If you’re a baker or chef (or just someone who’s watched the now trending ‘The Bear’ on Hulu) you know how anxiety-ridden and stressful the job can be. Early mornings, or late nights, are riddled with customer complaints, staffing issues, and oftentimes, unfulfilling when it comes to appropriate pay.
For these reasons (and more), the culinary community and the cannabis community go hand in hand. In fact, this relationship has already motivated a plethora of chefs like LA locals, Enrique Olvera, and The Yeastie Boys to become edible manufacturers in California, themselves.
Are you one of these culinary or cannabis enthusiasts seeking to align your two passions for a bigger and more fulfilling payoff? Private label edibles and baking for dispensaries have never been more popular for professionals and personal foodies looking to capitalize on the budding cannabis market. So, where can you start?
Here, we’ll dive deep into how to easily become an infused product manufacturer with shared cannabis kitchen space and affordable licensing options.
The ‘Why’ Behind Private Label Edibles
Smoking cannabis naturally produces creative edible ideas from the minds of current cannapreneurs, pastry chefs, sous chefs, and just everyday consumers - who don’t always have the funds or capabilities to make those edible visions come to life. Even with widespread legalization across the US, it’s been hard for mom-and-pop shops to make it big (or even turn a profit) when you consider the cost of becoming a licensed operator, especially in California.
Today, traditional licensing options in California cost a minimum of $1 million, and that doesn’t even include the operating costs it’ll take to keep your business up, running, and profitable. But before we scare you away, it’s important to know that the edibles category's market share is growing exponentially as more consumers become comfortable with their soothing (and satisfying!) effects.
Headset and MJBizDaily recently reported that the sales of marijuana-infused edibles grew more than ‘sales of all MJ products in CA, CO, MI, OR, and WA’ in 2021. As you may suspect, cannabis gummies made up the majority of 2021 edible sales (at 70% of the category’s total market share in 6 recreational states) and accounted for nearly $1 billion in retail sales alone. The thriving market indicates there is an opportunity to be successful in the cannabis industry by manufacturing edibles.
With the "why" behind private label edibles now under your belt, let’s get to the "what" of private label edibles and the definition of the terminology. Private label edibles are similar to any white label product in the fact that one entity produces the product, and another can brand it however they so choose. That means, even if you don’t have culinary or cannabis-infused kitchen experience - you can brand your own products with your own private label or white label and very easily become a player in the edibles game.
But, how? We’ll get to that next.
3 Steps to Becoming an Edible Manufacturer in California
Use the following three steps as your guide to becoming the next up-and-coming edible manufacturer in California.
#1 - Crafting a business plan
A business plan is an initial starting point for every business, no matter the industry. In cannabis, it’s even more important to do your research and due diligence while crafting one. That’s because your ability to become licensed is dependent on a sound business plan that’s reviewed by the state’s Department of Cannabis Control.
To be sure you’re setting yourself up for success, you should ask yourself the following questions while compiling your edible business plan -
- What type(s) of edibles will you produce?
- How will they stand out from their current competitors?
- Where will you produce the edibles? (A facility is required to apply for licensing!)
- Where will you get the flower or oil to make edibles and how much will it cost?
- Will you cook them yourself, or will you need to find talent?
- What kind of license will you need to produce your edibles?
- How will you distribute or sell your edibles?
#2 - Funding and licensing
On to funding - every business needs some type of capital to get off the ground. It’s just a question of how much and from where. However, unlike other industries, since cannabis isn’t federally legalized, new business owners have fewer traditional business loan options. Hence, why it’s been so difficult for small businesses and fresh cannapreneurs to break into the biz.
Luckily, for those interested in private label edibles or baking for dispensaries - there’s a lesser-known S-type license in California that helps potential licensees get their start for less. A Type-S License is classified as “shared-use” and allows licensees to work in facilities that have a master manufacturing license that is designated as a ‘Primary S-Type License’.
To add to its appeal, the Type-S license can cost under $50,000 and is typically issued in 60 days vs 1+ years for others. Not to mention, the lower capital requirements for Type-S licenses also increase the likelihood of a company turning a profit and avoiding the fate of the 37% that are not profitable.
Because the Type-S Licensee is using the primary Type-S License’s facility, equipment, and space to produce their own brand or product - it helps save on initial operational costs and much more. Think of it like a WeWork with kitchens, or Cloud Kitchens used as commercial kitchen shared space.
#3 - Securing a facility
Starting an edible business in California will require you to secure a facility or cannabis kitchen, regardless of your plan, funding source, or licensing type. That means you’ll also need to consider the cost of cannabis kitchen equipment and cannabis kitchen supplies, too.
In the initial planning stages of your edibles business, you should also consider the quality of the equipment you can afford and how it might affect the quality of your end product. Especially considering the quality of your product will affect how you price it, too.
To make all three of these steps that much easier to conquer, California is now home to a select few full-service type S licensed facilities. These cannabis kitchens act like any other commercial kitchen shared space (like Cloud Kitchens) but are equipped with specialized cannabis kitchen equipment, cannabis kitchen supplies, and often offer private label edibles opportunities, too.
From Chef to Infused Product Manufacturer
Now that you know the profitable benefits of becoming an infused product manufacturer or private label edible producer and the simple and cost-effective steps to do so, what’s next?
Finding the right cannabis kitchen or private label edibles partner.
At My Green Network, we exist to enhance the edible community by increasing accessibility for culinary or cannabis connoisseurs. Our s-type licensed facility helps you turn your dream or passion project into reality. At a fraction of standard licensing costs and with everything you need in a state-of-the-art, cannabis-friendly commercial kitchen shared space.
Learn more about our community of ‘chef’s turned edible manufacturers in California’ now by visiting our website or connecting with us socially on LinkedIn. Ready to become one yourself? Schedule a tour of our Santa Ana facility now.
Want a step-by-step guide to learning how to sell edibles to a dispensary in California? Download our complimentary guide for industry statistics, the most cost-effective ways to do so, and actionable tips you can take now to get started.