5 Common Cannabis Packaging Problems—And How to Solve Them
STO Responsible’s Sandra Elkind and Nicole Elkind discuss the industry’s common challenges, from balancing safety and sustainability to standing out from the crowd.
Sandra and Nicole Elkind say they’ve identified some of the cannabis industry’s most common problems with packaging. Together, they intend to solve them.
“One of the things that kept popping up was that they have a lot of difficulty around packaging,” she tells Cannabis Business Times. “Nicole has a strong business background, and I have a strong design background, and so we decided to come together and tackle those problems. About three and half years ago, we set out on this path and have been working on not only solving how to develop a child-resistant package for the cannabis industry specifically, but also to look at … some of the bigger problems in the industry in packaging, like sustainability and helping to create a safer market as it gets bigger.”
Here, Sandra and Nicole outline common packaging problems that cannabis cultivators, manufacturers and dispensaries face as they package their products in compliance with state regulations, and provide insight on solutions.
Photo courtesy of STO Responsible.
1. Balancing Safety and Sustainability
For a package to be strong enough to be child resistant—a common requirement in the cannabis space—the sustainability component may suffer, Nicole says. Plastic is often used to meet child-resistant packaging requirements and is typically not as environmentally friendly as other materials. Some packaging companies, such as STO Responsible, offer a more sustainable solution.
“We chose to go with a plastic that has an accelerated degradation rate to it,” Nicole says. “So, it’s not only recyclable, but the degradation of the plastic is sped up by a formula we have inside of our plastic.”
Packaging choices in the industry can be limited, which makes it difficult for companies to find packaging that uses the least amount of material and has the smallest carbon footprint possible. Companies should hunt for multi-use packaging that accomplishes multiple goals at once, Nicole says, to reduce the amount of packaging needed to accomplish these goals.
“Oftentimes [with] these packages [or] exit bags, the consumer just pulls their product out of it and tosses that certified child-resistant vessel out because it’s hard to open and close or it is just an exit bag,” she says. “So, one of the things that our product addresses is that it’s multi-use—you can actually keep your product in it and it remains child resistant at home until the product’s gone. I think that’s important just because for producers, it’s the right thing to do.”
As the industry continues to mature, it tends to develop new technologies, Nicole adds, and more child-resistant packaging options are emerging with time.
“You have companies playing with a lot of different types of materials that you don’t see other industries even approaching, so I think the future for cannabis is for us to really start pushing the boundaries of how we use material and how can we use current technologies to make better materials,” she says.
2. Ensuring Proper Labeling (While Leaving Room for Branding)
Base packaging in the cannabis industry must often be opaque or clear, depending on state regulations, and bear state-mandated labels, Nicole says. Ever-changing regulations can be hard to keep up with, and including branding in addition to the required labels is also difficult. Warning labels, for instance, are often mandated at a specific size or location on the packaging.
STO Responsible aims to create packaging that gives companies more space and a flatter front for labeling, which allows the legal language to be separate from branding and offers flexibility as regulations change, Nicole says.
“So, for example, our boxes can hold and handle the warning labels if you want to use a sticker right on our box, or if you want to have some sort of wrap or sleeve around the box, we’ve designed different versions that would allow our manufacturers to put that legal language … on the box, but then have the wraps of their branding cover it up, so the consumer would be able to open it and see it at their leisure, but the manufacturer doesn’t miss out on an opportunity to have branding space on the shelf,” she says.
3. Standing Out From the Crowd
Implementing those branding and display options in such a way that helps cannabis companies distinguish themselves from their competition is the next challenge, Nicole says.
“Since every dispensary is a little different in their take—and because it’s sort of a newer industry—they don’t have the same sort of retail space that a normal grocery store or a liquor store might have where you can have an end unit kiosk all for your brand,” she says. “Really, one of the main things that they have to fight for is shelf space and how to stand out on the shelf space, be that inside of a display unit or on walls behind the budtenders at the dispensary.”
And it can be difficult to find packaging that allows a company to stand out from the crowd, as there are limited options for display units as compared to other consumer-facing products, Nicole adds.
“A lot of times they end up using a lot of additional packaging in order to do that, where they might start off with it having the pop-top package, but they want to stand out on the shelf, so they then put that into another package,” Sandra says. “We really wanted to set out and create a package that would give them that presence on the shelf and then not really require them to have to have additional packaging on top of it to get that presence.”
Creativity also suffers from the lack of available packaging options, Sandra adds, as limited packaging shapes may limit manufacturers’ creativity when it comes to creating products.
“This can be a big problem … in states that have lighter regulations and are now moving into stricter regulations because you might have a company that has been making their fancy baklava for two years, … and now the new packaging regulations don’t allow for them to package their baklava anymore and they have to change their product offerings,” she says.
Cannabis companies should look for packaging providers that are working with product development and creating innovative packaging, Sandra adds, in order to continue to produce products that help them stand out.
4. Finding the Right Packaging Partner
When shopping around for a packaging provider, cannabis companies should not only look for innovative packaging providers, but also providers who offer a domestic supply chain and flexible delivery, Sandra says.
