Nicotine pouches have become a multibillion-dollar industry. Now Cannadips and other brands are putting their money where your mouth is.

_{By Will Yakowicz, Forbes Staff}

InOctober 2011, Cliff Sammet and his friends pulled a Ford Escape into the Stanford football stadium parking lot and sparked a joint while they looked for a spot. The guys were all up from Santa Cruz for a game against USC.

While hotboxing in the parking lot, they rolled down their windows and got dirty looks as they passed parents with their young children. Sammet, who was working at a hospital at the time and getting drug tested, couldn’t hit the joint that was being passed around. Instead, he packed a pinch of Copenhagen smokeless tobacco and tossed the tin on the dash. Then, in a nicotine-fueled buzz, he had an aha moment.

“I threw in a lipper and thought, Why not put the pot in the chew?” Sammet recalls. His friends, who were all glazed over at that point, naturally thought it was a brilliant idea.

It would be another four more years until Sammet ran into Case Mandel, an old high school buddy and cannabis entrepreneur who was running an illegal THC extraction lab in Humboldt County, California, at the time, and pitched him on his idea—create a lip pouch laced with cannabis, not nicotine. This was before Zyn, Philip Morris International’s pouches, became a cult obsession in the United States, but Sammet, a longtime dipper, had been introduced to snus pouches, which contain pasteurized tobacco, and pure nicotine products. His idea had coalesced over the years, and he realized pouches, not dip, would make for a better delivery system for THC.

“We raised some money from local Humboldt farmers and bought a snus machine from India, but we didn’t know what we were going to put in the pouches or how we were going to make it work,” says the 40-year-old Mandel.

Mandel and Sammet, 38, and a small scrappy team decided to use the husks of coconuts as a filler—coconut coir is incredibly absorbent and typically used by cannabis cultivators. By that time, Mandel’s THC extraction business, Arcata X, was legitimate and had a license from the state, and they started infusing the pouches with THC distillate. In 2016, their new company, Cannadips launched in California.

“When we launched, it was for football players, baseball players, outlaws, country guys, NASCAR guys—you know, it was a redneck vice,” says Mandel. “Now, pouches are going crazy.”

Cannadips, which is based in Arcata, a town in California’s Emerald Triangle, makes marijuana-derived THC pouches that are sold in dispensaries in California and Arkansas. With 15 pouches to a tin, Cannadips, like Zyn, comes in several flavors, including mint, tangy citrus, and orange creamsicle.

Cannadips generated more than $7 million in revenue last year and hopes it can double that number this year as when it expands to Missouri. (The company is also in the process of expanding to Kentucky by the end of 2025.) Cannadips also has a CBD and hemp-derived cannabinoids line, which is sold online thanks to the Farm Bill, and in Sheetz gas stations in Pennsylvania and Ohio. Bolt Runners, the parent company, also manufactures other types of pouches, including ones infused with caffeine for Uppperdeckys, the brand launched by Max VanderAarde, the social media Zynfluencer better known as Cheddy. Bolt Runners also manufactures its own nicotine pouch called Ammo and makes nootropics-filled pouches for companies like Aura and Rebel.

Mandel and Sammet, of course, are hoping to replicate the massive success of Zyn, which dominates the multibillion-dollar nicotine pouch industry with nearly 70% market share. Zyn shipment volume in the U.S. jumped 75% from 2022 through the third quarter of 2024 and PMI committed to spending more than $800 million to build two new pouch factories to meet demand.

“Nicotine pouches are going crazy,” Mandel says, “caffeine pouches are going crazy, nootropics are going crazy, but THC pouches haven’t had their day yet.”

Cannadips was the first pot pouch on the market, but it is not alone anymore. In Palisade, Colorado, Jesse Loughman, a 47-year-old cannabis product manufacturer, launched Juana Dips in 2024. The company’s pouches are sold in Colorado and Massachusetts, but Loughman is in talks with 13 other companies in just as many states, negotiating licensing deals to expand the brand. “We are starting to pick up some steam now,” says Loughman.

Its first month on the market, Juana Dips generated just $10,000 in sales. Today, the company is hitting $1.2 million a year. While still a startup, like Mandel, Loughman has also patented his processes and technology. His plan is to eventually sell the company. “I know there are bigger players looking at the pouch market, it’s only a matter of time,” he says. “I don’t know if I want to spend the rest of my life peddling pouches.”

Meanwhile, Cannadips are flying off the dispensary shelves in Arkansas. Casey Flippo, the founder and CEO of Darkhorse Cannabis, a multi-state-operator headquartered in the South with three dispensaries in Arkansas and a manufacturing facility in Missouri, says THC pouches are the most innovative and exciting product on his shelves. The first month Cannadips arrived in Dark Horse’s dispensaries late last year, it only sold 2,500 tins. By the end of 2024, Dark Horse was selling 4,000 tins a month.

“It’s the future of the industry, just like you see in tobacco and nicotine,” says Flippo, explaining how cigarette sales slowly declined over the years, he thinks cannabis consumers will slowly gravitate towards healthier methods of indulging in a vice. “I don’t see this as a fad.”

Back at Cannadips’ factory in Humboldt, where 30 employees are running the pouch line, Mandel says that while he is an outlaw at heart, Cannadips has become a serious business.

“We are working towards a goal of being the bioactive pouch pioneer,” says Mandel.

While pouches are still in Mandel’s words, “a pimple on a pimple on a rhino’s ass” in terms of overall sales in the $32 billion (annual sales) cannabis market, the company’s legion of fans have convinced him that Cannadips is onto something.

“Around 2018, this dude comes up and throws his hands up in the air, starts screaming, and gets down on his knees, and gives a totally crazy, like Neanderthal roar,” says Mandel, explaining the moment when he gave someone their first tin of Cannadips. “He stands up and says, ‘Thank you. I’ve been waiting my whole life for this.’”

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