Nearly ten years ago, voters in Colorado made it the first state to legalize the recreational use and sale of cannabis. In the decade since then, eighteen other states and the District of Columbia have followed suit, and many others have legalized medical marijuana.
The tide is turning when it comes to public perception and embrace of this substance. Cannabis bakeries, which supply dispensaries throughout the country, are popping up in each state where it’s legal. That’s what brought nearly 15 bakers to Denver, Colorado on May 15th and 16th. On these two days, The Retail Bakers of America (RBA) teamed up with one of the first recreational cannabis bakeries in the country, Love’s Oven, to host an in-person, two-day workshop at The Cook Street School.
“We here at Love’s Oven are so excited to partner with the Retail Bakers of America for this event,” said Love’s Oven CEO Peggy Moore in the leadup to the workshop. “When they reached out to us, we were thrilled that this group wanted to give its members a look behind the curtains at how legal marijuana bakeries work, the challenges, and the excitement of being part of a new industry.”
“It is so important as the national association for retail bakers that the RBA set the standards and educate our bakers on all topics,” said Bernadette Shanahan-Hass, RBA’s director of operations. “Baking with cannabis is an exciting new lane for most bakers. Teaming with Love’s Oven, the leaders in the baking with cannabis industry, will allow us to ensure our attendees are getting every morsel of correct and useable information.”
Started in 2009, Love’s Oven is seen as a veteran of the Colorado edibles industry and has accumulated a wealth of knowledge in the field during that time. The workshop, titled “Fresh Baked,” featured everything attendees would need to know about the business of baking with cannabis, in-depth baking demos and tours of some of Denver’s finest cannabis bakeries and dispensaries.
Many of the individuals present for the workshop reside in states where recreational cannabis use is either newly legal or still illegal. They are looking for a leg up, gaining knowledge of this lucrative industry and how it works so that they can start selling cannabis-infused baked goods of their own.
The Business of Baking with Cannabis
On the first day of the workshop, Peggy Moore discussed how to start an infused products manufacturing business. The list of products is ever-growing, as more and more innovative minds join the industry. Edibles include the classics like gummies, cookies, brownies and chocolates, but newer items include peanut butter, waffles, honey, BBQ sauce, soda, jerky, crackers, butter and so much more.
In addition, there are topicals and concentrates. Topicals are things that can be applied to the body. They include lotions, body oils, lip balms and bath soaks. Concentrates can be smoked, and include distillate, resin, wax, shatter and capsules.
These are the countless products at a bakery’s disposal, which all combine to generate considerable profits, if done the right ways.
Production must take place in professionally built labs and kitchens following manufacturing practices, so home kitchens or garages won’t cut it in this industry. Health inspections are a huge part of the day-to-day operations, so every aspect of production is under a microscope.
Another important aspect of running a cannabis bakery is the people you hire. You should look for people with passion, just as you would at any retail bakery. They should also have experience, but be willing to learn. You can think about alternative people management techniques, like self-managed teams. Benefits will be important too, as you’ll want to maintain your qualified workforce and keep your employees happy.
Documentation is key. You’ll need:
- Standard operating procedures (SOP’s)
- OSHA training logs
- Equipment maintenance logs
- Corrective action logs
- Other state or local required documents
Regulations and costs are important factors in running a successful business. Licensing fees vary by state and locality, but costs can range from $10,000 up to $100,000 or more annually – double that if you are producing both for the adult use and medical markets. New license fees will typically be higher than renewal fees.
State regulations are overarching and some local governments will add additional regulations. You’ll have to deal with local and state cannabis business regulations, state and/or local environmental health regulations, the State Department of Agriculture, and OSHA. You’ll also have to think about labeling and packaging, occupational licensing, insurance (property and liability), transportation, bonds and location.
In many cities and states, you’ll have to figure out zoning. Your bakery or manufacturing facility can only be located in certain areas of any given city. Keeping in mind, you likely won’t be able to simply transform an existing bakery into a cannabis bakery – you may need to relocate away from residential areas or school zones.
Self-regulation will be smart. That means:
- Good manufacturing practices
- Hazard Analysis and Critical Control Points (HACCP)
- FDA traceability and recall
- Be over compliant – it will save you down the road
- Make friends with your inspectors – see things through their eyes
- Hire staff familiar with lab protocols and food manufacturing
The cost for all of this will be staggering, but not impossible to cover. Build out costs will range between $200,000 and $1 million depending on the size of the facility and scope of products to be produced. You’ll have to add in the cost of the building – either purchasing or leasing – and the licenses specific to your state. Equipment costs can be anywhere from $100,000 to $500,000 depending on products being produced and levels of automation desired – the larger the scope, the more you’ll be producing and the more equipment/staff you’ll need. On top of all of that, packaging and labeling costs will be ongoing.
