The cannabis industry is constantly expanding and moving into new territories
The cannabis stock sector is booming, with legalization and decriminalization of marijuana in the United States and abroad rapidly expanding. Investors want to know more about the cannabis investment opportunities from industry-leading experts.
Today, we chatted with Kim Sanchez Rael of Azuca. Kim has spent over 10 years as a venture capitalist investing in early stage technology companies. Now at the helm of leading edibles cannabis brand Azuca, known for its fast-acting TiME INFUSION™ technology, Rael can discuss innovation in the edibles marketplace, pushing the envelope and bringing an entirely new cannabis experience to consumers.
Schaeffer's: What is your perspective on the cannabis edibles industry? Is it just taking off, oversaturated, plenty of room for new entrants?
Kim Rael: All of the above. As in everything cannabis, because interstate commerce is not a current option, there are simultaneously geographies that are oversaturated at the same time there are underserved markets. Colorado, for example, is one of the most mature markets in the US, and there are hundreds of gummy SKU’s on the market. Meanwhile, in New York, edibles are still a small category and are severely constrained by the current regulatory environment. In other markets, like Massachusetts, the market got a slower than anticipated start, but is now flourishing.
I think there is plenty of room for new entrants in edibles and I would encourage partnerships and licensing business models to enable cost-effective market entrance. Full vertical integration is a bad business model in my opinion (though obviously required by some jurisdictions). Figure out what you can be best in the world at in the cannabis value chain and focus on that!
Schaeffer's: What kind of demand are you seeing for cannabis edibles?
Kim Rael: What we are really seeing is a rapid migration from “traditional” slow-onset edibles to fast acting formulations. I say it every day: Traditional edibles are dead like dial-up internet is dead. Slow, painful, unpredictable. Why would anyone put up with that today? In addition to our inaugural product that makes edibles taste great and take effect in 5-15 minutes for most people, we just launched a groundbreaking solution for fast-acting infused chocolate.
It’s very easy for edibles manufacturers to incorporate into their existing process and tastes great. Onset varies depending on each individuals’ metabolism and tolerance, but approximately 60% of respondents reported onset in less than 20 minutes. 6 minutes for me personally. I’m a low-dose consumer.
Schaeffer's: With the bigger guys encroaching on the space now, how do you see that impacting the industry overall?
Kim Rael: I think we will see continued consolidation in the industry, which, over time will strengthen the industry.
Schaeffer's: Will Azuca expand into other areas beyond cannabis edibles? Why or why not?
We are definitely moving into beverages and expanding our line of beverage mixers. I think that a mega-trend will be people replacing recreational alcohol with cannabis over time. Cannabis is a healing plant, not an addictive poison to our bodies like alcohol. In the future, we will be enjoying cannabis-infused elixirs and alcohol-free cocktails like we consume wine and margaritas today. The regulatory environment will have to catch up to consumer interest in healthier alternatives to alcohol, but I think we will get there in a few years. Our formulations are perfectly designed for enjoyable, predictable beverages for social consumption.
Schaeffer's: Tell us more about Azuca and it's products.
Kim Rael: Traditional oil-based edibles are processed by the liver, making it impossible, due to variabilities in liver function, to have a predictable experience. Azuca TiME INFUSION™ creates a unique thermodynamic matrix of individually encapsulated cannabinoid molecules, resulting in a hydrophilic, or water-friendly ingredient. This hydrophilic technology bypasses that lengthy trip through the liver, and instead absorbs directly into the soft tissues of the mouth, esophagus, and stomach to reach your endocannabinoid receptors quickly and efficiently. This allows these high-quality cannabinoids to take effect in a groundbreaking, consistent, and predictable two to fifteen minutes.
Cannabis is among the fastest growing industries globally. Azuca solves the biggest problem in one of the fastest growing categories of the legal cannabis market. We are commercializing our patent-pending technology that makes cannabis edibles take effect in 2-15 minutes, versus traditional edibles which take up to 90 minutes.
This is an industry-changing breakthrough as many new adopters in cannabis are looking for alternatives to smoking or vaping. Azuca recently commercially launched both THC and CBD product lines. In addition to our proprietary formulations, Azuca has a highly capital efficient business model that is designed to scale rapidly across jurisdictional and regulatory boundaries. Analogous to a hybrid of the “Intel Inside” and “Coca-Cola” strategies, Azuca partners with other edible manufacturers who have established operations, distribution and compliance infrastructure in their respective jurisdictions.
*This article is published for purely informative purposes. Azuca's opinions are not necessarily a reflection in any way of those of Schaeffer's Investment Research. We publish information about companies in which we believe our readers may be interested. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalized advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as SIR's solicitation to effect, or attempt to effect, any transaction in a security. Investments in the securities markets, and especially in options and futures, are speculative and involve substantial risk. The information that we provide or that is derived from our website should not be a substitute for advice from an investment professional. We encourage you to obtain personal advice from your professional investment advisor and to make independent investigations before acting on the information that you obtain from SIR or derive from our website.*