Ryan Crane and the Big Marijuana Makeover

Marijuana is about to get a big makeover. One Chicago man is at the forefront of this new revolution to get cannabis into the hands of millions more people. Ryan Crane graduated from Princeton University magna cum laude with a degree in psychology/neuroscience. Then he came to the University of Chicago for a MBA to graduate with honors from the Booth School of Business, ranked by the Economist magazine as the world’s best. 

“When I was in my early 20s,” Crane confided to a south Loop audience at a May 2019 TED talk,  “I had a moment of what you could call youthful indiscretion that set my life down a very challenging path. I applied for a job on Wall Street. It was fast paced and high stress. In certain situations, that stress could be pretty overwhelming.” 

Without knowing it, Crane became one of the Excellent Sheep described by author William Deresiewicz in his book of the same title. Deresiewicz, who taught English at Yale, describes the lives of the highly talented overachievers.

“We all know about the stressed-out, over-pressured high school student; why do we assume that things get better once she gets to college.” from Excellent Sheep by William Deresiewicz | Squarespace Image

”Look beneath the façade of affable confidence and seamless well-adjustment that today’s elite students have learned to project, and what you often find are toxic levels of fear, anxiety, and depression, of emptiness and aimlessness and isolation. We all know about the stressed-out, over-pressured high school student; why do we assume that things get better once she gets to college,” Deresiewicz writes in the first few pages.

Later he says “Nor does graduation make these issues go away. While some kids make a choice and don’t look back—for good or ill, whether they have chosen from conviction or desperation—many continue to struggle with all the same feelings and pressures. I have seen students stumble for years, as many bright young people do today, unwilling to submit to doing something that they can’t feel passionate about but still not knowing where their passion really lies. One spoke of continuing to struggle not only with anxiety and fear, but also with ambition: not, that is, with a genuine desire for excellence, but with the feeling of being a failure if you don’t continue to amass the blue-chip names, the need to keep on doing the most prestigious possible thing—and the constant awareness, over your shoulder, of all the prestigious things that your former classmates are doing.”

Crane was in this predicament. “I tried everything I could to manage my anxiety, including prescription medications, but those came with their own side effects on my mood and energy levels. I searched for a different solution and it took years before I finally found one. I stumbled upon a little-known cannabis extract called CBD. It toned down my stress levels but still allowed me to feel clearheaded and focused. Suddenly, I was back in control of my daily routine. I felt confident, composed, and relaxed. I just sort of felt like myself,” he said. Crane had found his life purpose: to bring the incredible benefits of the cannabis plant to the masses, particularly CBD (Cannabidiol). “This little-known cannabis chemical is about to change the way we think about our daily health.  It has made such a big impact on my daily routine that I now dedicate myself professionally to creating healthy CBD options for people that want to give it a shot. It is not just for people with extreme anxiety or panic attacks either. CBD has this gentle calming effect on stress levels, similar to a meditation. Think of it like the volume knob on a stereo. CBD does not shut the noise off entirely. It just turns that dial down a little bit.

Because of that, it is being used to help people perform better in a wide range of daily stressful scenarios from interviews to networking. People that used to have a drink to calm the nerves are now trying CBD instead. The implications for CBD are pretty fascinating, particularly when you consider that we may have stumbled upon a natural remedy to common ailments for millions of people every single day. You don’t have to ingest a handful of pills or supplements to get those results. CBD is commonly infused into foods and beverages in a way that is healthy and convenient. You can get everything from CBD waters and juices to CBD olive oil and humus,” he said. 

An energized Crane returned to Chicago and has applied his big brain to creating a CBD-based beverage brand called Tempo. He also opened a consulting firm called Bloom Advisors that aids cannabis companies in all stages of development to take advantage of emerging opportunities.  At the TED talk, he offered a vision for the next wave of cannabis innovation. “Nowadays when we talk about cannabis, we’re no longer just talking about a plant. We’ve broken that plant down into extracts, compounds and building blocks with tremendous therapeutic potential. That’s actually great news for all of us because the new version of cannabis is a lot more exciting than the old one. In fact, cannabis has emerged as a modern-day superfood. If we can reset our image of this plant, cannabis might actually be more important to our daily routine than coffee.” 

