With its recent acquisition of groundbreaking cannabinoid extraction tech, Sproutly is ready to lead the pack as cannabis beverages and edibles come to market.

Cannabis legalisation continues to build momentum across the globe, and major players are already looking towards the future of the industry with the development of technologies that will allow them to infuse cannabinoids into a vast array of mainstream consumable products. Following announcements from Constellation Brands, Molson Coors and Anheuser-Busch InBev about their entry into the cannabis space, many other players are looking to develop cannabis beverages in particular. While these other players in the industry scramble to develop their own technologies or utilise old methods of formulating isolated cannabinoid oils into beverages and edibles, Sproutly is comfortably positioned to lead the cannabis beverages and edibles industry with natural water-soluble cannabinoids recovered directly from plants using a novel technology.

An introduction to Sproutly

Sproutly, a Canadian-licensed producer of cannabis, began publicly trading on the Canadian Securities Exchange in July of 2018. Through their wholly owned subsidiary, Toronto Herbal Remedies, they have a state-of-the-art 16,600-square-foot/1,540-square-metre indoor grow facility located 15 minutes outside the downtown core of Toronto. Sproutly’s current capacity can produce 1,400kg of high-quality cannabis annually.

The strategy differs from other licensed producers in that Sproutly is not looking to accumulate large amounts of space for cultivation but is instead engaged in the development and bringing to market cutting-edge cannabis consumer products, with a focus on beverages and edibles.

Other licensed producers in the industry had already secured large cultivation footholds with 1-5 million-square-foot/92,900-464,500-square-metre grow capacities. Sproutly consciously chose not to go that route and instead has focused on the second wave or next evolution in the cannabis market once biomass supply is no longer a problem to solve.

“We saw the development of superior consumption methods and mainstream consumer brands as a way for Sproutly to stay ahead of the curve,” said Keith Dolo, the chief executive officer for Sproutly.

With that focused strategy in mind, Sproutly acquired Infusion Biosciences Canada in August of 2018, which gave them the exclusive rights to a revolutionary extraction technology in multiple territories in the world. Infusion Bioscience’s patent-pending Aqueous Phytorecovery Process (APP) produces two key ingredients in their natural forms: a truly water-soluble cannabis solution called Infuz2O and Bio-Natural Oil (BNO), which contains the traditional oil-based cannabinoids of the plant. Infuz2O is especially unique since it is truly water-soluble, allowing users to feel the effects of a particular strain within five minutes of consumption, and the effects dissipate within 90 minutes, mimicking the quick onset and offset timings that are now achieved by smoking and vaporising. The APP process recovers all water-soluble compounds, including the cannabinoids in their native state, and thereby delivers the full strain profile of the plant. Both ingredients can be used to formulate beverages, edibles, topicals and a host of other mainstream consumable products.

A brief primer on traditional cannabis beverage formulation techniques

To really understand how groundbreaking Infuz2O is, it is necessary to gain some insight into the other methods currently being used to create cannabis beverages that are on the market today and the limitations and downsides of these traditional methods developed during the 1960s and 1970s to formulate oils in water.

There are three main issues with cannabis beverages that you see available on the

market today:

They aren’t very appealing from a look and taste perspective – this is due to the fact that oil-based cannabinoids are being formulated into the beverages utilising artificial chemicals They may potentially bring some significant long-term side effects to consumers – this will be discussed in more detail soon There is a lack of predictability around the effects that these drinks or edibles produce. This means it is very difficult for consumers to accurately gauge their tolerance and reaction to a particular beverage or edible and leads to potential situations of overconsumption. There are plenty of horror stories about consumers eating an edible shortly after consuming the first one because they didn’t feel the desired effects right away, only to find a couple hours later that they had too much.

These issues are a direct result of the current methods being used to formulate cannabis beverages and edibles.

Cannabinoids such as THC and CBD that are extracted from cannabis or hemp using traditional methods are fat soluble oils, meaning that they don’t dissolve in water. This creates major problems when trying to mix cannabinoids into a beverage like water or juice since it causes both substances to naturally separate. This is what people refer to as the ‘salad dressing effect’, which is what you get when you pick up a bottle of salad dressing that contains oil and vinegar.

The consumer has to shake the bottle to mix the separated oil and water. The least sophisticated method of creating a cannabis beverage is no different than creating a bottle of salad dressing. Some cannabis beverage manufacturers mix the oil directly into the liquid and direct their consumer to ‘shake well’ before consuming. They even package the beverage in a fully wrapped container, so the consumer doesn’t have to see the separation of the oil from the liquid. It is not hard to understand how unappealing this formulation method is from a look and taste perspective.

A more sophisticated method of cannabis beverage formulation is through the use of emulsifiers. They have been around for a while and are actually quite common in other foods that we consume such as ice cream, breads and sauces, which makes them an ideal method to formulate cannabinoid oils into a beverage or edible. Emulsifiers contain one water-compatible (hydrophilic) and one oil-compatible (hydrophobic) end, which makes it possible for oil and water to become finely dispersed in each other.

