News ReleaseThe Rising Importance Of Minor Cannabinoids In The Growing Edible Market
Benzinga
By Kyle Anthony, Benzinga With society’s growing acceptance of cannabis consumption, a segment that has risen in popularity is edibles, which are simply products containing cannabinoids that one can eat or drink. While edibles containing cannabinoid compounds, such as THC (tetrahydrocannabinol), which induces a euphoric feeling, or CBD (cannabidiol), which has therapeutic attributes, are familiar to many, edibles containing minor cannabinoids are gaining traction among consumers due to the compound’s unique properties and potential health benefits. As such, the minor cannabinoid-infused edibles market stands at the precipice of potentially remarkable growth, fueled by discernible shifts in consumer behavior. The 2023 Minor Cannabinoid Market Recently, BayMedica, a firm focused on producing and commercializing rare cannabinoids and a subsidiary of InMed Pharmaceuticals (NASDAQ: INM), released a report detailing the growth of the minor cannabinoid market in 2023. The report utilized data from Headset, the largest dataset in the cannabis industry. It focuses on the growth, competition and consumer habits associated with minor cannabinoid-infused edibles in ten regulated cannabis states, which represent 85 million of the 158 million people living in areas where recreational cannabis is legal. The edible market experienced a robust 5.4% revenue surge in 2023, totaling $2.097 billion for the year. This growth was driven partly by innovative developments with minor cannabinoids. Gummies, a subset of the edible product category, exhibited strong sales, while minor cannabinoid-infused edibles witnessed an impressive 47% year-over-year growth, with sales totaling $391 million for the year. While there was a slight decline (i.e., from $14.29 to $12.54) in the average edible item price, the increased demand by consumers, strong growth prospects of the category and reduced input production costs were factors that appealed to cannabinoid brands seeking to gain strategic positioning in the industry. Minor Cannabinoids Explained Minor cannabinoids are naturally occurring compounds found in cannabis plants, distinct from the more well-known cannabinoids like THC and CBD. While THC and CBD dominate in terms of quantity and research focus, minor cannabinoids are changing the cannabinoid landscape due to their holistic capabilities. Minor cannabinoids are found in much smaller quantities than their more abundant counterparts THC and CBD, and are relatively rare in the full spectrum of cannabinoids that are present in a fully mature cannabis plant. Some notable minor cannabinoids include: Cannabichromene (CBC): CBC is recognized as a "booster" for other cannabinoids and is known for its interaction with the body's natural endocannabinoid, anandamide (also known as the bliss molecule). CBC seems to prevent the reabsorption of anandamide, enabling this bliss molecule to remain in the bloodstream for a longer duration. Tetrahydrocannabivarin (THCV): THCV is non-psychoactive and has a chemical structure similar to THC but produces different effects. It may act as an appetite suppressant, making it of interest for weight loss and for reducing unwanted food cravings that are typical with adult-use cannabis products. Additionally, As a CB1 receptor neutral antagonist, it can stimulate focus and energy, opening it up to a wide range of potential applications as an ingredient in both topical and ingestible products. Cannabidivarin (CBDV): CBDV is similar to CBD in its lack of psychoactive effects. Possible use cases for this minor cannabinoid span from the promotion of brain health and immune health to gut health. Cannabinol (CBN): CBN is formed as THC degrades and is mildly psychoactive. It is known for its potential sedative effects, which could be useful for treating insomnia. Additionally, CBN may have antibacterial properties and could aid in pain relief. All cannabinoids work with the endocannabinoid system (ECS), which was only discovered in the late 1980’s. Every human being has an endocannabinoid system, and every cell type in the body has cannabinoid receptors that work as lock and key, with the over 140 cannabinoids that are known to exist. The ECS regulates and controls many of the body’s most critical functions, and it has been hypothesized that ECS activity may have therapeutic potential in almost all diseases affecting humans. Some of the more powerful cannabinoids, sometimes known as minor or rare cannabinoids, are impractical to extract either because they are represented in such small quantities in the plant or because their separation from other cannabinoids is cost-prohibitive. However, advancements in biosynthesis