Correct was one of the first companies in Colorado to begin labeling products with activated milligrams of THC and to include nutritional facts. The pair got into the business after seeing cannabis help family members and knew there would be a market for consistent, quality products.
“It was really Rick (Scarpello) and I understanding that having a consistent product was the opportunity to set us apart,” says Eschino. “That in itself was really kind of groundbreaking.”
Consistency, in both product and labeling, was important to Eschino and Scarpello, as both had come from other industries. Scarpello worked in the food industry and Eschino was a vendor who owned a packaging company, though both had in interest in cannabis, Scarpello as a user and Eschino because his brother, Tom, was making cannabis edibles to help aide their grandmother in her final years.
Together, they joined with Josh Fink, a chef, and Derek Cummings, a friend who understood the extraction process, to found Medically Correct.
“We treated it as food from the beginning and then we treated it as medicine because I learned early on that I wasn’t really selling a chocolate bar, I was selling THC,” Eschino says.
The company also led to innovations in the market, such as putting edibles in 10-packs like they would any other manufactured food product, something unheard of at the time. Medically Correct also guaranteed orders and did not charge delivery fees for its products.
“We were a customer service company on top of being a food company,” Scarpello says.
Elbe and the Goliaths
Meanwhile, in Portland, Laplante and his wife Laura Brannan (known as “Elbe”) were using traditional ingredients and recipes to make edibles for themselves and family members. But it wasn’t long before the couple decided to take a small step into their state’s medical market.
“One day Elbe looked at me and said, ‘We may want to close up our photography business and just be making edibles. We’re doing some important work here,’” Laplante says.
Unlike most commercial edibles manufacturers, the key ingredient for elbe’s is cannabutter, produced in-house through a three-day infusion process.
“Elbe went back to old pioneer days cookbooks when the mother in the family had to cure ailments through ingredients and through cooking,” says Laplante. “She kind of took that philosophy and applied that to cannabis.”
While much, much smaller than the leading edibles brands, elbe’s focused on creating the best candies and cookies it could and matching that with customer service, making connections with dispensary owners and meeting with them personally every month during deliveries to learn exactly what the customers wanted.
“That really allows us to keep our finger on the pulse of the market,” says Laplante, who would take the information back to the kitchen to prepare the next week’s order. “We’re finding out what people want from our cookie line and then baking those to order every week.”
But even as the company’s profile began to grow, elbe’s stayed small, focusing on its product and its partner dispensaries.
“As we’ve been scaling up, we just want to make sure we maintain the highest quality on our product,” says Laplante.
You Are What You Eat
Despite small beginnings, all three companies not only survived, but thrived through difficult years. Today, despite breakups with business partners, challenges with packaging and even a raid on one of its facilities, VCC is in multiple states, including California and Arizona and has plans to launch in Canada and Florida in 2021. The company scaled up and then back down, now running “lean and mean” and focusing on licensing its brands and products, all tailored to meet the needs, wants and regulations of each individual market.
“I don’t know if there’s a more resilient company out there,” Morrison says.
Medically Correct has grown to be the No. 1 infused chocolate-maker in Colorado with 54% of the market and the second-largest edibles company in the state. The company’s Incredibles brand is now licensed in six states and the company made more than 1 million products last year.
“We used to struggle making 100 bars a day, now we’re making 7,000 per day,” says Eschino, “and 65,000 gummies.”
Elbe’s, on the other hand, remains small, though it too is looking to scale up to the next level.
“We’re kind of reaching the limitations of the first facility we built,” Laplante says of the company’s 3,300-square-foot space.
But for those getting into the game, all three have similar advice: Focus on your product, never give up and, perhaps most importantly, advocate for yourself and your products. This advice is especially true when it comes to regulations, as all three companies have stories about how changing rules have affected each business, particularly when it comes to packaging.
“We learned very early that if you’re not sitting at the table when the rules are being made, then they are going to make them and shove them down your throat,” says Eschino.
“We’ve had to redesign items, we’ve had to redesign processes, we’ve had to redesign a whole lot around working in a regulated market as Oregon has changed rules,” says Laplante. “We’d definitely say that anyone who is interested in being in the cannabis space has to be a strong advocate for yourself and for your company.”
Finding the right partners and building the right team is also key, especially in a small business, something Laplante says he’s learning after years of working 12 hours a day, seven days a week.
“We’re building a team around us so that we can step away from the business and the business will still function and operate the way we expect,” he says.