The increasing legalisation of cannabis products across North America is creating a huge opportunity for brands and converters, but its packaging is not without obstacles. Steven Pacitti reviews the current state of play
The gradual legalisation in the US of cannabis for medical and recreational purposes has created its fair share of headlines, not least at the Pack Expo exhibition in Las Vegas late last year, but the variability of regulation/legislation across states has created a problematic smokescreen for packaging converters and brands.
It is easy to see why the cannabis market is an attractive proposition to those involved in the packaging industry, as it is growing rapidly with some estimates claiming that the current market in the US is worth $7 billion a year with potential to reach between $17bn and $24bn (depending on your source) by 2020. To put this into proportion, the natural cheese market is currently worth $12bn.
According to a recent report by the PMMI, packaging sales are less than one per cent of product sales, or $15 million at present, and that is projected to grow at a faster rate as legalisation, regulation, and brand customisation continues to spread through the marketplace.
There are roughly 30 US states that have legalised cannabis in some capacity for either medical or recreational use. Meanwhile, in neighbouring Canada, recreational use remains illegal but Canadians still spent nearly $6bn on cannabis last year according to Statistics Canada. It is believed that recreational use will be legalised in the country before the end of 2018.
To take those impressive figures even further, market analyst firm Grand View Research has projected that the global medical cannabis market will achieve a value of $55.8bn by 2025. Indeed, medical cannabis companies in Canada are already thought to be eyeing up countries in Europe like Germany, in addition to Mexico and Australia, as they target international growth in the sector. Touching on Europe for a second, The Netherlands decriminalised cannabis for personal use many years back, although enforcement was extremely lenient even before then.
While these statistics are sobering enough, it is blatantly obvious that the only way is up for the cannabis industry, and therefore we can expect an influx of new suppliers to the market.
However, such a divergent approach to legalisation across states is presenting a number of challenges, not least to those product manufacturers now facing stricter regulations on both state and local level. Regulators have been particularly burdened by the challenge of making cannabis accessible to adults but inaccessible to children, especially as the product comes in many forms, such as inhalants and edible formats that resemble sweets or cookies. If used improperly, cannabis could be harmful and indirectly lead to lethal consequences.
Notably, California was the first state to legalise medical cannabis more than 20 years ago, while Colorado became the first to legalise recreational use of the product in 2014. The latter has regulations in place that require packaging to be tested and certified to the federal child-resistant (CR) requirements, including opacity, and a CR closure if the product contains multiple servings.
When Colorado legalised it, the state required that all products purchased were placed in a child-resistant container at point-of-sale, which initially led to what is now known as an ‘exit bag’. The exit bag continues to evolve, but there is also much more product branding, customisation and the early footprints of automation. This changes the conversation more toward primary packaging, rather than secondary, so early flexible innovators like US-based Presto Products Company’s will support those efforts with CR closures moving forward.
But as more states follow suit, and the pace of legalisation reaches almost breakneck speed – nearly 60 per cent of the country has now legalised it – regulations are struggling to keep apace, and the laws differ from state-to-state. It is clear that packaging – and packaging producers – need to take some kind of lead here. And change is afoot, it would seem, as industry group The National Association of Cannabis Businesses (NACB) recently proposed cannabis industry standards for packaging and labelling, in an attempt to get everyone singing from the same hymn sheet.
The proposed standards include labelling that indicates the cannabis product’s origin and processor, methods for listing all ingredients present in the product, warning statements about the health risks associated with cannabis consumption, inclusion of major food allergen warnings, child-resistant packaging, and the avoidance of packaging and labelling that appeal to minors.
The last two standards would seem to be the focal point at the present time, as regulators seek to weed out the potential for some fatal errors as various cannabis-based products hit the market.
Speaking to Plastics in Packaging, Todd Meussling, senior manager for market development at Presto Products Company, said that at this point the NACB has submitted a draft of standards for cannabis packaging and labelling and is encouraging review and feedback. He says that from a packaging perspective modifications are needed, but he applauds the work that is being put forward.