Speaking of packaging and labeling, there are many things to keep in mind. Among those are state regulations, certified child resistant packaging, label requirements, universal symbol marking and shipping container requirements.
According to Moore, starting a manufacturing facility is a ton of work – cost and regulations are among the chief concerns – but it is very fulfilling. In this ever-evolving industry, it’s important to stay up-to-date on rules and be compliant with them. However, as she says, being a pioneer has its rewards and you have an opportunity to shape a new industry for the better.
Getting into the Weeds
Love’s Oven executive chef Hope Frahm is a talented individual who creates all of the bakery’s recipes. Frahm came to Love’s Oven with an impressive resume, having worked under Wolfgang Puck and Thomas Keller, two of the biggest names in the food industry. Love’s Oven knew that it needed a world class chef to produce a top-level product, and they believe they have achieved that. Frahm has fine-tuned the bakery’s THC extraction method to ensure that customers receive a consistent and effective dose of cannabutter in every bite of its gourmet baked goods.
In the second half of Love’s Oven’s seminar on cannabis baking, Frahm went into detail on the science of baking with cannabis.
According to the National Institute of Health, marijuana refers to the dried leaves, flowers, stems and seeds from the Cannabis sativa or Cannabis indica plant. There are at least 113 different cannabinoids that have been identified, all derived from Canabigerol CBG. Each cannabinoid serves a different function, most notably THC.
Delta 9 tetrahydrocannabinol (THC) is the psychoactive component of marijuana, but the plant itself contains very little THC. It is not until the acid is removed from the cannabinoid through a process called decarboxylation. Cannabidiol (CBD) the most popular of the non-psychoactive component but still needs to be decarboxylated. Cannabinol (CBN) is derived from the degradation of THC.
THC can be extracted from the plant in a variety of ways. Solventless extractions include, but are not limited to, fat infusion, bubble hash and rosin. The most commonly used solventless extraction is cannabutter with the hot new trend being rosin edible. Solvent extractions are hydrocarbon extraction, tinctures and RSO. The most commonly used solvent extraction for edibles is distillate.
The infusion process is a fine science, and the most important part of the process is homogeneity. You can ensure homogeneity within the baked goods by mixing thoroughly, scraping the bowls and tools as best you can. Remember – anything not used is money left in the bowl.
Cannabutter will be lower in potency and primarily used in sweet baked goods, but can also be used in savory items as well. Distillate is good to use in all edibles if you are looking for a little to no hashy taste, but can be harder to dose in smaller batches. Distillate can have a higher risk for testing failure in smaller batches because the margin for error is smaller with the higher potency concentrate.
You’ll always want to test your concentrate to ensure proper dosing. Frahm advises to get comfortable with algebra. Make sure you are fully decarboxylated prior to infusion with the following formula: [THC]+([THC-A] x 0.877)=Max THC
Dosing is important to ensure a consistent end product. You can calculate the amount of milligrams needed for batch by multiplying the piece/package potency by the batch size; then divide by the potency of the concentrate. For example:
- 100mg package x 100 packages = 10000 mg needed
- 10000mg / 900mg/g = 11.1g of concentrate needed
Testing will be vital to your bakery’s success. Among the things to look for are potency, homogeneity, microbials, residual solvents, water activity, heavy metals and terpene profiles. Terpenes are naturally occurring chemical compounds found in plants and some animals. They’re responsible for the aromas, flavors and even colors associated with various types of vegetation. In terms of cannabis, terpenes are what make certain strains smell or taste different from others. They can have different effects on the user, such as calming, mood boosting, appetite suppressing, memory and creativity boosting, skin repair and much more.
On our second day of the workshop, we boarded a bus that took us on a tour of cannabis bakeries and dispensaries. We stopped at Love’s Oven, where Peggy Moore and Hope Frahm showed us their facility and explained in depth the process of how products are developed, produced, tested, packaged and shipped.
Chef Frahm led us through her kitchen and the incredible equipment used to continually generate Love Oven’s offerings. While many pieces of equipment are quite expensive, others are found much cheaper through ingenuity.
We also had the opportunity to visit a dispensary, the final stage of the process, where many of Love’s Oven’s products (among other companies’ products) are sold to a wide customer base. It was an excellent way to finish the experience, and each attendee was able to take away something important from the workshop in their quest to start or expand their own cannabis baking operations.
“The workshop helped us out drastically on seeing where this industry is going. Over the past few years, it has been really exciting watching how the cannabis industry has moved forward and let go of most stereotypes,” says James McMillan Jr, general manager of Tiffany's Bakery and Eatery in Columbia, South Carolina, who attended with his father Jim. “Being able to visit with the owner and head chef of Love’s Oven was one of the highlights of being in this industry. I am so happy that I was able to gather all the knowledge from Chef Hope and how Mrs. Peggy changed the way that the cannabis edible game was in Colorado.”