That brownie recipe is a trip

In­fused ed­i­bles are a grow­ing part of the $5.4 bil­lion cannabis busi­ness in the U.S. It’s “prob­a­bly the most ex­cit­ing seg­ment of the mar­i­juana in­dus­try”

Bloomberg Businessweek (Asia) - - CONTENTS - −Jen­nifer Ka­plan The bot­tom line Sales of mar­i­juana ed­i­bles rose in 2015 as more “gan­japreneurs” piled into the fledg­ling in­dus­try.

Peggy Noo­nan knows a thing or two about mar­i­juana. She was a drug run­ner be­tween Mex­ico and the U.S., be­fore earn­ing her liv­ing as a dealer in Ari­zona. Both stints ended badly, with Noo­nan serv­ing time in a Mex­i­can jail and slapped with a felony con­vic­tion in Ari­zona. All that feels like an­cient his­tory, says Noo­nan, who's among the thou­sands of “gan­japreneurs” in the bur­geon­ing mar­ket for ed­i­ble mar­i­juana prod­ucts. “It was pretty wild, life com­ing full cir­cle,” she says.

Noo­nan's Cor­nu­copia Health and Well­ness in Tuc­son sells 40 prod­ucts in­clud­ing Weed­ish Fish gum­mies, ex­tra-large Ger­man choco­late brown­ies, and Seren­ity Tinc­ture—all in­fused with vary­ing de­grees of pot—to about 60 so-called dis­pen­saries in Ari­zona for medic­i­nal use. The com­pany, which opened for busi­ness in April 2014, em­ploys eight peo­ple and has seen sales dou­ble over the past three months, says Noo­nan, who's not to be con­fused with the colum­nist and Ron­ald Rea­gan speech­writer of the same name.

Mar­i­juana is le­gal for adult recre­ational use in Alaska, Colorado, Ore­gon, Wash­ing­ton, and the District of Columbia and for med­i­cal pur­poses in 23 states, the District of Columbia, and Guam. U.S. sales of le­gal cannabis reached $5.4 bil­lion in 2015, up from $4.6 bil­lion the year be­fore, ac­cord­ing to Ar­cView Mar­ket Re­search. Ed­i­bles and other in­fused prod­ucts—de­fined as any­thing other than the bud it­self— make up at least half of the to­tal, dis­pen­sary own­ers say.

“It's prob­a­bly the most ex­cit­ing seg­ment of the mar­i­juana in­dus­try,” says Chris­tian Hage­seth, founder and chair­man of Amer­i­can Cannabis Part­ners, a hold­ing com­pany for mar­i­juana-re­lated busi­nesses. “We still haven't iden­ti­fied who's go­ing to be the Ap­ple com­put­ers or the McDon­ald's ham­burger or the Coca-Cola” of ed­i­bles.

Many peo­ple have heard of rap­per Snoop Dogg's Leafs brand of pot ed­i­bles, but there are scores of com­pa­nies pop­ping up across the coun­try, with names like Dixie Elixirs,

In­cred­i­bles, and BlueKudu, adding new items to the mar­i­juana menu. Keef Cola, a soft-drink line owned by

Can­Core Con­cepts, is ex­pand­ing this year from Colorado to Ore­gon and Ne­vada, ac­cord­ing to the brand's co­founder Erik Knut­son. Its Colorado li­censee, Den­ver Pack­ag­ing, sells Keef Cola in more than 380 dis­pen­saries and turned a profit last year.

De­spite the re­cent mo­men­tum on le­gal­iza­tion, the in­dus­try faces plenty of hur­dles, not the least of which is con­vinc­ing law­mak­ers and the pub­lic that ed­i­ble mar­i­juana prod­ucts are safe. One con­cern is the ob­vi­ous ap­peal of pot-in­fused can­dies, cook­ies, and soda pop to chil­dren.

In the past cou­ple of years, sev­eral states have taken ac­tion, some spurred by re­ports of an in­crease in emer­gency-room ad­mis­sions. Most re­quire mar­i­juana ed­i­bles to be sold in child-re­sis­tant pack­ag­ing that's opaque, so the con­tents aren't vis­i­ble, and free of car­toons or other im­ages that may ap­peal to chil­dren. The Amer­i­can As­so­ci­a­tion of Poi­son Con­trol Cen­ters fielded 352 calls in 2013 and 456 in 2014 about ac­ci­den­tal ex­po­sure to THC, the psy­choac­tive chem­i­cal com­pound in mar­i­juana, in chil­dren un­der 12. In 2014, by con­trast, there were 17,563 re­ports of chil­dren ingest­ing deodorants and 28,009 in­ci­dents in­volv­ing di­a­per cream.

Noo­nan , who grew up in an af­flu­ent fam­ily on Cen­tral Park West in Man­hat­tan, be­gan smug­gling mar­i­juana into the U.S. from Mex­ico af­ter grad­u­at­ing from Ari­zona State Univer­sity in the late '60s. The weed was sup­plied by “farm­ers com­ing down the moun­tains on don­keys with bales,” she re­calls. “It wasn't any kind of syn­di­cate. It wasn't like car­tels.”

Noo­nan was ar­rested in 1969 and spent three months in a Mex­i­can jail. Af­ter serv­ing her time, she re­turned to the U.S. and started deal­ing. The feds caught up with her in 1975. Noo­nan's ex-hus­band was sent to prison for two and a half years while Noo­nan, preg­nant at the time, got pro­ba­tion.

Af­ter her mar­riage broke up, she moved back to New York, worked as a drug coun­selor, then en­rolled at Par­sons School of De­sign. She started her own com­pany as a de­signer, de­vel­oper, and con­trac­tor in the high-end res­i­den­tial mar­ket. She re­lo­cated the busi­ness to Tuc­son in the late 1990s, chang­ing its fo­cus to restau­rants, and be­gan lay­ing the ground­work for Cor­nu­copia af­ter Ari­zona le­gal­ized med­i­cal mar­i­juana in Novem­ber 2010.

The ed­i­bles are baked at a com­mer­cial kitchen, part of a 13,000-square-foot “grow” site where Noo­nan cul­ti­vates and har­vests mar­i­juana. “We are con­stantly tast­ing,” she says, ex­plain­ing that the com­pany first makes un­in­fused ver­sions of its prod­ucts for sam­pling. Once she's sat­is­fied with each batch, her two-per­son sales staff loads the goods into un­marked vans (to avoid at­ten­tion) and de­liv­ers them to dis­pen­saries across the state. What Cor­nu­copia bills as “The World's Best Brownie” can fetch as much as $12.50 retail. It con­tains 40 mil­ligrams of THC. Globe

Far­macy, an Ari­zona dis­pen­sary that sells the brownie, rec­om­mends cus­tomers start with 10-mil­ligram in­cre­ments.

Noo­nan has am­bi­tions to ex­pand to Cal­i­for­nia, Colorado, and Wash­ing­ton state dis­pen­saries through li­cens­ing agree­ments to com­ply with state laws. “Go­ing na­tional is ul­ti­mately the goal,” she says. In the mean­time, she's us­ing Face­book and In­sta­gram to bring at­ten­tion to her brand and col­lect cus­tomer feed­back. “We like that, get­ting com­ments, even if it's neg­a­tive. It all helps.”

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