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Challenge and Opportunity in Medical Marijuana Packaging

With constant changes to regulations, it’s an unstable time for the medical marijuana market. But with market estimates in the billions, some packaging suppliers are finding that the risks are worth the rewards.

Family of plastic pop top containers. Courtesy of Kush Bottles
Family of plastic pop top containers. Courtesy of Kush Bottles

Medical marijuana (also known as cannabis) may still be a divisive issue among some communities, but as research continues to demonstrate efficacy in treating diseases and symptoms, the market shows undeniable growth. The 2015 Marijuana Business Factbook (a division of Anne Holland Ventures, Inc.) estimates that the medical cannabis market alone would be worth $2.4 to $2.5 billion in 2016, and expects it to reach between $3.3 and $3.8 billion by 2019.

Now legal in 25 states and the District of Columbia, the medical cannabis market is attracting established packaging companies as well as startups like Kush Bottles, the first publicly traded packaging supplier focused on the cannabis industry.

Variances by state

While there is nothing illegal about producing the packaging itself and it can be shipped to any state, compliance presents a challenge for packaging manufacturers. All cannabis production, packaging and sales must occur within state lines, and is further complicated by frequently changing rules, specific to each state where medical cannabis is legal.

J.L. Clark is an established packaging manufacturer with a 112-year history in decorative tins, metal lithography and injection-molded plastic packaging (clients include Burt’s Bees and McCormick). Referring to cannabis packaging, “The market is unstable and inconsistent from state to state or even county to county. It’s quite different from other markets we participate in,” says Phil Baerenwald, President at J.L. Clark.

“Products move quickly and the market fluctuates,” says Nicholas Kovacevich, Co-Founder and CEO of Kush Bottles. “We have to tailor our product mixes to different states, and stay agile to change designs and meet new regulations quickly.”

Packaging materials

There’s a lot to think about when it comes to packaging. Beyond the traditional dried flower buds (“flower”), there are a multitude of cannabis products, such as oils, extracts, and edible products. Depending on the product, packaging is usually composed of plastic, glass, paper or metal. The FDA does not regulate the packaging used for cannabis directly, however, they do regulate the materials used in the manufacturing process.

As is the case with many medical products, one of the most important things about packaging is child-resistance. Appearance, labeling and distribution channel regulations are state-specific as well, which have an effect on what packaging materials a customer selects.

The entity purchasing packaging may be a grower/processor or retailer, depending on the state. For example,

  • Colorado maintains its “70/30 Rule,” a vertical integration model requiring that 70% of a retailer’s product is grown (and consequently packaged) in-house on the medical side. There are no vertical integration requirements on the retail side.

  • In Washington, a grower licensee cannot be a retailer. Products are packaged at the grower or processor level in tamper-evident packaging, not to be opened until they are purchased from the retail shelf.

Barrier bags are often used for cannabis packaging, however, there are special nuances depending on the market. In Colorado and Washington, barrier bags can be considered a child-resistant form of packaging if used for a single-serving item and designed without easy tear notches. If the serving size is greater than one, then another form of reclosable child-resistant packaging must be used. Kush Bottles supplies barrier bags for Colorado and Washington, which are often pre-printed with state-specific use warnings.

So how do packaging suppliers keep up with such differing rules? They visit trade shows and events, talk with customers and industry professionals and meet with state regulators. Kush Bottles’ partners in Colorado own and operate arguably the most compliant cannabis production facility and retail store in the country, where state regulators and officials often visit for educational and training purposes.

Where other medical products can have a several-year shelf life, medical cannabis is typically consumed quickly after sale, so packaging does not need to provide as long of a shelf life. There are, however, quite a few considerations for packaging materials, including:

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INTRODUCING! The Latest Trends for Life Sciences at PACK EXPO Southeast