Photo by Tree of Life Seeds from Pexels

These days, Crane’s thinking and analysis now includes THC, or tetrahydrocannabinol, the psychoactive compound found in some cannabis strains. In a series of community presentations during October and November, 2020 co-developed with Illinois Women in Cannabis and Gromentum Lab, Crane shared his expert insights and predictions for the future. “When you look across the country, there’s a huge gap between what we’ve seen in terms of infused products in Illinois versus what has emerged in some of the more mature markets out west, and bridging that gap is going to be a huge opportunity in the years ahead for all of us here. We have hit the peak of this once in a generation wave where there is tons and tons and tons of opportunity, but unfortunately, there is probably an equal number of trip wires.” Many well-known beverage companies are partnering with cannabis companies. Constellation Brands, who makes the bestselling Corona and Modelo beers, owns 38 percent of Canopy Growth, which announced that it will sell THC infused beverages in Illinois and California by the summer of 2021. Even non-alcoholic brands are getting into the action with Arizona Iced Tea partnering with Dixie Brands. “This market is poised to explode, as regulations get clarified and also as infusion technology gets a little bit better,” Crane explained. 

So why are investors pouring so much money and resources into drinkable weed? Crane says that “These products are very discrete. They are very easy to use. Dosing can be precise. You’ve got familiar formats. They’re smoke free and you can get all sorts of flavors and varieties. For the canna-curious consumers or people maybe new to the space or uncomfortable with the historical stigmas of cannabis, infused products offer this great, reliable, familiar and smoke free and discreet way to consume cannabis. They look like something you are used to buying at Whole Foods.” For the crowd that’s willing to hand over a whole paycheck to a grocery visit, Crane describes the attractiveness of cannabis beverages. "They can taste great and there’s none of that extra work of grinding, or rolling or measuring, or whatever that might be off putting to a new cannabis user.” 

“For the experienced cannabis users,” Crane says “these products also offer a very different experience from smoking or vaping. An experience that translates to a broader array of social events than might be suitable for smoking.” In other words, stoners no longer just need to hang out with other stoners or at least those accepting of the lifestyle. Marijuana infused brownies, cookies or another kind of homemade baked good is quickly becoming an outdated image of cannabis infused products. Today’s infused products have packaging that looks like other premium products at the grocery store. Gone are images of the iconic fan shaped serrated marijuana leaf, hazy smoke, or psychedelic lettering. Infused cannabis products will be available in lower doses in brands that connect with consumers.

Crane cites data that enables him to project cannabis infused products will grow from a two-billion-dollar industry that constitutes 14 percent of the cannabis market in 2019 to something dramatically higher in just five years by appealing to a broader consumer base. New products will be introduced to those who do not want to vape, smoke, dab, roll joints or pack bowls. “It is critical to stay ahead of the curve and that means developing products with an eye not towards where the market was but where it is going,” Crane cautioned, “Four big megatrends will drive the drinkable marijuana revolution: niche customer segments, beverages, microdosing, and quality.  The recurring theme of all of these trends Crane explains is customer segmentation. It is very typical “for any market evolving from nascent to mainstream. As a market matures, manufacturers start to develop more premium, specialized, or niche products that start to target certain customer demographic or psychographic segments. Cannabis is no different but we’re really at the early stages of that evolution in cannabis.” 

Trend No. 1: Niche Customer Segments

Photo by RR Medicinals from Pexels

“The typical cannabis consumer today is young and male. It is what most manufacturers expect [and] is what most brands market towards,” says Crane. Purchasing data at weed shops in California shows that 69 percent of cannabis consumers were male, and 64 percent were under 38. This is quite different from the consumer profile in the mainstream marketplace with trends Crane says “just can’t be ignored.” He adds, “Women for example make up 85 percent of the $4.2 trillion global wellness market. Women are also more likely to buy infused products than men. They are also more likely to buy CBD products than men. Women are also trendsetters in this space, leading the trends for low-dose and wellness-oriented cannabis products. Baby boomers still represent 16 percent of the cannabis market. They spend 20 percent more on each store visit than millennials and are more likely to purchase edible products than any younger generation.”

Trend No. 2: Beverages 

Photo by Elsa Olofsson from Pexels

“Infused beverages is another trend that just can’t be ignored because this segment is poised for massive expansion for the years ahead,” an excited Crane told his viewers.  Recently, Canopy and Acreage announced plans to launch their own THC infused beverages in Illinois and California next summer, with the CEO of Acreage calling infused beverages a “game changer.” Crane explains that all this corporate activity is happening because “innovation is really emerging across all types of beverages, including more complex formats.” These include “sparkling waters, sodas, wines, [and] coffees. All of those are a little more challenging to make than your typical beverages.”

