TransCanna’s (TCAN.C) recent acquisition of SolDaze is already being put to good use.
On Tuesday, the Vancouver-based marijuana branding company announced it had already begun receiving pre-orders for a new line of cannabis-infused snacks, putting it one step closer to tapping into the fast-growing edibles market.
Fruit and spice and everything nice
In an official Tuesday press release, TransCanna announced the launch of a new Spicy Mango line of cannabis-infused snacks produced by the recently acquired SolDaze, an award-winning edibles company based in California. TransCanna is presently in receipt of pre-orders for the new edibles line, with full shipments expected to commence in the second week of July.
SolDaze President Shawn Shelvin explained the rationale behind the mango spice flavor:
“We did significant flavor profile testing to come up with a recipe that allows the flavor of the mango to not be overpowered by the spice. There is a nice, even sweetness with a mild spice kick. We feel this flavor reaches all consumers and our dispensaries that we are selling into as well as our distributors.”
That, and a nice organic kick of CBD/THC, probably hits the spot.
The announcement comes less than two weeks after TransCanna filed its intent to acquire SolDaze through a combination of cash and common shares.
By purchasing SolDaze, TransCanna brings one of California’s fastest-growing branded cannabis producers under its purview. SolDaze has a 196,000 square-foot facility and more than 100 branded products in its catalogue.
SolDaze has won numerous awards, taking first place for packaging design and second place for infused edibles in the 2018 Emerald Cup (the Super Bowl of Northern California’s pot industry).
TransCanna targeted the company for three reasons: stock keeping unit velocity, rising revenues and product differentiation.
In other words, SolDaze is a proven company that will help TransCanna diversify in a highly competitive market.
Tastiest cannabis market
Edibles are expected to become one of the biggest segments of the legal marijuana industry, putting TransCanna in a strong relative position early in the game.
According to Zion Market Research, the global market for cannabis edibles was valued at nearly $2.4 billion in 2018. The market will grow at a compound annual growth rate of 25.4% between 2019 and 2025, reaching $11.6 billion.
A separate study from ArcView Market Research and BDS Analytics predicts North America’s edibles market to be valued at $4.1 billion in the next three years. That’s a four-fold increase compared with 2017.
Thanks to Colorado, we can be highly confident that these numbers are accurate. That’s because Colorado offers an ideal use-case of the value of legal cannabis.
Take a look at the state’s marijuana sales between 2014 and 2019:
And here are the actual numbers (that’s a lot of tax income for the state):
Digging deeper into the numbers, we find that 64% of Colorado’s adult-use marijuana customers have tried edibles, according to ArcView/BDS.
In terms of market share, edibles accounted for nearly a quarter of total adult-use cannabis consumption in 2017. Take a look:
ArcView and BDS believe that cannabis edibles will likely account for 14% of North America’s cannabis market by 2022. A huge opportunity is at stake for producers that can offer tasty products infused with the goods stuff.
And as it turns out, edibles are much easier to brand than other marijuana product segments. Companies that stand out with alluring branding and marketing campaigns are more likely to succeed.
SolDaze appears to tick all these boxes, which means TransCanna obviously did its research.
Full disclosure: Transcanna Holdings is an Equity.Guru marketing client.