Altai Poised to Dominate the Legal California Edibles Industry

Two thousand and five hundred years ago, a young Pazyryk princess traveled to her winter camp on the Ukok Plateau. It would be the final journey for this woman, who was about 25 years old, frail, emaciated and ravaged by breast cancer. Following a fall from her horse, her people would carry her to a bed where she would lay for the rest of her life. This female shaman was buried in a royal fashion, along with three horses and a large container of cannabis flowers, which Siberian scientists believe was used to treat the pain caused by her disease. Discovered in 1993, the mummy of the princess was remarkably preserved by the permafrost in the Altai Mountains where she was found.       

Inspired by this timeless tale of the power of cannabis to relieve pain and ease suffering, California edibles makers Rob Weakley, a veteran of the Pebble Beach hospitality and restaurant world, along with Monterey lawyer Gavin Kogan and chef Mark Ainsworth, christened their new company Altai. Their logo, a circular design of an elk, is a replica of a tattoo discovered on the Ukok princess’ shoulder, a work of great skill and artistry for such an ancient people.

The group hopes to continue the grand tradition of using cannabis as a tool for healing and self-discovery by producing edibles fit for a princess.            

When I visited the Altai production facility last September, it was evident that the venture had been financed by considerable capital. Indus Holding Company, the parent of Altai brands, recently negotiated a lucrative deal to license the intellectual property of Colorado-based Dixie Elixirs and Edibles, bringing the popular brand to California. Along with this exciting venture, Altai launched their own line of gourmet, low-dose edibles, betting on the emergence of a moneyed demographic of graying Baby Boomers ready to re-enter the cannabis market.

With consistent dosing, high-end ingredients, polished packaging, delectable recipes and professional know-how, this dream team is preparing to conquer the California edibles industry, which will hopefully go fully legal in 2016.

Chocolates and candies are packaged in a cellophane wrapper pumped full of nitrogen gas to increase shelf life and preserve freshness.     

As cannabis transforms into a mainstream commodity, the days of bootstrapping a small edibles business run completely independently by an individual or family seem increasingly quaint.

Of the many challenges facing mom-and-pop edibles companies, the inability to get a bank loan to finance expansion is the most difficult to overcome. As a result, many established, small local or regional brands are unable to scale up to compete in a huge market like California. When Weakley and Ainsworth researched the marketplace and questioned dispensary operators, inability to adequately service customers was the number one complaint they heard about existing edibles companies.

“Products were running out and not being re-stocked,” Ainsworth said. “Patients find products they like and trust, and then get frustrated when they weren’t able to find it again.”

Scaling up to meet increasing demand became one of the foremost concerns in the fledgling company’s business plan, with Ainsworth relying on his experience as a pastry chef at the Ritz Carlton, where he learned how to produce volume. Timing is everything, since you don’t want products sitting on the shelf and getting stale, and so Altai made sure to purchase versatile food production equipment.

“We wanted to produce high quality chocolate that could be sold at the Ritz Carlton, but be able to produce 20,000 of them,” he Ainsworth.

Lemon Honey Soothers infuse cannabis into a lozenge for discreet relief.

Inside Altai, the sweet and spicy scents of various products wafted through the air as we made our way past the offices and conference room toward the nerve center of the facility. We donned white lab coats and hair nets, and Ainsworth used his badge to gain access. Security is paramount at the facility, and cameras are everywhere. In the production area, five or six employees were making soothers, cannabis-infused lozenges flavored with bergamot tea, eucalyptus and lavender—herbs that effectively mask the taste of cannabis.

We watched as a staff member worked 200ºF hot sugar, kneading it on a silpat, aerating it until it became more opaque. Ainsworth gave him some direction on how to keep the hot sugar at a consistent temperature before it was loaded into a machine that punches the sheet of candy into individual spheres. The rough lozenges are then tumbled and polished until smooth before being glazed and coated with sugar.

Inside the “Chocolate Room,” workers prepare cannabis-infused bon bons, coated almonds, single origin bars and much more.

Sophisticated systems calculate the dosage for each batch, and software tracks each ingredient by barcode. Chocolates and candies are packaged in a cellophane wrapper pumped full of nitrogen gas to increase shelf life and preserve freshness.

