It has been five years now since recreational cannabis started to become legal in a handful of Western states, and the packaging industry is still divided on pot. Early adopters jumped in and are helping to create top-shelf brands. Some packaging machines have been sold, mostly semi-automatic labelers and bag sealers and smaller form/fill/seal machines. A few sophisticated processing and packaging lines exist, mostly for medical marijuana. Other suppliers stand back waiting to see what is going to happen. Some staunchly refuse to get involved with cannabis, a Schedule 1 Drug, on principle. Others have created offshoot organizations to sell into the controversial market, shielding their involvement from their mainstream customers. And some, let’s not forget, have been selling into the “tea and spice” market for forty years or more.
Many pundits tout edibles as the big growth area, yet more parents and grandparents are being prosecuted for letting children gain access to sodas, candy, baked goods, etc. California has instituted tough regulations prohibiting any packaging resembling food or children’s packaging. California also has underperformed on projected sales and tax revenues in its first year of recreational cannabis, with many critics blaming the heavy regulatory environment.
Plus, reports persist of black markets, fake inspections, and counterfeit barcodes. Some states like Colorado seem to be getting it right. Oregon’s move to recreational has been a dismal failure so far, with three competing agencies responsible for confusion leading to overproduction, which has driven prices down. For all involved, continued changes in the regulatory landscape bring headaches to operations and prevent any real long-term planning.
A particular impediment to larger organizations (with a lot of capital) who desire a nation-wide network is the inability to optimize one operation in one state, then roll it out for fast start-up in another state where the rules may differ greatly.
Yet, in states declaring medicinal or recreational cannabis legal, there are a lot of newsworthy cannabis packages and packaging operations. Other products like CBD oils and lotions are also doing a booming business. Despite the ongoing controversy, Packaging World focuses on these success stories in its February 2019 issue.
More cannabis packaging resources
Most people involved with the cannabis industry are aware of the risks, especially in terms of legal status, but believe the potential rewards out-weigh them. Overall, there is a belief that cannabis will become a mainstream, but heavily regulated, product in the U.S. in the next 10 years, like alcohol and tobacco. Large food and beverage companies are eyeing the market and positioning themselves to be ready to move once the federal threat is removed. In the meantime, because processing, packaging, and retail must be state-specific, suppliers to the cannabis industry must have local teams that understand the regulations and peculiarities of each market.
Learn more from Here to Stay or Up in Smoke? A look at the U.S. cannabis market, a whitepaper from PMMI’s Business Intelligence. Download the report for free at pwgo.to/3349.