Data shows that 45 percent of cannabis beverages sold in Colorado, Oregon and Washington state were of carbonated beverages. “Many of those advanced beverage formats are just not yet available outside of those more mature west coast markets,” Crane laments “so the opportunity for gap filling in Illinois is a big one. Beverages just make sense for cannabis. Throughout history, beverages have always played a central role in social events and social rituals—the exact type we think cannabis will probably fit into. Oftentimes, people even look to the alcohol market as a proxy for where cannabis is headed or even how it should be regulated.” 

While “this trend has been brewing for a while… it really hasn’t taken hold until now,” Crane said. “That’s not only due to the regulatory restrictions as everyone expects, but also due to the limitations in infusion technology. Because as it turns out, it is really very challenging to take a hydrophobic ingredient like THC and create a stable, reliable, and precise water soluble emulsion that can stand up to both regulatory scrutiny in cannabis as well as food grade testing. The good news for any of us is that a few companies have emerged to do just that: they’ve cracked the code on the technology and they’ve developed a process to do this in a way that’s safe, reliable, effective and also scalable. An unexpected consumer benefit to all of this… is that many of these new water-soluble emulsions actually deliver quicker onset time than traditional edibles.” A giddy Crane offered the bottom line: “What that means is you may drink a beverage, a THC-infused beverage, and you could feel it in 15 to 20 minutes versus what we are all probably used to having a gummy waiting around for an hour wondering if it is going to kick in.” 

Trend No. 3: Microdosing 

Photo by Elsa Olofsson from Pexels

“There’s just this growing trend towards lower THC items for edibles as well as beverages,” Crane says. “For example, instead of having 10 or 20 milligrams of in a single serving you might want a beverage that is more sessionable. You might want something that you can enjoy at your own pace. Realistically, despite all of these hundred milligram products on the market, the average consumer just doesn’t have the tolerance to drink a hundred milligrams of THC in one setting.”

Crane’s analysis parallels the experience of influential New York Times columnist Maureen Dowd who wrote about her “scary” experience eating a caramel covered chocolate bar in January 2014 during a Denver visit, a few weeks after Colorado lifted the decades long prohibition of legal marijuana possession and sales for adult use. After nibbling at the end of the bar and feeling nothing after an hour, Dowd took a few bites where she then “barely made it from the desk to the bed, where I lay curled up in a hallucinatory state for the next eight hours.” She described feeling deeply “paranoid” during the experience. Dowd quotes Andrew Freedman, Colorado’s director of marijuana coordination at the time, “The whole industry was set up for people who smoked frequently. It needs to learn how to educate new users in the market. We have to create a culture of responsibility around edibles, so people know what to expect to feel.” Industry and regulators responded with limits on edibles and infused products along with better product labeling. The big cannabis companies want repeat business and bad trips mean a customer will not return to the product or worse cannabis again. Regulators want to prevent reports from angry citizens complaining about unwanted hallucinations and feelings of paranoia. Together, they have embraced microdosing to create a smoother high that delivers no surprises and continuously rakes in the profits and taxes. 

Crane offers a different perspective on the motivations for microdosing. “Another way to classify this microdosing trend is probably you could call it a shift toward single serve products as well.  This isn’t just a trend that caters toward social sessions or new or less frequent cannabis consumers, this is also being bolstered by this general wellness trend that we are seeing in cannabis. Remember, cannabis is a biphasic substance. That means it can feel very different at low doses versus high doses. An obvious example of that might be anxiety. At low doses, cannabis can sometimes relieve anxiety, but at high doses, I am sure everyone here has a story, it can potentially amplify anxiety. Energy is another example of just that effect too. For those looking for cannabis for what I call ‘functional wellness,’ and you are looking to get that without the slow down or the sleepiness, small doses can actually help, can boost your creativity, or boost a workout session or help get you through another activity where cannabis might fit.” 

Trend No. 4: Premium Products 

Photo by Binoid CBD from Pexels

The megatrend of premium products “corresponds with that broader theme of market segmentation and niche customer targeting,” Crane says. “As consumer markets like this mature, you always tend to have some form of premiumization trend emerge. Despite the cheap stoner stereotype, most cannabis consumers are actually willing to pay more for higher quality products. This is right in line with broader, mainstream food trends. Right now, more than three-quarters of US consumers are actually seeking healthier versions of the food they purchase and also avoiding preservatives and chemicals. What that all means is that they are paying for more expensive products. A lot of this search for a healthier high unsurprisingly plays out in infused products. Types of things you do not have to smoke or you do not have to inhale. Accordingly, …consumers with more discretionary income do tend to gravitate toward infused food and beverages more so than your other consumers.” 

