By: Jamie Schau
For those with a sweet tooth, edibles options abound; cannabis-infused chocolate, baked goods, and sugary gummies (to name a few) are available in dispensaries and rec shops all over the country. But when sisters Krystal and Chelsea Kitahara, and colleague Alysia Sofios, walked into local collectives looking for savory snacks back in 2014, options were limited – if any were available all. The edibles they found were also wrapped in cellophane or plastic bags with twist ties, and did not appeal to this female team – nor women in general. It was at this point that the potato chip fans embarked on their journey into creating savory, cannabis-infused edibles designed for and by women.
That team, today better known as the CEO (Krystal), COO (Chelsea) and Chief Communications Officer (Alysia) of successful California edibles and tinctures company Yummi Karma (YK), have seen great success among not only 30- to 40-year-old women – the company’s target market – but cannabis users in general. Yummi Karma is selling its products actively in 250 stores around the state, and its new beauty products line – High Gorgeous, launched in early 2017 – is already in 75 stores in California, having only recently launched in the northern part of the state.
Yummi Karma and its young, female team have been paving their own path since the beginning, working to normalize this industry in part by appealing and marketing to women. Though segmenting their market was generally unpopular among those advising them, YK’s founding members had both the business and marketing acumen to launch a successful enterprise doing just that.
All of YK’s products are micro-dosed and lifestyle-oriented for women who lead busy lives – especially those who aren’t interested in smoking or other traditional forms of cannabis consumption, but want an approachable, easy-to-dose product that they can use on-the-go. Beyond savory edibles, they have created a tincture line aimed at relieving the symptoms of various female-specific conditions, such as menstrual cramps and PMS symptoms, as well as ailments that afflict the general population (e.g. anxiety, PTSD, and insomnia) – infusing lavender, melatonin, hibiscus flower, and other such elements into their products to rid them of cannabis odors and appeal to the female audience. They have also recently developed the High Gorgeous (HG) beauty product line, which appeals to somewhat younger women.
YK edibles and tinctures, and HG beauty products, are designed to fit into an individual’s daily routine – the chip bags are created to fit discreetly and conveniently into a purse and eaten on a quick break or lunch hour; Another object easily stored away in a pocket or purse is their THC/THCa-infused lime lip balm. Drift Away tinctures come in bottles of 30 mL, which will last one month (one 1mL drop per day) and can easily be combined with a morning routine like tooth brushing.
And this business model has taken flight in California. Based on data collected by Brightfield Group, Yummi Karma is one of the state’s two brand leaders in the Savory Snacks subcategory, with a brand share of 18% and steadily growing sales. Yummi Karma is also among the top 10 for tinctures in the state, with 3.4% of brand share in this more fragmented subcategory. Though the High Gorgeous line of topicals haven’t yet cracked the top 10 in California, with the exponential growth they’ve seen thus far, this may soon be the case; YK is expecting another big surge in sales after recently being filmed by Pop Sugar a second time. The first time this took place, the site got over a million hits.
This brand’s strategy of segmenting their market by identifying and targeting an underserved group has allowed them to make great strides in their sales while facing limited competition – an exemplary model of the success that can be met by serving underserved niche markets, many of which can still be tapped in the legal cannabis realm. Besides this strategy, another piece of Yummi Karma’s continued success is attributable to their investment in consistently responsible practices. From the beginning, the YK team has taken care to behave as any professional business would, hiring lawyers and accountants, filing for trademarks, always meeting OSHA health and safety standards - even paying for individuals to do periodic testing/checks when city regulatory agencies would not provide them due to YK’s association with cannabis. Thus, when California’s rigorous new rec regulations came out in June 2017, the team was relieved to find out the standards they had already held themselves to meant that getting aligned with the new regulatory framework in the state would require few and minimal changes. For this reason, Yummi Karma is in an excellent position heading into next year, most likely in the minority of Edibles manufacturers who will remain afloat once the new regulations are in place and the market begins to consolidate.
Furthermore, Brightfield Group data projects cannabis sales to skyrocket in California once licenses allowing recreational cannabis sales are made available (beginning January 2018). The Edibles market is expected to nearly quadruple by 2019 and continue experiencing massive growth in the years to follow. The Tinctures market is projected to follow a similar pattern, likely quadrupling in size by the end of 2019. In our projection, YK will thrive in this new landscape, remaining a competitive player in the state’s Edibles, Tinctures and even Topicals markets, and riding the wave of California’s rapid growth.
Though Yummi Karma does not currently have plans to expand outside the state due to the great deal of business and growth they’ve experienced and expect to see at home in the coming months, we expect that the forethought, strategic marketing and consumer trust built within this company will bring it success well beyond California’s borders, should the team later decide to expand.