Day 15: The ‘Werthers of Weed’: Inside the Auxly edibles strategy

Peter Crooks knew he’d have to get creative if he was going to make a cannabis-infused candy that would satisfy federal prohibitions against pot products that might appeal to children.

“We also decided to get a little more sophisticated in our flavour profiles,” Mr. Crooks, a neuropharmacologist by training who previously ran Canada’s Smartest Kitchen, explained during a tour of his new role as chief product innovation officer of Dosecann, the Charlottetown-based cannabis processing division of the Auxly Group. “Grapefruit-hibiscus for example, lemon-lavender, apple-green tea, certain flavours that probably would not immediately appeal to children.”

Open this photo in gallery:

Last week, the company informed Health Canada it would be introducing 80 new varieties of cannabis extract-based products to the market as soon as late December, and is undergoing an expansion that should lead to a tenfold increase in total processing capacity by early 2020. Split nearly down the middle in terms of vapes and edibles, 33 will be food products ranging from chocolate squares to sugar-free lozenges to gummies (though Auxly calls them “chews”) and the rest will be a mix of disposable vape pens and cartridges.

Unlike the edibles strategies of several other cannabis companies, none of the 80 products Dosecann is preparing to launch will feature rapid onset. Some companies claim to have addressed the issue of delayed onset through the use of new and largely untested technologies capable of getting cannabis absorbed by the body in a matter of minutes - not unlike an alcoholic beverage. Auxly says its edibles will still take the usual hour or two to take effect.

“That is more something we are going to look at for 3.0 on controlled release,” said Bob Chapman, Dosecann’s chief science officer who previously led the natural health products program for the National Research Council, a federal Crown corporation. “For the first phase, we really wanted to focus on keeping our formulations simple and homogeneous.”

Open this photo in gallery:

Open this photo in gallery:

For Mr. Crooks, the product he is perhaps most proud of is a twist on the traditional caramel chew infused with 10 milligrams of THC.

“The thought occurred to me of something truly Canadiana, maple syrup and caramel,” he said, noting his use of a coconut puree instead of milk allowed the product to be completely dairy-free. “Caramel pairs very, very nicely with cannabis, cannabis flavours.”

“I think this could be the ‘Werthers of Weed’, that really was my objective,” Mr. Crooks said.

That specific product will not be among Dosecann’s initial 80, but the company is in the process of expanding its annual processing capacity from roughly 15,000 kilograms currently to nearly 150,000 kg in a matter of months.

“We will be going from about one tonne [of plant material] every month to a tonne every day,” said Mr. Chapman. “That will be in two steps, a 600-pound-per-day cold ethanol and then another 1,500-pounds per day also of cold ethanol, so those two will come online in the next 60 days.”

Open this photo in gallery:

Before Auxly purchased Dosecann back in April 2018, when the former was known as Cannabis Wheaton, the Dosecann business plan was a “very similar model to a Valens or MediPharm,” said founder and CEO Greg Boone, referring to rival Canadian extractors. Both Valens and MediPharm are aggressively pursuing white-label strategies whereby they manufacture edibles, vapes and other extract-products on behalf of other brands.

“That was one of the things we wanted to agree upon, the strategy and vision was really to create a platform for extraction, formulation and purification that was specifically for [Auxly] branded products,” Mr. Boone, who was also among the earliest investors in licensed producer The Green Organic Dutchman, said of the acquisition process. “We funnel all of the [Auxly] plant material into this facility, where it is processed specifically for our own use.”