The use of emulsifiers is better than the previous method discussed since they allow for the cannabinoids to appear evenly distributed throughout the beverage, but they are not entirely shelf stable over long periods of time at different temperatures and in the presence of other ingredients in beverages. After sitting for a while, the liquid will start to appear cloudy, which means manufacturers still have to store beverages in fully wrapped containers so consumers can’t view the inconsistency of the liquid.

The emulsifiers used to formulate beverages usually have a bitter chemical taste that requires large amounts of sugar, additives or flavourings to hide. Finally, emulsifiers have been unable to solve the most important problem around the predictability of effects after consuming. Consumers can wait up to an hour or more to start feeling the effects and upwards of four to six hours for those effects to dissipate. This is because the body has to first process the oil-based cannabinoids, which delays the onset and offset of effects.

Anyone who has consumed a cannabis edible is well aware of the uncertainty around how an edible will affect you – even for experienced users. The onset/offset issue is the single most important factor preventing cannabis beverages and edibles from being adopted by consumers.

One last method currently being used to formulate cannabis beverages is the use of encapsulation technologies. These are far more effective at producing transparent beverages and shorter onset and offset times, but they bring significant worry about the possible long-term side effects from consuming these nanoparticles.

The EU’s Scientific Committee on Emerging and Newly Identified Health Risks has stated that there is worry around the unknown natural degradability of encapsulated molecules – meaning they may reside in the body for an undesirably extended time and undergo different metabolic processing. This poses significant risks to beverage and consumable manufacturers who are looking to formulate cannabis beverages and edibles but face increased exposure to product issues or recalls. This is the main reason you don’t see these formulation methods used in traditional food and beverage production.

All these formulation methods are what are referred to as ‘water-compatible, -miscible or -dispersible’ technologies and are not considered truly ‘water-soluble’ since they all involve taking an oil molecule and formulating it into a water medium.

Many cannabis beverage manufacturers have been touting ‘water-solubility’ for their beverage technologies, but a quick look at their technologies reveals that they are all starting with extracted oils and hence their formulations generally fall into these previously discussed categories. This brings us back to the groundbreaking innovation underlying the technology to recover naturally water-soluble cannabinoids and other bioactive molecules being used by Sproutly.

Discovery of water-soluble forms of cannabinoids and terpenes

The focus in the cannabis industry to date has been on producing cannabinoids only as isolated lipids (oils). A team led by Dr Arup Sen, founder of Infusion Biosciences and Sproutly’s chief science officer, spent over 12 years researching and developing a technology platform to produce water-soluble nutrient molecules.

Sen’s list of accomplishments and accolades before founding Infusion Biosciences includes a PhD in biochemistry from Princeton and 35+ years of experience in research, executive management and product development programmes at biotechnology and pharmaceutical companies including J & J, Biomet, Green Cross Corporation and Tokuyama Soda of Japan, and Sandoz/Novartis.

He was also a faculty member at the National Cancer Institute and at the Scripps Research Institute focused on cancer research. In early 2016, he and his team discovered water-soluble forms of lipids in the cannabis plant, including cannabinoids and terpenes. Using a patent-pending process and proprietary reagents made with natural ingredients, he was successful in extracting those water-soluble forms into water solutions now known as Infuz2O.

The discovery of water-soluble forms of cannabinoids and terpenes parallels the history of cholesterol in humans. Before the 1980s, cholesterol was only measured as an oil in our blood as a marker for heart health.

The Nobel Prize-winning discovery by Drs Michael Brown and Joseph Goldstein of the value of naturally water-soluble forms of cholesterol as low-density lipoproteins (LDL/bad cholesterol) and high-density lipoproteins (HDL/good cholesterol) in human blood transformed our understanding of how these oils travel through our body and affect cardiovascular health. Many other lipids are now known to exist in water soluble forms in plants and animals.

The aqueous phytorecovery process (APP)

Utilizing a ‘soak and strain’ method, the cannabis biomass is first soaked in proprietary water-based reagents followed by a process of straining and filtering to recover the water-soluble forms of cannabis compounds (producing Infuz2O).

All of the reagents used are not only classified as GRAS (generally regarded as safe) but are also common ingredients found in our diet. Further, no artificial chemicals (organic solvents, liquified gas) or harsh physical treatments (heat, sonic, microwave) are used during the process.

The strained plant material is then soaked in proprietary natural oils that are routinely used by us, and once again strained to recover the remaining oil-based forms of cannabis compounds (producing bio-natural oil (BNO)). Nothing in the plant is left to waste.

