The United States’ legal emerging cannabinoid market is growing exponentially and expected to reach over $3.19 billion in sales by the end of the year, according to Chicago-based cannabis researcher Brightfield Group.
Waukesha-based manufacturer The tabEASE Company
has found its own niche within this massive industry with its pharmaceutical-grade, flavored pressed pills, which contain Delta 8 THC. Last year, The tabEASE Company completed $1.6 million in sales.
president of The tabEASE Company, has a background in chemistry, receiving his degree in biochemistry from Wisconsin Lutheran College. Despite his scientific knowledge, starting a business in this industry wasn’t his first venture.
Smith’s first run at trying to start a business was back in 2014, which was the first year The Commons,
an entrepreneurial skills accelerator in Milwaukee, was in operation. At the time, he was working on starting an online fundraising company geared toward schools.
“It was just a tough business and what I realized was if I was going to invest time into starting a business, it needs to be in an up-and-coming industry,” said Smith.
His first exposure to the cannabis industry was in Oregon in 2020, when he visited a dispensary with his fiancé. He began working on extraction methods and concentrating the oil that comes from cannabis plants.
In researching the cannabis industry, Smith landed upon the 2018 federal Farm Bill, which legalized both CBD and hemp products. The bill says products that contain Delta 9 THC must have below a 0.3% concentration. This meant that Delta 8 THC, which is below that specified threshold, would also be legal. The Farm Bill actually considers cannabis plants with less than 0.3% THC to be hemp. Delta-8 THC is typically sourced from hemp.
“Having some chemistry background, I looked at what I could do because CBD and THC are very similar,” said Smith. “I said a simple acid reaction should transform this into Delta 9 and then into Delta 8 THC, and it should be legal.”
THC, which stands for tetrahydrocannabinol, is the primary psychoactive component derived from cannabis plants. Delta 8 THC is among the most famous cannabis compounds. Delta 8 THC can cause effects similar to Delta 9 THC but is less potent.
Delta 8 THC can lead to feelings of “euphoria, happiness, sedation, pain relief, and a whole lot more," according to the tabEASE website.
“I was the first person to make Delta 8 THC in the Midwest, which is pretty cool because it’s so big now,” said Smith.
He began legally selling hundreds of kilograms of Delta 8 THC in Wisconsin but found that other companies were starting to imitate his product. That’s when he started manufacturing THC vapes and gummies, as well as the company’s flagship product: pressed pills in flavors like sour green apple and rainbow sherbet. The company can manufacture about 30,000 tablets an hour.
“I made a quarter-million gummies. Manufacturing them is kind of a pain in the butt, so I stopped to think what the cheapest and most convenient edible product could be,” said Smith.
The tabEASE Company is headquartered in a 20,000-square-foot facility. About 5,000 square feet is dedicated lab space. There is no physical storefront as this time. The company only sells through its website. Its products can be found at 200 retailers throughout Wisconsin and Illinois.
Smith said all of the money made in 2022 was re-invested into the company to support its growth. The endeavor has been completely bootstrapped thus far, including $100,000 of Smith’s own money.
His immediate goals include finding national retailers to sell his products to and creating a wholesale website.
“If Wisconsin turns on the light switch for medical use of recreational marijuana, we are going to be a major player in that,” said Smith.