“A lot of people get wrapped up in, does this package work? But getting the package to you in a timely manner and not having to worry about going through ports and how much do you have to wait on delivery each time could really help ease some of the frustrations that they’re dealing with in the compliance of packaging,” she says. “Knowing that you have a company that has a domestic supply chain and a company that works with what delivery schedule you need can really make a difference in your experience in the packaging area of cannabis.”
5. Satisfying the Consumer
Through STO Responsible’s research and development efforts, it has discovered that cannabis consumers are most interested in sustainable and easy-to-use packaging, Sandra says, and companies should strive to satisfy these desires.
“You find a lot of people who will complain that they struggle to get into the package to get their medicine,” she says.
Another factor consumers consider—which may often be overlooked—is if the package is pet-resistant, Sandra adds.
“If their dogs’ teeth can get into the package, then they’ll eat the brownie, or if they’re able to basically push their paws in and figure out how to open it, … they’ll figure out how to get into it,” she says. “One of the things we did when we were in our development was to really take into account not only [a child-resistant] approach [to] this, but what are dogs doing when they smell that in there and they want to get to it?”
Top image courtesy of Adobe Stock
Cannabis Concentrate Sales Are Growing, But Consolidation Is Coming
A new report from BDS Analytics and Arcview Market Research shows accelerated growth in this market niche—and an impending shakeout.
In case there were any doubts left, a new report from BDS Analytics and Arcview Market Research confirms that cannabis concentrates sales far outpace both flower and edibles in legal U.S. markets. This market segment shows no signs of slowing down.
Retail concentrate sales are projected to hit the $8 billion mark by 2022, based on data collected through the research company’s GreenEdge point-of-sale tracking service.
Concentrates have become the fastest growing of the three major segments of the legal cannabis market (flower, concentrates and edibles), largely due to consumer appeal, the report says—the ease of use, potency, discretion and portability of concentrates draws consumers in. Additionally, concentrates are a healthier option for cannabis inhalation, the report says.
“Much growth can be attributed to the beginner-friendly, brand-identified vaporizer cartridge subcategory,” the report reads. “A once-overlooked category with sales of under $100 million in 2014, cartridges now surpass the specialized subcategories of resins, waxes, etc.”
In 2017, vapes already made up more than half of total U.S. concentrate sales, the report continues, but the subcategory’s appeal to consumers will likely continue this pattern and reach nearly $6.5 billion in total U.S. sales in 2022.
This growth has benefits for the entire cannabis supply chain, the report adds.
Concentrates can offer cultivators decreased production costs and increased profits, as those who extract cannabis to produce concentrates can save processing costs by eliminating the trimming, manicuring and curing process. And since flower grown outdoors can produce the same quality concentrates as indoor crops, concentrate manufacturing also offers growers larger margins for their outdoor crops as wholesale prices continue to fall.
The increased profit margins from manufacturing based on outdoor flower will also help boost the sustainability of the cannabis industry, the report adds, as indoor cultivation consumes a large amount of energy.
Concentrates’ higher price points per unit may also make them more profitable for retailers when compared to flower, and for consumer goods companies, concentrates and other manufactured products offer opportunities to add value through branding and marketing, the reports says. This market segment also improves sustainability and lowers costs for distributors, who will require less shipping space and less fuel to move cannabis oil as compared to raw flower.
For customers, concentrates represent a more user-friendly entry point. For retail, this means leaps and bounds in sales numbers. The bridge between customer and retailer: brands.
“In developed cannabis markets, competition among cannabis businesses is so fierce that many experienced customers will expect quality products to be branded,” according to the report. On a long enough timeline, and in a North American marketplace that might one day see federal legalization in the U.S., this trend will only become clearer.
Because the industry is still in its early stages, despite growing at such a rapid clip, there’s opportunity for smaller brands to enter the marketplace relatively easily—especially in states like California, Colorado and Washington. Across the U.S., market fragmentation is about the only real constant in the cannabis industry right now. The door is wide open for an upstart processor to begin manufacturing concentrate products in, say, Colorado, but BDS Analytics and Arcview predict a plateau in the offing.
“While the volume of new product is a positive market of consumer demand, such fragmentation has its downside,” the report states. “A lack of consistency in product types and categories from market to market is confusing at the customer level and can inhibit nascent demand. Similarly, a lack of defined categories in the supply chain leads to duplicate efforts. These hamper individual bottom lines and contribute to an oversupply at the retail level.
“In other words, the market is poised for a shakeout.”
While the market itself certainly isn’t going to contract (concentrate sales are expected to eclipse $8 billion in the U.S. by 2022), the consolidation of brands will mean that only the most visible and farthest-reaching companies will thrive in an increasingly competitive arena. This is already the case in the longest-running legal adult-use market in the country, Colorado, where the top five concentrates brands have captured 49 percent of the market share, according to BDS Analytics and Arcview.
