This story originally appeared on Marijuana Business Daily
The complexity and cost of obtaining cannabis licenses has many brands turning to white-label branding.
White labeling, a practice common among mainstream businesses, is when a product is produced by one company but packaged and branded to make it appear as if another company made it.
For example, many products sold at Whole Foods Market under the 365 brand were not made by Whole Foods at all. Instead, the national grocery chain has various companies that produce the items for Whole Foods to sell under its 365 label.
The same is true for Costco’s Kirkland brand and Walmart’s Great Value brand.
‘Areas of expertise’
Daniel Yi, managing partner and chief strategy officer of Bellflower, California-based product maker Inanna Manufacturing, said opportunities for white-labeling in the cannabis space are great because few companies are doing it.
Many entrepreneurs have ideas for brands and would like to get into the cannabis industry, but they are unable to do so because they can’t get a license, according to Yi, who got his start in the cannabis industry four years ago with Los Angeles-based multistate operator MedMen Enterprises.
“There are a lot of product ideas,” he told Marijuana Business Magazine.
Inanna holds one of California’s Type 6 cannabis-manufacturing licenses, which allows the company to make everything from gummies and topicals to baked goods. The company does not provide extraction services, nor does it grow cannabis.
“There are a ton of people who are super good at cultivating cannabis efficiently,” Yi said. “Why spend a lot on that if you have a great retail concept? It’s more about segmenting into areas of expertise. Coca-Cola doesn’t bottle its own soda. The same thing will happen with cannabis.”
Uptick in demand
Boulder, Colorado-based WHT LBL takes a different approach. The company handles everything from making distillate for edibles products to brand management and manufacturing at its 15,000-square-foot facility, said Jill Lamoureux, WHT LBL’s co-founder and chief creative officer.
Published: November 24, 2020