The US cannabis market is heating up, with retail sales of cannabis products forecast to advance 18% per year through 2024. The best opportunities are expected for edibles and topicals – the cannabis delivery formats that stand to benefit the most from the federal legalization of hemp-based CBD. But with public support for marijuana legalization at an all-time high – and a majority of 2020 Democratic presidential candidates vowing to fully end prohibition – market opportunities could open up even more.
As cannabis products themselves post rapid gains going forward, so will the products used (and, in the case of marijuana, often legally required) to package them. The market for cannabis packaging totaled $219 million in 2018, according to a new Freedonia Group study. Here are three ways packaging manufacturers can stand out from the competition and cash in with the cannabis industry.
- Ensure Regulatory Compliance
Though the 2018 Farm Bill offered some legal clarity on allowable activities involving hemp and CBD, recent reports of legal products being seized or confiscated in distribution – as recently happened in New York and South Carolina – indicate that there are still a number of kinks to work out.
Adhering to state marijuana packaging requirements is a key consideration for marijuana producers and retailers – particularly those operating in multiple states, since rules and regulations between legal-marijuana states often vary in ways both obvious and less so. For example:
- While smokable flower/bud can be sold in child-resistant bags and other containers in most states, Utah’s medical marijuana program requires such products to be packaged in single-dose blister packs.
- Concentrates, oils, tinctures, and other marijuana-infused liquids must be packaged in child-resistant plastic containers of certain thicknesses (e.g., 4 millimeters or greater in Washington). These containers must also include a dosage-measuring instrument, such as a dropper or measuring cap.
- Capsules, lozenges, and similar medical marijuana products may generally be packaged loosely in a child-resistant container, though some states, such as Hawaii, require single-dose packaging.
- Each serving of marijuana-infused edibles must be individually packaged in child-resistant packaging, even when sold in multipacks.
- Topical marijuana products face relatively few packaging requirements, as these products are not psychoactive. However, labels must often include detailed lists of ingredients and warnings such as “Do Not Eat”.
- Customization & Brand Management
Packaging can facilitate brand owner efforts to achieve a certain identity for their products and increase consumer confidence in them. Hence, packaging manufacturers offering value-added customizable and upscale products will appeal to cannabis brand owners:
- Basic custom packaging elements – such as logo design, typeface, color profile, the texture/feel of the materials used, and the physical shape of the packaging – can have a major effect on a brand’s resonance with target demographics, not only for legal marijuana products that face stricter packaging restrictions, but also for hemp and CBD brands.
- Through customization, brand owners can manage perceptions of marijuana via a range of aesthetics and themes targeting specific groups – from psychedelic motifs that may appeal to consumers going for a hippie lifestyle, to serene, naturalistic depictions that followers of health and wellness trends may identify with.
In particular, due to their wide use for CBD topicals such as lotions and colognes/perfumes, bottles and jars made of higher-end materials such as glass or ceramic that can impart an upscale apothecary image to products that justifies higher price points.
- Sustainable Materials, Practices
States often require cannabis products such as multipack pre-rolls to be individually wrapped, bundled in a primary package, and placed in exit packaging at the point of sale before being taken out of the store. This level of regulation results in intensive use of packaging throughout the supply chain – particularly of low-cost plastic types due to their affordability – and considerable waste. As a result, cannabis businesses are employing packaging materials that promote the values on which consumers increasingly buy products and for which firms want to be known:
- Bio-based plastics are derived from renewable, non-petrochemical resources – typically plant starches.
- Paper-based materials increasingly feature a high level of recycled content.
- Biodegradable materials, including paper, are able to break down rapidly in compost or marine environments.
For example, SunGrown Packaging largely omits plastic from its materials mix in favor of recyclable and compostable materials that support high-quality graphics printing:
- Products include reclosable, child-resistant packaging that uses no plastic and can be reused for other purposes for Zoots’ cannabis-infused food and beverage products.
- The company also specializes in unique sustainable packaging, such as child-resistant paper box designs for Terrapin Pennsylvania and Bison Extracts.
Want to Learn More?
Cannabis Packaging Opportunities, a new study from the Freedonia Group, covers the scope, size, and growth of the US cannabis packaging market, including key trends in cannabis retail sales by product and delivery format. Historical data are provided for 2018, with forecasts for 2019 and 2024, with year by year historical market volatility also addressed. Data are provided in dollar value. The study also provides analysis on industry competitors, including key cannabis packaging producers and distributors. For more on the North American market for cannabis growing supplies, see Freedonia’s pair of studies on the US and Canadian markets.
About the Author:
Peter Kusnic is a Content Writer with The Freedonia Group, where he researches and writes studies focused on the consumer goods and packaging industries.