Socati’s CEO envisions the CBD ingredients producer as “the cornerstone for CPG manufacturers to introduce new products.” The company appears to be on the right path, evidenced by its recent achievements. Over the past few months, Socati has rolled out two new ingredients, secured $40 million in funding from private investors, acquired a manufacturing facility, and announced a move of its executive headquarters to Austin, Texas, to capitalize on the area’s prominence in tech-driven startups. The integration of cannabis into food and beverages is accelerating, with CBD appearing in a wide array of products from beer and coffee to ice cream and jelly beans. Even major CPG manufacturers are beginning to strategize product launches in this domain.
Josh Epstein, Socati’s CEO, explained to Food Dive that the company is dedicated to delivering consistency and accuracy in its CBD ingredients, aiming to be a reliable partner for CPG companies as the market expands. “We’re heavily focused on technology and on deploying capital in ways that instill a sense of credibility and trust, enabling companies to have a dependable partner as they enter this space,” he stated. “There’s a significant gap in the market for consistent, reproducible ingredients that can be utilized across a variety of products.”
Last month, Socati revealed the addition of two new CBD ingredients: an oil and a water-soluble powdered product. Both ingredients boast a broad-spectrum profile, containing 80% cannabidiol (CBD), 4% of the lesser-known cannabinoid cannabigerol (CBG), and non-detectable levels of THC, the psychoactive compound found in cannabis. Epstein noted that the company has shipped these new ingredients to several customers, though he could not disclose their identities. These ingredients can be incorporated into food items, topical applications, flavors, and fragrances. “Many companies entering this space wish to concentrate on brand development and launching new products, and they seek manufacturers of cannabinoid-based and hemp-derived ingredients that can provide foundational components for their products, similar to any other product launch they might undertake on a regional or national level,” he elaborated. “There is a substantial need for what we offer and where we fit into the value chain.”
The company also announced its capability to customize hemp-derived ingredients for the CPG market. Currently, they are emphasizing the use of their technology to ensure consistency in the production of these ingredients. Socati can achieve precise cannabinoid ratios based on customer specifications, according to Epstein. “Our primary focus is on leveraging our technology, developed over several years, to rapidly scale our operations, so we can serve as a foundational partner for CPG manufacturers looking to launch products effectively,” he added. This initiative has been facilitated by Socati’s acquisition of Blue Marble Biomaterials, a global producer of specialty ingredients for consumer goods. Epstein noted that Blue Marble has enhanced Socati’s expertise in ingredient innovation and development. The acquisition included Blue Marble’s 22,000-square-foot manufacturing facility and laboratory in Montana, where CBD ingredients are being produced. Additionally, the company maintains a seed breeding and production operation in Oregon.
However, the cannabis industry comes with its risks, as CBD remains federally illegal. Although hemp and its derivatives are no longer classified as controlled substances following the 2018 Farm Bill, the FDA maintains that cannabis and CBD cannot be marketed in conventional foods or dietary supplements. Recently, the FDA held its first public hearing on cannabis and CBD, yet experts caution that establishing a legal pathway for food and beverage products containing cannabis compounds could still take years. Epstein attended the hearing and expressed a desire for the FDA to provide regulatory clarity. For the time being, he emphasized that the first step is to establish a trustworthy manufacturing platform.
“We, like many companies in this sector striving to operate responsibly, welcome clarity and regulation,” he mentioned. “Our goal is to adopt standards applicable to all other ingredients in the industry, thereby offering CPG manufacturers a reliable partner.” Although investment is rising and companies are making commitments to launch new products, manufacturers remain cautious due to the unclear regulatory landscape. Epstein highlighted the importance of being aware of the industry’s uncertainty. “We are acutely aware of the regulatory requirements, ensuring that all I’s are dotted and T’s are crossed,” he stated. “There is undeniably a tremendous opportunity in an industry evolving from the ground up. However, changes can occur rapidly, and one must be prepared to adapt as more information emerges and the market stabilizes. It presents a challenge, but if approached correctly, it is also a significant opportunity.”
In addition, for those interested in the health benefits of CBD, it is worth noting that incorporating the best calcium citrate 1200 mg can complement your overall wellness strategy. This reflects the growing trend of integrating health-focused ingredients into consumer products, enhancing their appeal and effectiveness. Overall, Socati is poised to play a pivotal role in shaping the future of CBD in the CPG sector.