The report lists seven break-out concentrates brands, each performing at the top of their class: AbsoluteXtracts, Concentrate Supply Company, Craft, Evolab, Kurvana, O.penVape and Select Oil.
Those companies are each based in more mature markets, like Colorado, California and Oregon. As the BDS/Arcview report lays bare, those more developed markets allow extraction and processing companies to find the highest-quality single-source flower for their products. Often, due to a general oversupply trend out west, this allows extraction brands to lower their production costs and reap higher profit margins on the back end.
It’s not all cheery news, though; the BDS/Arcview report also looks at political concerns and points out the potential downsides of this market niche. While the FDA and lawmakers have rallied against youth vaping (of tobacco products), it’s unclear whether action would be taken to ban specific types of cannabis products at any point.
Following a wave of church-led protests, the ruling Georgian Dream-Democratic Georgia party has decided to backtrack on the draft bill envisaging legalization of medical marijuana cultivation and production for export purposes.
Speaking to reporters on September 16, Parliament Speaker Irakli Kobakhidze said the GDDG would not take “a hasty” decision on the legislation, and would instead, invest in informing the public of its true objectives, including through consultations with the Patriarchate.
The Parliament Speaker stressed the citizens were “misled” by GDDG opponents that the legislation entails legalization of production and sale of drugs.
“The society is not properly informed; there are false information being spread, there are speculations, so we need to pay particular attention to informing the public and decide [on the legislation] together with them,” Parliament Speaker Irakli Kobakhidze said.
A bill to create a legal marijuana marketplace in New Jersey is "98 percent" done, with a dispute over tax rates the only major sticking point, one of the state's leading legal marijuana advocates said.
Scott Rudder, who heads the New Jersey CannaBusiness Association, a trade group of aspiring marijuana growers, cultivators, retailers and related businesses, said the major holdup is whether to impose a 25 percent tax on retail marijuana sales right away, or start with a lower tax rate that escalates to that level over several years.
Speaking at a conference sponsored by the business newspaper and website NJBIZ, Rudder said he remains optimistic that lawmakers will soon hammer out a deal to make New Jersey the ninth state to allow adults 21 and over to use marijuana for any reason.
“I’m very, very, very confident," Rudder told more than 100 people at a hotel in Somerset. "We have worked out 98 percent of the issues.”
Marijuana Policy Project Endorses North Dakota Ballot Initiative to Legalize Marijuana for Adults
The marijuana policy reform group is throwing its support behind the local grassroots effort to pass Measure 3, which would make marijuana legal for adults 21 and older and expunge past marijuana-related convictions.
WASHINGTON — PRESS RELEASE — The Marijuana Policy Project announced Wednesday it is endorsing Measure 3, the initiative to legalize marijuana for adults in North Dakota and expunge past marijuana-related convictions.
MPP is the nation's largest organization dedicated exclusively to marijuana policy, and it played leading roles in the successful legalization initiative efforts in Colorado, Alaska, Massachusetts, Maine and Nevada. It is the latest organization to throw its support behind Legalize ND, the local grassroots campaign that qualified Measure 3 for the November ballot.
“The Marijuana Policy Project supports Measure 3 and strongly encourages North Dakotans to vote in favor of this important initiative,” said MPP Deputy Director Matthew Schweich. “North Dakota's current marijuana prohibition laws are ineffective and wasteful, causing more harm to consumers and to the community than marijuana itself. Adults should not be punished for using a product that is objectively less harmful than alcohol, and law enforcement officials' time and resources would be better spent addressing serious crimes. Once marijuana is a legal product for adults, it can be regulated and controlled similarly to alcohol. It is time for North Dakota to join the growing number of states that have ended prohibition and taken new, more sensible approaches to controlling marijuana.”
MPP will assist Legalize ND by offering guidance and support with strategy and fundraising, as well as by mobilizing its supporters in North Dakota and around the country.
“We’re thrilled to have MPP’s support, and we look forward to working with them in the weeks leading up to Election Day,” said Legalize ND Chair David Owen. “With their help, we’ll continue to educate voters about the benefits of legalization and the harms of prohibition.”
Measure 3 would remove penalties for possession and cultivation of marijuana by adults 21 and older. It would also establish a process for sealing criminal records of individuals with prior marijuana convictions. In 2016, North Dakotans approved a medical marijuana ballot initiative, Measure 5. State regulators have been slow to implement it, and dispensaries are not expected to open until 2019.
“MPP is proud to throw its support behind this local grassroots effort,” Schweich said. “There is clearly a strong desire for change in North Dakota, and since state officials have not taken on this issue, it is up to the people to get it done. Voters will have a chance to make their voices heard this November, and we hope they will use it to say 'yes' on Measure 3.”
MPP is supporting several ballot initiative efforts this year, including Prop. 1 in Michigan, which would legalize and regulate marijuana for adult use, and Prop. 2 in Utah, which would legalize and regulate marijuana for medical use. Nine states and the District of Columbia have already approved laws making marijuana legal for adults, and eight of those states also regulate the commercial production and sale of marijuana for adult use.
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