Are you ready to set the bakery industry smouldering with CBD?

By Gill Hyslop

- Last updated on GMT

Related tags Cannabis Cbd THC Bakery market Strategic Growth Partners IBIE

This year, the Vegas-based International Baking Industry Exposition (IBIE) hosted the Cannabis Central pavilion, which shone a light on the opportunities, highs and lows of infusing baked goods with the more mollifying CBD, as well as the more euphoric THC.

Cannabis is one of the buzziest wellness trends out there and continues to gain momentum. While it has a long history of human use – some reports date back as far as 8800-6500 BC – medical marijuana essentially made its appearance in the cultivated world in the 1800s, while its recreational popularity took off in the early 1900s, introduced into American culture by immigrants during the tumultuous years of the Mexican Revolution.

The CBD industry is flourishing, conservatively projected to hit $16bn in the US by 2025. Now legal in many US states – not all, though – it’s popularity has reached new heights with celeb endorsements, including Kim Kardashian West (to overcome the stress of giving birth) and professional golfer Bubba Watson (to promote sleep).

It’s still yet to make its mark on the bakery market, but the organisers of IBIE – held in Las Vegas last month – are hoping to change that, and hosted, for the first time, Cannabis Central, a dedicated space that allowed attendees to meet with suppliers who support this unique space and learn from experts during the many sessions that took place onstage.

One of the presenters was Jerry Smiley, founder of Strategic Growth Partners – a collaborative investment manager – who, with his daughter June, offered a different insight into cannabis trends in bakery.

Bakery and Snacks caught up with the pair to find out more.

Cannabis Jerry 4

“I’ve been coming to this show for over 30 years,”​ said Smiley.

“I’ve worked with startups – right now, I am working with a wheat seed startup – all the way up to finished goods … for companies like ADM, Kellogg’s, Ritz, Flowers [Foods], [Grupo] Bimbo, etcetera. So, bakery’s in my blood.”

The cool things a baker can do

Baking with cannabis Olena Bondarenko
Pic: GettyImages

Turning attention to the new pavilion, June said Cannabis Central is “where you find a lot of folks who are innovating in the space.

“With the bakery history that we have – as well as more recent information that we’ve been definitely keeping our eye on because it’s an ever-changing industry – we can see what is out there and what you [as an innovating producer, baker] can do,”​ said June.

“Why you should be interested in providing a product like this. What interest is there? What do the trends look like? What the space is doing right now and is there room to grow?

“Also, what products are lacking? For example, multi-layered pastries is not something you’ll see in the cannabis space right now. So, it’s definitely an exciting area to be in. Cannabis is very interesting and there’s a lot of cool things that you can do with it.”

Smiley added the takeaway message of their presentation was to help those interested in the space to overcome its many hurdles.

“We think it’s a pretty large opportunity – cannabis is growing rather rapidly in acceptance and by approval from the FDA. The availability of CBD products will increase in c-stores, potentially in bakeries and other places like that,” ​he said.

According to June, cannabis is considered an indulgent ingredient, which can multiply a product’s premium positioning immensely.

“It’s used for a whole lot of things aside from just getting high, so has a lot of avenues,”​ she said.

CBD vs THC

Cannabidiol (CBD) is the lesser-known child of the cannabis sativa​ plant that offers a relaxing, non-intoxicating effect.

First evidence of the plant’s use – both medicinally and in rituals – varies, with some dating back to 750 BC in Central Asia, while others believe archaeological evidence shows use as far back as the Pre-Pottery Neolithic B period (8800-6500 BC).

CBD is purported to provide relief for anxiety, depression and PTSD. It is also marketed to promote sleep and reduce chronic pain. It is also often prescribed to help alleviate certain cancer-related symptoms and heart health.

Cannabis Jerry 3

Tetrahydrocannabinol (THC), on the other hand, is the psychoactive ingredient that enhances euphoria.

“THC would be more like ‘I’m drinking a glass of wine and I would like to have an experience here’. This is a different type of product and definitely not for children,”​ said June Smiley.

“It provides a really good opportunity for bakers because it’s a new challenge … you’ve managed to make really good products thus far, so how can you involve this new ingredient … and create a product that doesn’t exist right now?”

Smiley, too, believes it’s a surmountable challenge as the baking industry has already succeeded in adopting trends like fat-free, plant-based and gluten-free.

“This is just the next thing that I’m certain our industry will be able to handle because they've done all those other things,”​ he said.

Cannbis Jerry 1

The wild wild West

As with any novel ingredient, cannabis comes with a host of challenges.

One of the largest hurdles is FDA approval and cannabis for recreational purposes is currently not legal is certain US states.

“We’re operating in a Wild West right now,”​ exclaimed Smiley.

“The laws are ever-changing and are different between states,”​ concurred June, “so shipping products across state lines [is precarious] … even if it is legal in two states right next to each other, [it’s not certain] that you can ship across state lines.

“There’s a whole host of different legal hoops that you need to jump through,” ​along with hurdles like formulation, shelf life, masking (cannabis has a very distinct flavour), packaging and childproofing.

“It’s an unfamiliar space for a lot of people and an expensive ingredient, which is another hurdle as well: if you mess up a batch, you cannot reformulate.

“You have to be meticulous with your planning and your records”​, especially with dosage, said June, noting that often recipe designers will tinker with ingredients to create a successful product.

“You can't [do that] with this because you won’t know what the content would be and therefore cannot state [on your packaging] the 10 milligrams or whatever.”

That being said, “we would say it is worth it. It’s a very interesting product and there are a lot of cool things that you can do.”

Are you ready?

2019 was a big year for marijuana, with a first-ever congressional vote to approve a bill to end federal marijuana prohibition, which would remove cannabis from the Controlled Substances Act.

Trivia

Cannabis has more than 1,200 slang names, along with a host of terms for consumption of cannabis and describing the state of being under the influence.

Space cake, for example, is the slang name for a cannabis edible.

Wake and bake is the consumption of cannabis early in the morning.

April 20 is the international day for cannabis pride, ostensibly evolving from a ritual started by a group of California teenagers in the 1970s, who smoked marijuana every day at 4:20pm. The habit spread and 420 became a code for smoking marijuana, converting to 4/20 for calendar purposes.

While it wasn’t enacted into law, it was the first major shakeup in the space and indicated that cannabis reform has momentum.

This has left many of the larger CPG companies interested in cannabis waiting in the wings to see which way the wind blows.

CBD 1

“There were a lot of people who said, ‘we’re ready to get in’. The problem was it didn’t get approved, so you don’t have any major players per se right now, because it’s not worth the investment unless you know there’s going to be a payoff,”​ said Smiley.

He added there are, however, a lot of knock-offs.

Cannabis Jerry 2

“But we think it has tremendous double-digit growth rate because, even if we don’t get FDA approval imminently, it’s going to have some natural incremental growth.

“If you look at edible companies – gummy edibles specifically – they’ve been operating prior to legalisation or post-legalisation when it was medicinal, but maybe not recreational. They’ve been doing this for quite a while and there’s a reason why those companies have succeeded: they have put in the foundation to be ready for when it is legal nationally.”

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