Case Study: Colorado-Based Stillwater (RIPPLE) Demonstrates Edibles Blueprint

With states continuing to legalize marijuana, and cannabis 2.0 products primed for their roll-out in Canada, we spoke with private edibles company Stillwater to learn more about the space.

They are based in Colorado and sell CBD and THC edibles and dissolvables, made from their proprietary RIPPLE water-soluble cannabinoid distillates.

Even though they only sell product in Colorado, their RIPPLE dissolvables rank in the Top 5 edibles by sales (units) across the entire United States.

Clearly, they are doing something right, so we looked closer at their keys to success.

Start With a Quality Product

The company is focused on creating a quality product that delivers a consistent experience for the consumer, and it starts with their RIPPLE technology. The company is even restructuring to make RIPPLE the umbrella company, and Stillwater a retail brand.

When dissolved in liquids, the cannabinoids can enter your bloodstream sooner after ingestion.

This technology ensures the cannabinoids fully dissolve into a water solution, which results in more consistent dosing and homogeneity throughout their products. If the cannabinoids can’t fully dissolve, that means there will be pockets of higher concentration in the production process, which can result in inconsistent dosing across products.

The importance of water-solubility is driven by the way we absorb cannabinoids. When dissolved in liquids, the cannabinoids can enter your bloodstream sooner after ingestion, for example, sublingual or intestinal as opposed to hepatic (liver). This earlier onset is what most companies are striving for.

Tying this back to new product developments, we believe having fast-acting, water-soluble cannabinoid products will almost certainly be table stakes across all producers and extractors. Anything less and products simply won’t deliver the desired results.

Investors should look for companies that appreciate the importance of reliability and consistency, as there will likely be some challenges, similar to what we’ve seen with the initial consistency and quality of some flower products.

It’s also worth noting that achieving consistency doesn’t come without its challenges. Stillwater strives to achieve concentration variances of less than 2-3%, which is substantially lower than Colorado’s acceptable concentration variance of 15%.

These stringent goals also necessitate that cannabinoid oil inputs meet stringent consistency requirements. Extending this to other players in the space, we can see that vertically integrated companies need to be able to produce consistent oils, from consistent flower input, or they will face challenges meeting QA product requirements with their edibles and dissolvables.

Follow-up with a CPG Team and Strategy

The second factor to their success is their strategy.

As expected, they are treating the space like a CPG-business, which is what it will ultimately become. While everyone has focused on production capacity or footprint to date, ultimately it will be about brands.

With Caliper Holdings as the parent company, they bring a wealth of CPG experience to the table. This has led them to focus on product quality and consistency.

They have also taken a Trulieve-like approach of building a strong base in single market before looking elsewhere.

They have products in over 400 dispensaries across Colorado, with strong relationships with the different retail outlets. Their market share is almost 5% of the total edibles market in Colorado. After 3+ years of operation, they are only now looking at opportunities to expand to new states.

According to company representatives, they started the water-soluble dissolvables category nearly from scratch three years ago and have since grown their brand into a top-selling edible in the U.S.

Moving forward they will continue to try and define the edibles and dissolvables category with the rollout of new products. In the coming weeks, they will be launching a “quick sticks” product that consumers pour directly on their tongue.

While these types of dissolvables may seem odd at first glance, investors should expect new categories to be created from scratch as legalization creates new markets. While it’s unclear exactly what products and brands will dominate, it’s guaranteed that it will be the products that deliver a consistent, high-quality experience.

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The opinions provided in this article are those of the author and do not constitute investment advice. Readers should assume that the author and/or employees of Capital 10X hold positions in the company or companies mentioned in the article. For more information, please see our Content Disclaimer.

Evan Veryard
Evan Veryard has a Bachelor's of Chemical Engineering from McGill University and a MaSc. of Chemical Engineering from RMC. He has over 6 years of research experience focusing on industrial materials. Address: 682 Indian Road, Toronto, Ontario, M6P 2C9. Phone: 416-721-8257.
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