Brands can live or die by their packaging. All the master growers, rare genetics, THC percentages, charitable donations, social media influencers and celebrity endorsements won’t save a brand without shelf appeal.
It seems unfair, especially in an industry that mandates childproof packaging on top of stringent labeling requirements, that a superior product in poor packaging could be so easily outsold by an inferior product in appealing packaging. But, like any other consumer packaged good, consumers place value on well-produced packaging.
To help level the playing field, Marijuana Venture reached out to leaders in consumer packaging to give readers insight on the many variables of building appealing packaging for retail buyers and consumers alike.
Marijuana Venture: How do state-regulations shape the packages consumers see at retail?
TILT Holdings Inc. president, Gary Santo: In terms of implementation, there’s no question state-regulations can have a tremendous impact on what packages cannabis consumers see on the shelves.
One of the biggest issues is cannabis’ fragmented marketplace. How regulations are implemented and play out varies from state to state, which can be extraordinarily complicated, and nowhere near the standardization levels we see in other sectors. Across the country, one state may set certain requirements, and another may not require it at all. For example, certain states require packages be opaque and be void of any bright colors or designs that would make them attractive to children. State regulations have tremendous influence and certainly make things a bit tricky.
Today, most packaging must be certified as “child-proof” by the state. However, even if you look at child-resistant packaging, which is required by nearly all states, those standards vary. Some of these regulations, while noble in their intent, can also have adverse impacts on patients, the aging, people with neurological disorders like Parkinson’s and others, who often have challenges accessing medicinal treatments in certain child-resistant packaging. As we try to standardize packaging in the sector, these are areas that must be thought through and considered.
Many states require that the packaging can’t resemble packaging for other consumer products, so it also requires innovations and recreating the wheel so to speak to address these ongoing challenges. For operators, your only option is to remain compliant. If you look at the costs and implications it can have, the risk of not doing so is extraordinarily high and can result in large fines or the product being quarantined.
When it comes to implementation, that’s a whole other ball game. Again, you need to ensure you fully understand each state’s requirements and regulations to ensure you remain compliant. And if you have a wholesale model like we do, you also need to ensure that your clients and partners understand them as well, so it can be time consuming.
Over the years, we have worked hard to educate regulators, lawmakers and government bodies on packaging issues, and will continue to do so, but there’s certainly more work to be done on this front before we can reach a standardization point.
MV: How do packaging requirements help/hinder branding and the creative process?
GS: One thing is for sure, the cannabis industry has never been lacking in creativity, but when it comes to packaging, I would say it’s a double-edged sword. I’ve always believed that innovative thinking across the organization can really benefit how you can effectively approach a challenge. When there are challenges like the fragmented regulatory environment we have in the cannabis sector, I think it’s really important to encourage and fuel creativity.
While there may be some areas that suffer creatively due to regulatory restrictions when it comes to packaging, there are also opportunities. For example, integrating new materials and packaging formats for all of the different consumption methods like flower, concentrates, capsules, edibles, topicals, tinctures or sublinguals, is something we are actively working on.
As a wholesale provider of packaging, our approach has been to continue to push forward creative solutions where we can given these market limitations. For example, we are currently exploring different designs that we think will address some of these issues, and I can tell you firsthand that creativity certainly comes into play here, particularly if you look at some of the solutions we’ve already seen emerge on the scentless packaging front. In many respects, these challenges are driving creativity more than ever, and we believe that innovative solutions to these hurdles present opportunities for growth for our packaging business.
MV: Do you see packaging regulations becoming more uniform as the industry matures or are the new states coming online creating more and more packaging rules to pay attention to for multi-state operators? How much of a benefit would it be to have more standardized packaging regulations?
GS: Standardization would be a huge benefit to not only business owners, but also consumers.
We have been seriously looking at quality control, best practices and ways to best shape and drive the future of packaging standards. Areas we have been studying and looking at across functions requires asking tough questions. For example, are there ways for our product development, operations, quality control and marketing teams can work together to develop best practices and set clear guidelines for not only the packaging itself, but also for areas like more concise labeling, marketing definitions for language and various regulatory road lanes to differentiate products through packaging. We also have to consider ways we can avoid any additional burdens to small business owners. We are also looking at safety guidelines that could be used by business owners across the country and globe. Having consistent, nation-wide best practices is something we are actively working on because we think that achieving uniformity is not only needed on the consumer front, but also for businesses too, who are already burdened with the challenges of shifting regulations in the cannabis sector.
MV: How important are sustainability or automation in packaging materials/procedures?
GS: This is an area that is a growing concern for governments around the world –not just in cannabis, but in every other CPG industry. Many of us, who helped form this industry, understand that finding a balance between environmental, social and economic demands are important. As a wholesale provider of packaging, we have a responsibility to look at how we procure packaging and raw materials used in the packaging, the manufacturing process, its distribution and its eventual disposal.
Personally, I am a believer that green can be green. I think sustainable packaging can make sense from a bottomline and business perspective, a brand allegiance and loyalty point of view for both consumers and clients if done correctly, but again, setting clear standards about sustainability means for the sector is also needed and something that is currently lacking.
Sustainable packaging can also be a toll to provide consumers with important information about a brand and the company’s value. Today, Gen Z and millennials make up about 40% of cannabis consumers in fully legal states. As these consumers age and more lifestyle consumers enter the marketplace, we believe sustainable options will not only become more popular, but also likely mandated in the future — if not in the U.S. — certainly in emerging markets like the EU.
However, the challenge for cannabis businesses is how to best develop packaging that meets the objective of sustainability, but also performs the tasks for which the packaging is required and does so within the budgetary reach of manufacturers, distributors and consumers.