Hi All!
I am a pastry chef based out of Dallas looking into manufacturing my own CBD gummies to then sell on an online platform. I am trying to do a little research to wrap my head around start up costs and how to estimate initial demand for the product and I would love your input. I realize there are lots of variables at play that will then determine how I should proceed but if you could share with me based on your own experiences that would be greatly appreciated!
-What is a good ballpark initial start up cost for a small CBD business looking to manufacture in house?
-And then, how to you go about estimating initial demand for the product? What are the average monthly production numbers for a small but successful CBD gummy business? What is a reasonable amount of gummies to produce per month (and maybe for the first 6 months) if you are stating small and by hand? How quickly can I expect to need to scale up production based on your experience?
If these are stupid questions then I apologize but any advice you can share would be awesome! Thanks!
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I would suggest you start with some market research on the platform you’re planning to sell on.
What seem to be the common package and unit sizes?
Is there any way to estimate sale data on the platform?
Without having at least the smallest idea of how many you could sell, you won’t be able to really determine accurate answers.
Everyone is going to have a different definition of “small.”
There are a LOT of threads here on gummies, if you start hunting I’m sure answers or at least things that may lead to answers will show up in front of you.
I guess thats part of my question. What is considered small? I was looking at making my gummies using 3.2mL gumdrop shaped gummy mold and packaging them in 10 piece boxes. (like a chocolate box with the plastic inserts to hold them in place- so that each gummy sits separately and not in a jar- there will be both 25mg and 50mg options) So is 1000 gummies a month (approx. 100 sales a month) a good starting point? Or is that really high or really low? Again, obviously who I am marketing these products to and if they are actually interested in buying my product is an important factor. But what are ballpark gummy production numbers for a start up? What are good benchmark production numbers to base my estimations off of to know if I am doing well or not?
I have read through a lot of the treads and there is a lot of good information out there for sure but I haven’t seen much on initial start up numbers. I did see that someone recommended two different market analysis companies (BDS Analytics and headset) and I am definitely looking into them. But I guess what I was really hoping for is tangible numbers about what peoples real experiences have been.
Well on average retail a packaged 50mg CBD gummy is roughly $1.00 each and people are buying around 30 - 60 a transaction (bottles). How are you planning to be competitive by packaging them in quantities of 10 in packaging that sounds to me to be more artisan? Which makes me ask, what would make your gummy an “artisan” type experience and would a consumer be expected to pay more per unit than they already are for the same medicinal dose?
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That’s a great question and yes, you are correct. The idea is to create an “artisan” product. But it’s less about what makes the product different and more about who I will market the product to. My ideal client is someone who is willing to pay more for the product in order to have an elevated CBD buying experience. People obviously want a quality product (and I intend to create a product that is unique to the market place) but they also want to be a part of something and they want to buy a product that makes them feel a certain way. This is what I plan to do differently. I don’t just want to create a product, I want to create a brand experience. I realize that may sound highly optimistic and a little naive to think people will pay more for this but I work at a high end bakery that caters to the luxury market in Dallas. I have talked to a lot of people about this and have a pretty clear idea of how I plan to do that. What I don’t know is when I read on a thread that their in house team is capable of producing 5,600 gummies per day is that an astronomical amount of gummies to aspire to one day make? Or is that pretty typical for large gummy operation? What are industry benchmark production numbers for a small, medium, and large operation?
I know a few people are cranking out more than that daily, but I believe it takes a pretty substantial investment to get there. Also if you are planning on taking a more artisan aproach being “hand made” may be a selling point that has its own intrinsic value to it. In that case it may be hard to compete with the larger producers. It seems to be an industry standard to sell 50mg gummies cbd for .25 or less wholesale. Therefore I see you having two approaches, agressively market the product to build the brand off advertising/packaging and utilize automation to compete at scale with other producers or go fully to the artisan side and market them as hand made with high quality ingredient. For the more artisan path I would highly recommend using rosin as a source for your cbd and creating a differentiated product that way while marketing that it is a fully solventless product. Just my two cents on your situation, good luck with your venture and watch out for the archaic texas laws around hemp/cbd in food products in general. The epidiolex patent has the DEA all riled up about food products.
I actually love the idea of using the rosin and have reached out to a few different people to inquire more about it. There is actually a company out of LA called Rose that offer gummies made with flower rosin. However they only have 10mg options. Is that pretty typical for rosin? Is there a reason you wouldn’t dose higher? Or is that just their personal dosage choice based on the size of the gummy they offer you think?
My guess is it would be due to personal choice. You should be able to get to 50 no problem
If you are looking to market local at all I would weigh that you will have a rough time. Delta 8 and 9 are going to be the only competitive cannabinoids out there if you’re looking to make anything “artisan” especially dallas market. CBD edibles are just so cheap and can be made so well by people that have been running it up for years and years. If you do a rosin press you can just do the math and make it 10 or so mg D9 and full spec which will is in my opinion the best option.
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Yah hemp rosin can be 2-5% thc depending on input material so you would probably be able to get a decent amount of thc in it. Careful though Texas is harsh on anything even inputs over .3% so you wpuld have to have a license most likely
Yea the .3% is net weight so you make a larger gummy and keep the scale right your allowance goes up. Ive made a few edibles upwards of 25mg D9 that are compliant and hemp. Those are by far the best texas has to offer at the moment.
That, I suppose, is the wonder of the internet. I don’t have to market only locally. I could send targeted adds to cities where CBD is already accepted (Like LA, Austin, Denver, Portland etc.) and then as awareness and trust of the brand grows I can target cities where CBD is legal but not as widely accepted (like Dallas). One benefit of the solventless CBD option is that it is deemed healthier due to the fact that it is free of residual chemical contaminants. Potentially paired with a vegan/ sugar free gummy option and this could be a really great way to market to certain segments of the population that care about what they put into their bodies. Which might be especially useful if I did want to market locally in the Dallas area. Rosin may not be the answer I am looking for but I think it is certainly a solid option at the moment. But any additional thoughts on the matter would be greatly appreciated.
Realistically its gonna be hard to compete in la, denver, Portland and all established areas because they are saturated the the extreme with product. Also if youre not using automation its gonna be nearly impossible unless youre hyper efficient with your practices
Are you saying that I would need to automate to keep up with the demand in general? Or just if I were to try to market to the cities that are saturated already?
Realistically this is a nationalized market. Producing for the cheapest near you doesnt matter much when everyone else can order 10k cbd gummies a week and package them to sell for 1/2 your price. I dont think that thinking of it like a local busines is a good idea at all. If you want to go down that route i wouldnt even make the gummies yourself and just brand and market someone elses mass produced gummies.
It is just figuring out what market you want to be in and how you can find a niche. Anything on earth can be sold and profitable if marketed right realistically.
Where would you suggest I look to learn more about the in’s and out’s of the cannabis industry? Are there different websites out there (other than this one obviously) that I could check out? Or certain particular people in the industry that you recommend I talk to? Or one particular convention I should check out thats a better option than the others to potentially attend?
Check out Kush.com and see what others are selling, that may give you a better idea
ISO Experience with150kg Per Hour Gummy Machine - #2 by jimmytian8 this is what I mean about your competition. Its already being scaled to infinity
There are a few events coming up in Dallas with local/ national vendors and people in canna politics. If you want you can shoot me a DM and I will send you some info