“People will try anything once,” said Ryan Crane, who launched sparkling teas under the Tempo brand in late 2017, and a line of tea-based shots in early 2019 featuring 25mg of hemp derived CBD (MSRP $6.99) sold in independent retailers, coffee shops and gyms in the Midwest.
“But if they don’t get the result they are expecting, they are not coming back. Building a brand around CBD – or anything else - is about building consumer loyalty.”
And this begins with careful sourcing, thoughtful formulation, and a focused go-to-market strategy, said Crane, who studied neuroscience at Princeton and recently gave a TEDx Talk on the therapeutic potential of CBD.
Sourcing: The Wild West
When it comes to sourcing CBD, he said, “It’s the Wild West out there still. There’s a lot of quantity out there in the market but not a ton of quality. Reputable suppliers will offer a CoA [certificate of analysis] but of course you want to test at your end as well.
“Sometimes when things go awry in the industry, it’s due to bad or irresponsible actors, but sometimes it’s a function of what’s going on in the production process.
“So the first filter is: am I getting a quality product? But then you have to ask: am I getting the right ingredient for my product? You can have 20 quality suppliers but maybe only one is right for your particular product.”
Onset time, flavor impact, resilience to pasteurization, bioavailability
Chicago-based Tempo – which was looking for a water-soluble CBD ingredient for its wellness shots, which also include brewed tea, juice concentrates and functional ingredients such as turmeric and ashwagandha – explored multiple options to get the right fit, he explained.
“In the world of water solubles, you get offered a lot of different emulsions, macro, micro, nano emulsions, different types of liposomes, and then you have to consider onset time, flavor impact, resilience to pasteurization, and bioavailability.”
When it comes to the latter, he said, “I wish these things were more standardized, and I’d love to say the science is great on this, but it’s not. So sometimes they [CBD suppliers] claim they have performed their own studies [on bioavailability], but I can’t confirm those studies have been done, as they don’t share them.
“And then sometimes they claim bioavailability by proxy. So take nano-emulsions, which are considered more bioavailable, and people will say this product is 50-70% percent more bioavailable than a macro-emulsion, but it’s based on a study done on [a nano emulsion of] another [oil-based] dietary supplement. Conceptually there is logic to apply there, but they have just made an extrapolation.”
Extract or isolate?
When it comes to selecting an isolate (ie. just CBD) or a full/broad spectrum hemp extract (which contains other components as well as CBD), the science often referenced in the industry has nearly all been done with isolates, not extracts, he noted: “Some purists say you need a broad or full spectrum extract, which makes sense on some levels, but I personally don’t know of any hard science that validates that.
“Take caffeine. We know it reduces fatigue, and we’ve acknowledged that the isolate delivers that effect – without the whole plant. Maybe we’ll learn there are functional benefits to cannabinoids in certain ratios, but when you’re buying broad or full spectrum extracts, you won’t get those consistent ratios from batch to batch anyway, so in the end, we opted for an isolate.”
Dosage: 'A big issue that needs to be resolved in this market'
The question of appropriate dosages of CBD for foods and supplements is a “big issue that needs to be resolved in this market,” while the mode of administration (inhalation, ingestion, absorption etc) also makes a big difference in terms of speed of onset and the impact on the user, he added
“You see results on some clinical trials with people using up to 1,000mg, whereas if you walk into a shop, you could get product with 5mg. In part this is because CBD is expensive, but I think it’s also because the serving size for THC [the psychoactive component in cannabis] is often 5-10mg, even though CBD doesn’t effect the endocannabinoid system the same way, and people have just applied the same logic.”
He added: “We know anecdotally from daily users of CBD that people often feel the effects with 40-50mg of oil but that might have only 10% bioavailability, whereas if you have something that is much more bioavailable, you can use less. We wanted something that could be functional with a single serving, but we also didn’t want to overload it, as people might be consuming multiple products [containing CBD] in one day.”
Claims on pack
When it comes to claims, Tempo doesn't make any, he said, “It would be irresponsible to state that our product does anything unless we have validated that claim on our particular product, plus everyone’s biology is different.”
Formulation: CBD and caffeine do mix
Asked whether it made sense for formulators to combine CBD – which people often take to help them sleep – and caffeine, which is a stimulant, he said: “It’s a common misconception is that CBD induces fatigue, but it actually doesn’t make you drowsy.”
The reason CBD may aid sleep is most likely because it can reduce anxiety/stress and help with pain, two things that often keep people awake at night, he added.
As for the CBD/caffeine combination, which features in Tempo’s ‘Focus’ shot, he said, it seems to work very well: “I look at tea as a great example, which contains caffeine, a stimulant, and l-theanine, which gives you a more balanced energy profile. Caffeine is the upper, but l-theanine helps to smooth it out.”
Regulatory climate
When it comes to regulatory questions around CBD, he said, “The FDA is in a tough spot, as everyone wants answers now.”
While the agency has been pretty clear that it does not consider CBD to be a lawful dietary ingredient, it has also consistently noted that its enforcement activity is focused on companies making egregious claims, he said, which provides some measure of reassurance for brands, even if some states have cracked down on hemp-derived CBD.
Go to market strategy: Grab, hook, and hold
Given that brands are limited in what they can say on pack about CBD, said Crane, who predicts more retailers will build dedicated CBD sets in the first instance rather than spreading products throughout the store, “a lot of our strategy is a grab, hook, and hold concept, so we get out in the field and engage with consumers.”
Credit card processing: ‘Most traditional processors are still taking an overly cautious approach’
Asked about selling CBD products online, he said: “In terms of credit card processing, it can be very tricky right now; most traditional processors are still taking an overly cautious approach to the category and waiting on the sidelines.
“Some operators have taken an ‘ask for forgiveness, not permission,’ approach to e-commerce payment processing. It took us several months to identify a good solution, but I'm happy to say that we finally have a credit card payment processing system (approved by the payment processing vendor) on our website.”
Watch Crane's TEDx talk below:
