Introduction: Why “Functional Cannabis” Is Reshaping the Industry
Cannabis is no longer just about getting high. That shift is exactly what Peter Barsoom set out to address when he left Wall Street to build a new kind of cannabis company focused on precision, predictability, and wellness outcomes.
In this episode of the Dispensary Marketing Podcast, Peter Barsoom, founder of 1906, breaks down how he saw a massive gap in the early legal cannabis market: products that were inconsistent, overly focused on high-potency effects, and designed almost entirely for one type of consumer. His solution was a new category he calls “functional cannabis,” where every product is designed around a specific, predictable effect.
This article breaks down Peter’s framework, the origin of 1906, and what dispensaries and brands can learn from a science-driven, customer-first approach to product development and marketing.
From Wall Street to Weed: The Origin of 1906
Peter Barsoom didn’t enter cannabis as an outsider experimenting with a trend. He entered as a consumer first.
After leaving finance, he began exploring new opportunities and visited Colorado shortly after legalization expanded in 2014. What he found inside early dispensaries was both exciting and limiting. On one hand, legalization had created a new, normalized access point for cannabis. On the other hand, the product landscape was narrow and repetitive.
Most products were designed for a single outcome: high-dose intoxication.
For Peter, that wasn’t enough. He wasn’t just looking for intensity. He was looking for control over the experience: how it would feel, when it would kick in, and how long it would last.
That gap became the foundation for 1906.
The company was built around a simple but powerful idea: cannabis should behave more like a functional tool than an unpredictable recreational product. Instead of guessing how an edible might affect you, consumers should be able to choose a defined experience with predictable effects.
The Problem With Early Cannabis Products
One of the key issues Peter highlights is how early cannabis edibles failed to serve a large portion of the market.
The dominant product philosophy was:
- High potency
- High THC
- One-size-fits-all effects
But that approach ignored a major group of consumers: people who wanted specific outcomes like focus, relaxation, energy, sleep support, or mood enhancement without unpredictable intensity.
Peter’s personal experience reflected what many consumers were going through:
- Delayed onset times
- Unclear dosage control
- Long, unpredictable duration
- Overwhelming effects with no “off switch”
For him, this wasn’t aligned with how modern wellness products should behave. If cannabis was being positioned as medicine or wellness support, it needed to deliver consistency and clarity.
That realization led to the creation of a new category: functional cannabis.
Defining Functional Cannabis
At the core of 1906 is the concept of functional cannabis, which Peter defines through three pillars.
1. Control of the Experience
Consumers should know:
- How it will make them feel
- When it will kick in
- How long it will last
This removes the uncertainty that defines much of traditional edible consumption.
2. Functional Outcomes
Cannabis is mapped to real-life use cases such as:
- Sleep support
- Energy and focus
- Mood enhancement
- Pain relief
- Anxiety reduction
- Social relaxation
Instead of a single “high,” cannabis becomes a system of targeted effects.
3. Flexible Consumption Methods
1906 products are built across multiple formats:
- Pills
- Chocolates
- Gummies
- Beverages
The goal is not just effect-based design, but also giving consumers control over how they consume.
This framework positions cannabis closer to functional wellness categories like supplements or nootropics than traditional recreational products.
Why Most Dispensaries Misread the Market
One of the strongest insights from the conversation is how early dispensary feedback misled brands.
According to Peter, many dispensary operators believed:
- Customers only wanted THC-heavy gummies
- Price sensitivity was the dominant factor
- Product differentiation didn’t matter
But 1906 chose to ignore parts of that early data.
Instead, they focused on a different signal: what their target customer actually wanted.
This is where Peter emphasizes something counterintuitive:
Sometimes, you have to ignore data if it reflects only the current market limitations rather than future demand.
That decision led 1906 to launch products at lower doses (like 5mg instead of 10mg), even when dispensaries pushed for stronger products.
The reasoning was strategic:
If you optimize only for immediate sales, you risk destroying long-term product positioning and customer experience consistency.
Building a Brand by Being Obsessively Customer-First
A recurring theme in Peter’s approach is extreme customer focus.
But importantly, the “customer” wasn’t abstract.
It was personal.
He and his team designed products for themselves first, under the assumption that there were many others like them: high-functioning adults who wanted cannabis as a tool, not an escape.
