New Colorado Edibles Rules: Major Cost for Producers, ‘Blip on the Radar’ for Others

By John Schroyer

New labeling rulesthat take effect Oct. 1 for marijuana edibles produced in Colorado have been a huge expense for many infused products manufacturers and may cause headaches for retailers, too.

Edibles companies have spent upwards of six figures to retool manufacturing equipment, retrain employees and pay for new packaging.

Retailers, meanwhile, could be left with unsold inventory that doesnt meet the new standards, which apply to both recreational and medical products.

Any unsold inventory could prove a boon for consumers, with retailers forced tounloadedibles at steep discounts at the end of November. But that could have a negative impact on retailers bottom line. By Dec. 1, dispensaries and recreational stores must sell only products that comply with the new regulations.

The rules are intended to clarify the single-serving THC content for adults andkeep edibles out of the hands of children.

Whatever the case, thenew requirements have proven pricey for edibles makers.

The Cost of Compliance

Nancy Whiteman, the co-owner of Boulder-based Wana Brands, estimates her company spent around $100,000 to revamp its entire production process.

Andrew Schrot, the CEO of infused chocolate bar maker BlueKudu, said his Denver company spent more than $30,000 on new molds for its bars to comply with the regulations plus an estimated $5,000 more a month for additional chocolate to make the bars larger so they can accommodate the newly mandated THC logo.

The laws change so frequently, specifically for edibles companies, that you have to have some financial assets set aside when things like this come up, Schrot said.

It is going to be quite a significant financial cost to most companies to change their production procedures and put this stamp on every individual piece, and I think thats where you may see some edibles companies either change the product that they offer to the market, or change their pricing.

The Rules Themselves

Under the new rules:

• All edibles must have one of two visible diamond-shaped stamps on the front of the package identifying the product as containing THC. The stamp must also be on every individual serving, which means every 10-milligram dose for solid recreational edibles such as chocolates and gummies.
• Medical edibles may choose to determine standard portions, according to a press release from Colorados Marijuana Enforcement Division; the medical edibles stamp also must include an M.
• All edibles must come in new packaging that states: Contains Marijuana. Keep out of reach of children.
• The words candy and candies cannot be used on packaging, unless theyre part of the companys name.
• Labels must include potency and state that the product has been tested for contaminants.
• Health-related claims are prohibited.

The new rules bar retailers from selling infused products after Nov. 30 that dont comply with the labeling rules.

Happy Thanksgiving?

As a result, storefronts that have edibles products without that THC labeling at the end of November may wind up trying to unload that inventory, just to get whatever they can for it.

Theres absolutely going to be a lot of fire sales at the end of November, predicted Wanda James, owner of the Denver adult-use shop Simply Pure. Because of silly things like labeling, we now have to find a way of moving all that product on our shelves.

James called the new rules ridiculous, and said theyre an unnecessary burden on law-abiding companies.

None of this is a bump in the road. Even the larger edibles companies are getting hit. Having to replace $100,000 in packaging or $60,000 in packaging is a hit, no matter how big you are, James said.

Whiteman of Wana Brands added that Colorados edibles makers will probably weather the new rules especially because the industry has known the changes were on the way for months. But there may be some smaller edibles producers that cant afford to make the transition.

I suspect that this regulation is going to put some edibles manufacturers out of business, because theyre going to find it too expensive to ...