How cannabis legalization will drive profound packaging innovation.
April 26, 2019
by Tom Egan
On October 17, 2018, the Canadian federal government legalized recreational cannabis. Within the first 15 days of legalization, sales at cannabis stores across the country totaled $43 million. Fast-forward to the
end of the year and Canadians spent $1.6 billion on legal cannabis in 2018—more than double the amount spent on solely medical cannabis in 2017.
Growing alongside the legal marijuana industry in Canada and parts of the U.S. is the producers’ interest in packaging and processing solutions to meet the challenges of this burgeoning sector.
In addition to the usual hurdles associated with growing a business within a young product category, cannabis producers must also navigate stringent regulations on packaging, meet consumer demand for sustainable options and secure suppliers amid fears surrounding the industry’s volatility.
It’s a tall order, but far from impossible with the next generation of packaging and processing technologies.
While producers understand how to grow and cultivate top-quality cannabis, packaging can sometimes become an afterthought. Additionally, producers face complaints from environmentally conscious consumers
concerned about the waste created by single-use packaging for cannabis.
In response to such complaints, a Prince Edward Island-based cannabis producer FIGR East is exploring new packaging that will be better for the environment.
Health Canada’s requirements specify label sizes for cannabis packaging and then require that the primary package be large enough to accommodate those labels, making it challenging to use smaller containers for smaller amounts of cannabis.
FIGR East is tackling the problem by working with a packaging consultant to find environmentally friendly packaging and will be introducing its new packaging in two phases over the next eight months.
In addition to labeling size regulations, Ottawa has proposed limiting packages to a maximum of 10-mg dose of THC per container, so six edibles of 10-mg each must be packaged separately, for example.
Some producers want the government to relax that guideline, as they fear that environmentally minded customers will be upset about the excess waste.
A study by Deloitte found that packaging size and style is a consideration for consumers making cannabis purchases, and they are willing to pay significantly more per gram of cannabis if it is available in preferred
According to Deloitte, 46 per cent of current cannabis users and 36 per cent of likely users are more likely to buy a cannabis product if it was available in preferred package sizes. Moreover, 19 per cent of current
users and 17 per cent of likely users are more apt to purchase a cannabis product if it is available in a preferred package type, the report points out.
Like the pharmaceutical industry before it, the cannabis industry must focus on developing packaging that can address the different cannabis formats while meeting accessibility regulations.
Childproof packaging is a major focus for industry innovation, and packaging companies are releasing exciting new technologies. Some companies are experimenting with containers that have web-enabled combination locks connected to physician’s offices.
Others are exploring new childproofing mechanisms, like CRATIV, a company making reusable cannabis packaging with a unique two-part opening mechanism.
Cannabis companies are also actively looking for high-tech machinery that automates manual cultivation and inspection equipment that aids in detecting and eliminating contaminants during harvest.
Testing is required at multiple stages of processing to determine the level of THC in the product. Testing generally takes place upon harvest, when the cultivator evaluates the flower for potency, contaminants, pesticides and other regulated endorphins.
Once concentrated the oil must be tested again, as concentrated oils contain dramatically higher levels of THC than flowers.
For instance, the flower may contain 15 per cent THC, but once concentrated will have dramatically higher levels of 70- to 90-percent THC, depending on the processing method. Better, faster CO2 extraction equipment is also in demand for processing cannabis concentrates.
According to the 2017 report titled Here to Stay or Up in Smoke, produced by PMMI, The Association for Packaging and Processing Technologies, formats are shifting away from cannabis as a flower or bud
and towards more processed formats of oils, edibles and topical products.
Cannabis companies are reaching out for heatproof borosilicate glass containers, polystyrene containers, and BPA-free acrylic containers for packaging oils and waxes. For their part, edibles require sealed tube jars, single-use bags using food-grade films and resealable, smell-proof bags.
The Cannabis Act, indoctrinated on Oct. 17, 2018, outlines labeling requirements designed to prevent accidental consumption, ensure products are not appealing to children and youth, and provide customers with
information they need to make informed decisions before using cannabis products.
