MJBizMag September 2020 - 114

QuestionoftheMonth | Edibles Price Inputs
By Omar Sacirbey
E
ach month we survey a group of cannabis executives and ask them an
industry-related question. We welcome your suggestions for topics. Email us
at magazine@mjbizdaily.com. At the beginning of the year, chocolate prices
were predicted to rise during 2020 and, more recently, sugar prices have rebounded
from near-record lows. Has your cannabis edibles business been affected by price
changes to inputs used in making your products?
Brian Scott
Vice president of new products and co-founder, Valhalla Confections, Santa Rosa, California
We have seen significant fluctuations in the cost of our ingredients over the last few
months-especially the cost of chocolate and sugar. We always want to keep our wholesale prices
as consistent as possible. To that end, our pricing models can tolerate some fluctuation in the cost
of our ingredients while still allowing us to keep our product pricing steady.
Happily, over the past few months we've seen a significant uptick in sales. That's partly because
our new line of chocolates and four new gummy flavors have been really popular. Second, during
the COVID-19 crisis, a lot of people are switching to edibles, especially the types of products we
produce: gummies and chocolates.
These sales increases have allowed us to do more bulk purchases of ingredients, which are
more cost-effective. Also, the cost of the cannabis we use has dropped slightly in 2020. Taken
together, this has allowed us to keep our wholesale prices competitive without compromising on
quality, despite the fluctuations in costs.
Andrew Schrot
CEO, BlueKudu, Denver
We have the experience of adapting to many changes in vendor pricing. Fortunately, BlueKudu
has not been affected by a price increase in our chocolate sourcing within the past couple of
years. However, we have incurred a small increase in the cost of our sugar.
Our production facility has the storage space for extra inventory. We have used the storage
space to our advantage and negotiated purchasing our ingredients in larger quantities in order to
maintain a low cost. Most of our ingredients, such as sugar, do not require refrigerator space and
have a long shelf life.
Tim Schuler
President, Detroit Fudge Co., Detroit
Our main ingredient is obviously distillate made by our sister company, Cannalicious Labs.
Our raw material prices-namely fudge and raw chocolate-have remained stable through 2020,
and it helps to be producing the most chocolate edibles in the state of Michigan. It allows us to
order ... our raw ingredients by the pallet and have them directly shipped from the manufacturers
to our kitchen. We are constantly monitoring all of our raw materials so we can always deliver a
finished product at a great price.
114 Marijuana Business Magazine | September 2020
Have price
changes for inputs
affected your
cannabis edibles
business?

MJBizMag September 2020

Table of Contents for the Digital Edition of MJBizMag September 2020