and synthetic chemistry, such as those utilized by companies like BayMedica, LLC, enable the production of these cannabinoids at commercial scales, paving the way for new therapeutic applications. Minor Cannabinoids Gaining Momentum In 2023, 24 of the top 50 selling edibles incorporated minor cannabinoids, reflecting a significant shift in market trends. The innovation underpinning this material adoption speaks to the commitment of leading edible brands that are identifying formulations that resonate with a growing and diverse consumer base. This strategic action helped brands counter price compression by establishing a premium price and propelled the growth of minor-infused edible revenue. As detailed in the report, brands incorporating minor cannabinoids in cannabis products strategically command a premium, boasting a 6.3% higher average item price than products with standard THC formulations. This pricing trend reflects market recognition and a willingness to pay more for products enriched with minor cannabinoids, providing an opportunity for differentiation in a crowded market. It also gives credence to the entourage effect, a theory that various cannabis compounds work together to create specific effects and benefits. Using this theory, combining minor cannabinoids with major cannabinoids like THC and CBD allows for more medicinal benefits upon consumption, like pain relief. Cannabis brands incorporating minor cannabinoids also enjoy a remarkable 73% higher average EQ (Equivalent) price compared to THC-only counterparts. The use of EQ pricing is essential for fair product comparison, considering factors like potency or weight and highlighting consumers' tangible willingness to pay more for the inclusion of minor cannabinoids. Finally, given the diverse nature of minor cannabinoids, the products have high customer value and appeal. Tapping into their therapeutic properties empowers consumers to experience various health and wellness benefits, fostering a healthier and more balanced lifestyle. Commercial Adoption Commercialization of minor cannabinoids via edibles has provided insight into which minors are resonating with consumers. As illustrated in the report, CBN has established and maintained sales leadership within the minor cannabinoid landscape. Given its potential sedative effects, it can be hypothesized that consumer demand is being driven by individuals using it as a sleep aid. While CBG continues to exhibit strong year-over-year sales, market analysts project a potential deceleration in the future. Projections suggest that CBG, once the minor cannabinoid leader, may make way for emerging cannabinoids to take the forefront. In contrast to prior years, both CBC and THCV exhibited strong sales in 2023. For CBC, as research on its potential benefits as a mood enhancer gains momentum, its popularity in consumer preferences is likely to fuel sustained growth in sales, positioning it as a key player in the evolving cannabis market. THCV witnessed a substantial 140% year-over-year growth. Its improved affordability due to production enhancement made by lead processors like BayMedica has made THCV more accessible in the edibles market. Furthermore, rising awareness of its physical energy and appetite-suppressing effects, especially when combined with THC variants, positions it as a key player in shaping the evolving landscape of cannabinoid-based products. The Path Forward The edibles market is witnessing a paradigm shift as consumers are redefining their priorities around cannabis consumption, moving away from smoking in favor of the targeted therapeutic effects and consistent experiences offered by edibles. This move means the cannabis product landscape will be transformed in the coming years; as such, edible brands will need to align with the evolving needs of consumers, steering the industry towards a future where minor cannabinoids in edibles take center stage in the pursuit of holistic well-being. As a stakeholder in this industry transformation, BayMedica continues to focus on scaling its operations and expanding its product offerings to meet the growing demand for high-quality cannabinoids in various applications that may be used by a growing customer base. Featured photo by Elsa Olofsson on Unsplash. Benzinga is a leading financial media and data provider, known for delivering accurate, timely, and actionable financial information to empower investors and traders. This post contains sponsored content. This content is for informational purposes only and is not intended to be investing advice. Contact Details Benzinga +1 877-440-9464 info@benzinga.com Company Website http://www.benzinga.com
July 19, 2024 08:30 AM Eastern Daylight Time
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