This led to three key behaviors:
1. Deep in-Field Research
Instead of relying on dashboards alone, the team:
- Spent time in dispensaries
- Conducted pop-ups
- Talked directly to budtenders
- Collected feedback from real purchasers
- Observed repeat purchase behavior
2. Social Listening and Support Feedback
They also tracked:
- Customer service insights
- Online sentiment
- Community feedback loops
3. Behavioral Validation Over Opinion
Rather than asking “Do people like this?” they focused on:
“Do people come back and buy again?”
This shift from opinion to behavior became a core part of their validation model.
The Science Behind Functional Cannabis Products
One of the most unique parts of 1906’s model is its scientific approach to formulation.
Peter explains that product development starts with defining the desired outcome first.
For example, in building an energy-focused product, they broke down what a “good energy experience” actually means:
- Fast onset
- Sustained energy
- No crash
- No jitters
- Calm alertness
Then they reverse-engineered the formulation using:
- Cannabis compounds
- Botanicals
- Functional ingredients like caffeine modifiers, L-theanine, and others
The process involves collaboration between:
- Natural product chemists
- Pharmacologists
- Food scientists
They also rely heavily on existing research around compounds like caffeine and how they interact with the human nervous system.
The key idea is not just cannabis chemistry, but synergy between compounds, often referred to as an entourage effect.
Every product goes through:
- Formulation
- Testing cycles
- Controlled feedback loops
- Iteration based on real user responses
Only after consistent outcomes are achieved does the product enter the market.
Scaling Through Feedback and Iteration
Once products are in the market, the process doesn’t stop.
1906 continues to collect feedback and refine formulations based on:
- Usage patterns
- Customer reports
- Consistency of effects across users
Peter notes that confidence increases when:
- Feedback is consistent across users
- There is low variability in experience
- A sufficiently large sample size confirms results
This creates a loop:
Build → Test → Learn → Adjust → Scale
It’s a product development philosophy closer to biotech or pharmaceuticals than traditional consumer packaged goods.
The Mobile Manufacturing Model
One of the most innovative operational strategies discussed is 1906’s mobile tableting system.
Instead of building expensive facilities in every state or outsourcing production, they developed a portable manufacturing system housed in a truck.
This allows them to:
- Manufacture in multiple states
- Maintain quality control
- Reduce capital expenses
- Respond to market demand flexibly
Each setup produces enough inventory for several months before moving to the next market.
This model is especially effective in cannabis due to regulatory fragmentation across states, which makes centralized production nearly impossible.
It also ensures that products are always made by trained 1906 teams, preserving consistency and brand integrity.
Where the Cannabis Market Is Headed Next
Looking forward, Peter sees beverages as the most promising category in cannabis.
His reasoning is based on three factors:
1. Consumer Behavior Shift
People are increasingly:
- Drinking less alcohol
- Seeking alternatives for social consumption
2. Format Familiarity
Most mood-altering legal substances already consumed today are liquids:
- Alcohol
- Coffee
- Energy drinks
3. Distribution Infrastructure
Alcohol distribution networks already exist and are age-gated, making them a natural fit for cannabis beverages.
This convergence makes beverages a logical next frontier for the industry.
Advice for New Consumers of 1906
For first-time users, Peter recommends starting with a discovery kit, which includes a range of products designed for different effects.
Popular entry points include:
- Bliss (mood enhancement and social relaxation)
- Genius (focus and cognitive support)
These products are designed to be functional microdoses rather than heavy intoxicants.
Most consumers, he notes, use products daily for:
- Anxiety reduction
- Pain relief
- Pre-workout energy
- Sleep support
The key distinction is that these are not occasional “party products,” but functional daily tools similar to coffee.
Conclusion: Cannabis as a Functional Wellness Category
Peter Barsoom’s vision for 1906 challenges the traditional cannabis model. Instead of focusing on intensity and intoxication, he reframes cannabis as a predictable, science-backed wellness tool.
The shift is clear:
- From chaos to control
- From randomness to repeatability
- From recreation to function
For dispensaries and cannabis brands, the takeaway is equally clear. The future of the industry will not be won by the strongest product, but by the most predictable, trustworthy, and purpose-driven experience.
As Peter puts it through his work, cannabis works best when you understand exactly what it will do, when it will do it, and why it was designed that way.
That is the foundation of functional cannabis—and possibly the next major phase of the industry.