It requires that packaging clearly convey factual and accurate information about cannabis products, information about the level of THC in products and information on any other ingredients that have been added
to cannabis products.
The Act also includes restrictions on promotional activities, including promotion that is considered appealing to youth, promotion that includes false, misleading or deceptive information, promotion through
sponsorship, testimonials or endorsements and promotion using depictions of persons, celebrities, characters or animals.
These regulations create some challenges among cannabis brands aiming to differentiate against competitors and foster loyalty among consumers.
Organizations like Canna Design Council, a brand development and design consultancy, can help cannabis producers balance regulations with brand continuity.
Companies should invest in flexible labeling systems that allow them to accommodate for changing labels and short-run productions for a variety of product labels.
The Resource Label Group is one company offering variable data printing (VDP) solutions that can help cannabis producers easily and cost-effectively comply with ever-changing legal requirements.
With VDP solutions, companies can design a label template that can be easily customized to print labels with unique product information, while keeping branding consistent.
Printed on small, high-quality printers that print unique labels on demand and in short-run batches, this allows cannabis producers to vary labels within the same print run. With this technology, cannabis producers can avoid overprinting labels, thus reducing waste and cost.
Health Canada also launched an online Cannabis Tracking and Licensing System (CTLS), which enables the tracking of cannabis, prevents legal cannabis from entering the illegal market and prevents illegal cannabis from entering the legal market. Under CTLS, retailers and distributors are required to submit monthly reports to their province or territory.
This establishes a robust track-and-trace system for Canadian cannabis producers.
Software companies like trellis and Bio Track THC are offering “seed to sale” solutions specifically designed to help producers stay compliant and optimize operations.
Many emerging cannabis brands advocate assistance for people serving long prison terms for pot use. For example Marley Natural, named after famed reggae musician Bob Marley, is committed to helping those formerly incarcerated for pot use find jobs and training.
Other brands focus on sustainable farming and manufacturing practices.
After customers at Alberta-based lifestyle products company High Tide consistently reported dissatisfaction with the excess amount of packaging on cannabis products, the company unveiled a free recycling program at all of its Canna Cabana retail stores.
As part of the program, the retailer will accept all cannabis-packaging items such as outer and inner plastic packaging, tins, joint tubes, plastic bottles, plastic caps and flexible plastic bags purchased from a licensed retailer.
Customers can drop all packaging materials featuring the Health Canada THC symbol at any Canna Cabana store, which will be sent by the company to a qualified recycling services provider.
The materials will then be reused, upcycled or recycled into a range of affordable, sustainable consumer products and industrial applications.
By all accounts, the legalization of the cannabis market is poised to have a major overall effect on Canada’s economy.
Deloitte estimates the potential economic impact of legalized recreational marijuana in Canada to be at more than $22 billion, including transportation, licensing fees and security.
The typical cannabis consumer tends to be younger, aged 18 to34, but legalization invites an older, more conservative crowd, aged 35 to 54, to join the party.
As the market develops, the cannabis industry will see an increased demand for e-commerce options. One-third of recreational cannabis consumers are interested in buying products online through approved websites, for privacy.
According to a recent Canadian Imperial Bank of Commerce (CIBC) forecast, by 2020 the cannabis industry will have a retail value of $6.8 billion—larger than the hard liquor
market and almost as large as the wine market.
Not surprisingly, the alcohol and cannabis markets are already seeing some overlap. For example, Province Brands of Canada and Ontario brewery Lost Craft Beer are partnering to make beer brewed from cannabis instead of barley., while Molson Coors Canada and Canadian cannabis producer HEXO announced a joint venture in October 2018 to develop non-alcoholic, cannabis-infused beverages for the Canadian market.
With the genie out of the bottle, there is no doubt we will see much more of this crossover collaboration in the future.
Tom Egan is vice-president of industry services at PMMI, The Association for Packaging and Processing Technologies.