By Alen Nguyen
Packaging can be fairly new to those entering the recreational cannabis industry, and there is a lot that can be learned from those who have gone through Washington’s roll-out. Packaging has three major components to it in the cannabis world that should receive special attention: branding, compliance and processing.
– Branding: This seems like a no-brainer, but you’d be surprised how many cultivators overlook this important part of packaging, or wait until the last minute before product hits retail shelves. When the topic of branding has been approached with growers, many have said something along the lines of, “I’m not too worried about that. My product sells itself. It’s top-shelf cannabis.”
Previously, when growers sold their products to dispensaries, cultivators would bring in a bag of XYZ Company’s cannabis that was a particular strain and potency. Then it would go into a large glass jar, and it was no longer XYZ’s cannabis. When sold in this manner, it’s now just a Blue Dream that tested out at 20% THC. Without branding or packaging, the product would have to sell itself on quality alone.
The evolving marketplace allows customers and patients to peruse the variety of cultivators producing Blue Dream, placing heavier emphasis on brand recognition. Branding can immediately create a higher perceived value than companies that didn’t put as much thought into their packaging and design. It also allows customers to quickly identify your brand, and remember the quality from the last time they consumed it. Branding serves two purposes: gaining a first-time customer, and keeping that customer. It also convinces customers to try your other products based on the branding alone. If they’ve tried your flower before, but want a pre-rolled joint, then it’s an easy choice when they see a joint box that matches your custom bag.
– Compliance: In the cannabis industry, the rules will change fast, often and without notice. This especially applies to product packaging and labeling, and even more so with infused products. This is probably the most important takeaway from this whole article: Be careful with your packaging investment.
I highly advise against purchasing expensive packaging equipment that costs more than $15,000 unless it can produce a nationally certified child-resistant package. With all the rule changes, you could invest in a packaging machine that produces an amazing product and streamlines your operations, but becomes an expensive paperweight with just one rule change. This hedging of risk also provides the benefit of being able to test out your branding and product. Going with inexpensive packaging for your first go-around allows you to see what types of products are selling and which ones aren’t. Then, after getting that feedback, you can be confident that your capital investment in a packaging machine will be well worth it.
The easiest way to mitigate your packaging risk is using child-resistant packaging from the very beginning. This meets a national certification, and removes the gray area subjectivity from the regulatory agency. Most legislative requirements indicate this is one specification that will stay in constant compliance.
– Processing: Once you’ve got your branding figured out and you’re in full compliance, the next factors that will set you apart from your competition are pricing and operations. Packaging is the largest bottleneck in any cultivation/processing facility. If you can reduce the labor cost of packaging, you’ll be able to reduce the product cost to customers. The type of packaging has a direct impact on efficiency. Certain types of packaging can take twice as long as others to package flower, which impacts your bottom line.
Alen Nguyen is the CEO of Green Thumb Industries (www.greenthumbind.com), a B2B distribution company for the cannabis industry. He has a bachelor’s degree in electrical engineering from the University of Washington and a master’s degree in business administration from Embry-Riddle Aeronautical University. He can be reached at Alen@greenthumbind.com.