Christine Smith, founder, and CEO of Grön Edibles, provided an exclusive interview, offering a deep dive into the economic dynamics of operating a cannabis edibles brand across diverse U.S. markets. This strategic move reflects the growing presence of Grön, now operating in eight U.S. and Canadian markets.
Smith emphasized the importance of selecting states based on thorough market analysis. Each state poses unique regulatory and market challenges, influencing Grön’s expansion strategy. Ohio’s recent shift to adult use and limited license model presents opportunities similar to past successes in Missouri. New York, with its emphasis on brand scalability, offers vast potential. Maryland was chosen based on data analytics, including retailer and license counts, and market share opportunities, solidifying Grön’s East Coast presence.
Grön’s commitment to organic, single-origin ingredients and fair-trade certified suppliers is a cornerstone of its brand appeal. However, navigating the fragmented regulatory landscape presents challenges in sourcing ingredients. In Ohio, for instance, regulations prohibit purchasing oil on the open market, requiring companies to process it within licensed facilities. To overcome these hurdles, Grön has diversified its sourcing strategy to ensure a steady supply of biomass, crucial for scalable operations as it enters new markets.
Grön has adopted a unique manufacturing model to comply with varied state laws. “We set up our kitchens in all of our facilities. We operate under a reverse licensing model,” explained Smith. In this model, Grön establishes production spaces under someone else’s license, approved by the state. This approach enables the company to use its equipment, minimizing the reliance on traditional kitchens and transforming them into efficient manufacturing facilities. The need to tailor production processes to each state’s regulations prevents the streamlining of operations across the board.
Leveraging technology and innovative manufacturing processes is crucial for Grön to optimize production costs and ensure consistent product quality across markets. Smith highlighted the reliance on both manual labor and automated systems, tailored to each location’s requirements. Grön’s operations necessitate the use of smaller, more versatile equipment that can be adjusted to meet local regulations, maintaining compliance while striving for efficiency.
Grön’s approach to technology extends beyond physical machinery to flexible software systems that handle diverse regulatory demands, from tracking and reporting to quality control.
Product development at Grön is heavily influenced by consumer trends, requiring a strategic balance between innovation and economic viability. With over 250 SKUs tailored to diverse regulatory and consumer landscapes, Grön’s approach to product creation and marketing is meticulously localized. Smith emphasized the complexities involved in adapting product formulations to suit different markets, particularly in the use of cannabis extracts like rosin and distillate.
The variability in ingredient availability not only affects product offerings but also impacts Grön’s pricing strategy. “In Oregon, we can get oil for $1.50 a gram. On the East Coast, we’re looking at oil for $15 a gram, sometimes $20 a gram,” noted Smith. Despite these challenges, Grön maintains a consistent quality and price point for consumers, sometimes absorbing higher costs to establish market presence and consumer trust.
Grön is optimistic about the future, focusing on minor cannabinoids and new product developments like low-dose sleep aids, reflecting the company’s commitment to innovation aligned with consumer needs.