Of course, none of these are new or unique. Crane says, “Each of these trends have crept into the Illinois market to some extent, but we are still at the very early stages when you compare it to markets like California or Colorado for example. Overall, we see each of these as huge opportunities for new manufacturers and brands in Illinois who are willing to invest the time to get it right. Over the next year, we expect to see a mix of west coast brands penetrating the Illinois market as well as local brands that spring up to provide a home-grown solution to these same emerging customer demands.” 

In a later online discussion, Budding Businesses, episode MIPs: Marijuana Infused Products, free to Chicago NORML members and $10 for non-members, Crane spoke in specific terms about taking advantage of these trends.  He emphasized that Illinois is a limited license state, and the license holders have the “keys to the kingdom.” For the foreseeable future, partnerships with license holders will be very important. “If you are an unlicensed group or an unlicensed company that wants to get involved, you need to bring some really serious value to the table or there is really no reason for them to share their facility, share their margin or profitability with you,” Crane stated. The kinds of things people bring to the table are an established brand, such as Arizona Iced Tea. Another example is someone with a successful product, like companies who have popular products out west but not in the Midwest or east coast.  Something else that could be brought to the table is customer access, such as sports figures like Mike Tyson, the boxing champion, who grows a variety of cannabis strains on his California ranch and grosses half a million dollars each month. Musicians also develop products, like Willie Nelson and his cannabis brand Willie’s Reserve. 

Crane was asked about people selling edibles in the unregulated cannabis market and their likelihood of transitioning to the emerging legal market. “It comes down to economics and trust,” said the business wiz. “I have these conversations all the time because I talk to people on both ends of it. Economics is pretty straightforward. It needs to be more valuable for a licensee to work with you than to do that thing themselves and they need to have the capabilities and capacities to do it.” On trust, “do they trust that you are going to pull in the customers that you have. If you are working on a kind of the fringe market, are those same people going to go into the dispensary and buy it or…is it going to be applicable to the type of customers that would walk into a dispensary.” 

Are CBD shops and the highly regulated marijuana dispensaries offering THC-based products significantly different?

Crane had an opinion on that too. “I think it is kind of regulatory fiction that the hemp plant and the cannabis or marijuana plant, if you want to call it that, are different things. It is all the same thing. The concern I have when we segment them so discreetly that we kind of build this perception that this one is kind of good and okay and this one is something to worry about. I don’t like that perception. It’s one plant. We’re all kind of talking about the same thing. It’s regulated differently, but I think the conversations go hand in hand. The more regulated version, especially when you get to pharmaceuticals, you are working with isolates and extractions. Depending on how this is regulated, if it is regulated more strictly, this is what you might see a lot more of because that can be controlled. The amount of it can be controlled very directly. My personal preference is to look at the whole plant because I think there are benefits of consuming cannabinoids together. I think when we look at the interplay of those cannabinoids, that’s when we can start to think more directly about the functional effect of this one versus the functional effect of that one. That’s the trend I like. That’s where I see this is all headed. We do not need to dissect this plant into some sort of clinical experiment. I think there is value in not over processing these things,” he said. One example of this is the root of the cannabis plant. Whether it comes from a plant rich in THC or one with only trace amounts, the roots have less than the .03% THC threshold that separates the highly regulated cannabis from hemp used for products like cloth, rope, and building materials. Cannabis root is used for pain, inflammation, and to regenerate body tissues.   

Photo by Karolina Grabowska from Pexels

Back at his 2019 TED talk, Crane offered a vision for the future and an imperative for the present time. “We currently sit at a pivotal moment in the history of cannabis regulation, one that will determine if, when and how we are even allowed to purchase cannabinoids like CBD. Weed was made illegal in 1937. Now, after an 80-year failed experiment, we are finally about to revisit the cannabis question, and the decisions we make today will set the course of this industry for generations to come. It is very important we get it right this time. A lot of products on the shelf today don’t hold up to the right quality standards.

We can’t continue to put it off because the longer we delay our regulatory decisions the longer we deny access to a common solution to common ailments that should be very treatable. We need to move forward, based on real science one step at a time. If we remove the veil of cannabis stigma, CBD is nothing more than a natural plant ingredient with therapeutic potential. If we do it the right way this time, we have an opportunity now to give millions of people access to something that could improve their work lives, their social lives and their overall happiness. But we need to take a step back first and toss aside those outdated stigmas because this plant is a lot more than just weed. Cannabis should be viewed as therapeutic!”