Infuz2O: the world’s first natural, truly water-soluble cannabis solution

Infuz2O is a natural water-soluble cannabis solution that can be stably formulated into traditional beverages or edibles without the use of artificial, chemical and/or physical means to keep the cannabinoids blended in the water base. The true water-soluble form of cannabinoids in Infuz2O results in a fast onset time of less than five minutes and clearing (offset) within 90 minutes.

This is substantially different from traditional cannabinoid oils which take 30-60 minutes to feel the effect (onset) and 3-6 hours to clear (offset). The gentle, water-based recovery process also ensures that Infuz2O delivers the ‘whole plant experience’ without the need to smoke.

When looking back at the three main issues with traditional cannabis beverage formulation methods, one can see that Infuz2O addresses all three issues. It solves the onset and offset issue that plagues oil-based cannabis beverages. It is shelf stable and translucent because of its water-solubility, addressing the appearance of the beverage, and because it retains the natural terpenes, natural flavour profiles of formulations can be customised for beverages. Most importantly, it utilises natural GRAS ingredients that are commonly found in our diet.

Sproutly has already completed the development of a portfolio of cannabis and hemp-infused functional beverages using Infuz2O combined with water-soluble minerals, vitamins and other natural plant ingredients. The initial portfolio consists of three separate cannabis and hemp-infused beverages that provide the following functions:

Focused energy

Stress relief and relaxation

Restful sleep support.

“The focus of the company has been to develop products that will distinguish our functional beverages and edibles from cannabis and hemp beverages and edibles developed by our competitors. Our competitive advantage is to leverage the suite of proprietary water-soluble technologies we have acquired and create a line of consumer products that taste great and have a functional purpose,” said Keith Dolo, chief executive officer.

“Our beverages and edibles will not only cater to the emerging cannabis market but also to the large, functional beverage and natural edibles markets that exist today,” he added.

Bio-natural oil

BNO is the oil-based cannabinoids directly infused into one of many natural carrier oils that are used in edible products or for skin application. Unlike cannabinoid oils that are used in the industry, BNO is produced by a natural and gentle recovery process. Thus, BNO retains and delivers the full entourage experience and benefits of the plant variety from which the oil is made. It is active without the need for further processing, such as high heat treatment used for decarboxylation, winterising/de-waxing to remove undesirable resins, and has effects that onset as early as 25 minutes.

Sproutly’s strategy moving forward

As the cannabis industry evolves over the next decade, Sproutly believes the cannabis companies of the future will look a lot more like current beverage and edible consumer packaged goods (CPG) companies. Keeping in line with its vision to stay ahead of the curve, Sproutly has already started building its team to look more like one you would see at a global CPG company.

The company added Michael Bellas, a seasoned beverage executive with over 45 years of experience working with leading multinational food and beverage companies, and CEO of Beverage Marketing Company, to its Board of Directors. It also brought on Constantine Constandis, a former executive of Pernod Ricard with over 34 years of experience in the global wine and spirits industry, as an advisory member.

In December, the company also added two additional experienced management hires. Bryan Semkuley joined Sproutly as its president; he is a seasoned executive with over 30 years of experience working for global companies such as Kimberly-Clark, Anheuser-Busch InBev and Labatt. Also, Melise Panetta joined the senior leadership team as vice-president of sales and marketing. A veteran of PEPSICO Inc. and SC Johnson, Panetta will be focusing on developing the company’s marketing, brand and sales strategies.

While Sproutly will be utilising its newly acquired, revolutionary technology to create its own portfolio of brands, it is also looking to tap into the marketing, distribution and loyal consumer bases of both local and internationally established companies by forming partnerships with them to develop cannabis product lines. With a multitude of companies looking to break into the cannabis industry in some way, Sproutly is focused on building strong partnerships with a few solid partners instead of setting up numerous supply agreements with small, regional companies.

“We really want to select true partners to launch the best products under the best marketing and distribution channels that are out there in the various market segments. We will take the time and analysis needed to pick those good, solid partners because we want them to be here for ten years, not the ones that are trying to figure out their own way into the industry,” said Dolo in a recent interview with PotNetwork.

In a move to take the first step forward on Sproutly’s international expansion plans, the company recently announced a letter of intent with Global Canna Labs Limited, the Caribbean’s largest medical cannabis producer, to develop Jamaican-branded beverages utilising Infuz2O.

The plan is to sell these products in Jamaica or export to Europe or any other country that Jamaica allows for export. Sproutly is having discussions with potential partners in Canada and is looking for partnerships in the EU to develop cannabis edibles and beverages product lines. They are also exploring options in Australia and Israel.

“European consumers can expect to see Sproutly’s truly water-soluble cannabis brands on shelves in their countries in the near future,” said Dolo.

Kevin Deol

Sproutly, Inc.

+1 77 8945 6868

kevin.deol@sproutly.ca

www.sproutly.ca

Please note, this article will appear in issue 9 of Health Europa Quarterly, which will be available to read in April 2019.