In the “Chocolate Room,” Ainsworth showed off the panner machine, which coats Altai’s malt balls, red hots, almonds and espresso beans in an even layer of chocolate, along with the tempering machines that homogenize the THC in a consistent solution of melted chocolate. A vacuum mixer is essential for keeping the caramel filling for truffles dense and rich, and teams of people hand paint every mold, decorating the truffles before a machine vibrates and flips them. Ainsworth described the facility as a place where “artisan meets automation.”

A neighboring room houses a bottling line intended for Dixie’s signature line of elixirs, and soon it will be spitting out 80 bottles per minute, complete with labels and caps.

Carbonated beverages are expected to go into production this Spring, while Dixie's Wild Berry Lemonade and the Peach Iced Tea are being distributed now. The company currently produces 47 SKUs (stock-keeping units), and 38 of them of designed and controlled by Altai.

“Mark comes from major food manufacturing, and considers the cannabis oil just an ingredient,” Weakly said. “When developing our brands, we focused on consistency, safety and transparency.”

Large-scale production capacity makes Altai a formidable competitor.

Bringing an understanding of food science, safety programs and preventative maintenance protocols from mainstream food production will enable Altai to leapfrog smaller mom-and-pop companies that evolved out of the underground cannabis economy. Preparing for a “big ramp up as California starts to head towards adult use,” Altai has focused on creating low-dose treats as a way to attract new users, as well as promote a responsible image for the edibles industry. 

“We know people in their 60s who are trying this for the first time, and we want them to have a positive experience so that you can change the paradigm,” Ainsworth explained. “We don’t want people to try it and get freaked out.”

With this in mind, products are designed to deliver a manageable dose in a satisfying portion size. The Bittersweet Single Origin Alt Bar is offered at two levels of THC potency, either 10 or 25 milligrams, enabling consumption of the entire bar at once. 

“I want the whole damn candy bar!” Weakley exclaimed, going on to opine that an edible containing “1000 milligrams doesn’t help the industry,” equating such a dosage level to “drinking Everclear.” 

This approach goes contrary to the current California medical marijuana market, where patients routinely seek out high doses in order to compensate for increased tolerance, to replace pharmaceutical painkillers or to cope with serious illness. While there's certainly enough space in the cannabis market to offer a variety of dosage options, choosing to offer exclusively low-dose products certainly limits your appeal to those who purchase the most edibles and use them frequently.

The Bittersweet Single Origin Alt Bar uses a “very special dark chocolate sourced from the sacred mountains of Peru, near Macchu Picchu.”

The team at Altai believes fervently in self-regulation and educating consumers on proper dosage levels, hoping to expand the acceptance of cannabis to new demographic groups accustomed to sipping fine wine and nibbling gourmet cuisine. Describing his personal use, Weakley shared how cannabis has helped him greatly reduce alcohol consumption.

“When you come home and have a vape pen or an edible, you’re relaxed and mellow," he said. "You feel recharged the next day, waking up refreshed with no hangover.” 

Already, the company is making waves, capturing a third place award in the Edibles category at the HIGH TIMES World Cannabis Cup for their Sea Salt Caramel Bon Bons and expanding their distribution to over 150 California dispensaries.

With the accumulated capital, expertise, and manpower behind Altai, it will obviously be difficult for smaller companies to compete as the cannabis industry goes mainstream. New regulations on the horizon will push many mom-and-pop businesses out of the marketplace, leading to consolidation and less diversity in product offerings, as we have seen happen in Colorado. For those who remain, increased focus on customer service, ability to secure loans, scaling up production capacity and adapting to changing regulations will be paramount to success. 

As the marijuana industry emerges from the shadows of prohibition, more professional businesspeople will inherit a proud tradition carried on for thousands of years by ancient shamans, nomadic tribes, Mexican farmhands, jazz musicians, bohemian artists, hippie activists and underground outlaws. As this evolution continues in our modern capitalist system, it’s important to remember to respect those who came before, whether an ancient Ukok princess or Humboldt family farmer, and honor their sacrifices as an activist movement morphs into an industry. 

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