Chicago cannabis companies are partnering with restaurants and mainstream food brands on new infused products, adding variety among the gummies and chocolates that dominate edible sales.
Cresco Labs’ (OTC: CRLBF) brand Good News is rolling out a THC-infused wing sauce made with Wicker Park sports bar The Fifty/50, just in time for the Super Bowl. Green Thumb Industry’s edible brand Incredibles launched chocolate bars with New York’s Magnolia Bakery just before the holidays last year. And Okay Cannabis, a newer dispensary chain, sells infused brownie and cake mixes using West Town Bakery’s recipes.
The products, which stray from the gummies that so many consumers associate with marijuana edibles, are also a sign the industry is maturing. The restaurants and food brands collaborating on such products no longer feel that entering the cannabis industry poses the risk to their reputation it once did. On the flip side, having an edible option that isn’t just the same old gummy will set dispensaries apart in an increasingly crowded market.
Four years into recreational weed sales in Illinois, new retail outlets are finally opening, creating competition for established shops. The state’s dispensary scene had been dominated by many of the same companies that operated medical-only shops before recreational use was legalized. The state issued new retail licenses after long delays from litigation and the pandemic, and many of those stores started opening last year. There are about 177 dispensaries in Illinois, an increase of more than 50%.
“As the market matures, it gets really competitive and there are a lot of players and a lot of brands,” said Eli Weiner, brand manager for Green Thumb Industry’s Incredibles — no relation to Fifty/50’s Scott Weiner. “It makes us have to be more creative.”
Magnolia Bakery initiated the limited-time partnership with Chicago-based GTI. Incredibles makes two THC-infused chocolate bars as part of the collaboration that use Magnolia desserts as inspiration: the banana pudding bar and Red Velvet Piece Ahhh Cake.
Those flavors were chosen because Magnolia Bakery customers can easily recognize them, and they did not overlap with any existing Incredibles flavor, Eli Weiner said. The goal was to rope in more customers using Magnolia’s gravitas.
“They’re just a bigger brand. They’re more well known. They were on ‘Sex and the City’ and we weren’t. They’ve been around longer than we have,” Eli Weiner said. “It was about establishing ourselves with a big conventional brand.”
For Magnolia, the goals were similar, said Sara Gramling, vice president of communication and partnerships at the bakery. Customers were talking on social media about reaching for Magnolia’s cupcakes when they had the munchies. The partnership was about getting in front of a new audience, and getting people talking about Magnolia’s brand in new ways.
It highlights the “progressive maturation” of the cannabis business into a well-regulated industry, said Nicola Persico, professor of managerial and decision sciences at Northwestern University’s Kellogg School of Management.
“The industry has come out of the shadows, so to speak,” Persico said in an email.
Ultimately, collaborating with mainstream brands makes marijuana more mainstream. It is progress cannabis companies have long been working toward.
For Chicago-based Cresco, borrowing brand equity and expertise from a well-known wing powerhouse just made sense, said Chief Communications Officer Jason Erkes. People already turn to The Fifty/50 for wings on Super Bowl Sunday. The sports bar sells more than 1,000 pounds of chicken wings on a typical big game Sunday, according to a news release from Cresco.
The cannabis company will get the wing sauce from The Fifty/50 and infuse it with a clear and tasteless THC distillate. The wing sauce will be available at select Cresco Sunnyside dispensaries starting Feb. 1. (The Super Bowl is scheduled for Feb. 11.)
The product also offers a way into the advertising frenzy that surrounds the Super Bowl. Cannabis marketing is still “severely regulated,” said Kristoffer Inton, equity strategist at Morningstar.
“You’re not going to see a commercial somewhere to try and get buzz that you’d typically get from a normal advertising campaign,” he said. “Partnering with a known brand is a decent strategy.”
The tactic is a direct evolution from the partnerships between marijuana companies and celebrities such as Snoop Dogg and Martha Stewart, which dominated the industry’s early days, Inton said. However, it could still be some time before collaborations between big, publicly traded companies emerge.
Though these newer products go outside the typical gummy and chocolate edible sandbox, they are still state regulated. The cannabis company or infuser must submit the recipe, the ingredients, the packaging and more for approval.
The challenge will be competing with THC-infused gummies, which have gained market share. In Illinois, more than 50% of consumers said they had consumed gummies in the last six months, according to a fourth quarter survey from market research firm Brightfield Group. That’s up from 44% during the same period in 2021.
There is flavor variety with gummies and they offer convenience — largely because they don’t melt like chocolate, said Matt Zehner, insights manager at market research firm Brightfield Group. Some markets have seen nongummy edible products discontinued because consumers so quickly gravitate toward gummies. Rolling out nongummy edibles will take commitment, he said.
“I do think there’s a lot of room to grow sales in the edible category,” Zehner said. “It does require investment and innovation like we’re starting to see.”