“My view is that industry-based organisations like NACB, F.O.C.U.S. (Foundation of Cannabis Unified Standards) and Americans for Safe Access, play an important role in establishing a landscape for this market’s long-term viability. F.O.C.U.S., for example, is working towards an A.S.T.M. adopted guideline that would offer a reference for standardisation and compliance. According to a Gallup poll, US public support of the legalisation of cannabis is about 64 per cent compared to 39 per cent ten years ago. We wouldn’t see a trend like this without concerted efforts by these groups to move the market forward responsibly and safely for the consumer.”
To be fair, the packaging element has come a long way from the popular cultural images of cannabis plant being supplied in unsealed transparent plastics bags/pouches, and considerable work is being done behind the scenes. Some examples of packaging innovation recently seen in the sector include CannaStrips, which has produced sub-lingual strips of medical cannabis that dissolve on the tongue and are sold in individual flexible plastics-based packs that feature tear-strips, and the Kush Canister by Kush Bottles, which safely and securely stores cannabis products for resale purposes. The latter is FDA-approved and has a certified child-resistant push-top to comply with those states where relevant regulations exist.
As standardisation takes hold, packaging companies will need to automate as different categories begin to open up in the sector.
Whilst a simple online search will present a wide range of rigid plastics container distributors for the cannabis product market, there are also formats in the field of play that are based on cartons or glass, although on the retail side in the US it is primarily plastics; flexible pouches along with blow moulded or injection mould containers, blister packs, and some thermoforming.
One thing is probably for certain when it comes to cannabis packaging, and that is that we can expect change on a regular basis as regulations and demands transition. And as is the case with most products, cannabis will degrade over time when exposed to air and moisture, so whether it’s flower or concentrate, converters and brands are trying to find ways to preserve the product.
One company providing a solution to this end is Idaho-based N2 Packaging Systems, which supplies a steel can with ring-pull end and a snap-on plastics lid for recloseability. After filling the cans with cannabis product, a liquid-dosing unit adds a small amount of nitrogen to replace oxygen in the can by anything up to 25 per cent, extending the shelf-life.
The patented plastics lid meets the CPSC 16 CFR Part 1700.20 requirements, with certification taking about 10 months to acquire. It is a two-piece design, with one element attaching to the seam of the can and the other rotating to line up arrows that will release the lid from the can.
The plastics element supplied by N2 can either be child-resistant or a standard over-cap. The company also provides plastics cans for those who wish to see the product. However, chief executive Scott Martin does not expect them to have wide appeal.
He told Plastics in Packaging: “This is not the preferred method of packaging as it impedes some of the benefits of using the nitrogen and steel cans. I don’t believe plastics cans will be a long-term option for clients as more states are requiring opaque packaging. All lids are plastics.”
The role of the nitrogen should not be understated. Although air and light are essential for life, Martin calls them the enemy of cannabis.
“Oxygen in the air promotes the growth of yeast, mould and bacteria, none of which you want to smoke. Exposure also leads to oxidation, which degrades both freshness and flavour. Bags and jars block out some of the oxygen, but the N2 canning process takes freshness a giant step further,” he continued. “As an inert gas, nitrogen has very low chemical activity, thereby significantly reduces oxidation inside the packaging. The packaging remains air-tight until you pop the top and get an aromatic burst of ripe, harvest-fresh, perfectly cured bud.”
The air-tight packaging is odourless and the rigid can protects the flowers from crushing. The majority of N2’s packaging partners are utilising the process for flower cannabis products only, he says, although the company will conduct a shelf-life stability study on oils in the second quarter of 2018 as it sees more of the market shifting that way.
“We currently package throughout the US and in Canada but we are receiving requests internationally. We expect to finalise contracts and announce operations in some additional countries soon.”
Meanwhile, the Fresh-Lock business at Wisconsin-based Presto learned of the needs of the cannabis market in 2014 after introducing the child-resistant Child-Guard slider zipper for household cleaner applications.
The closure was specifically developed for commercial flexible applications requiring child safety. The slider is polypropylene-based and the track consists of a polyolefin blend. The components are designed to be utilised in both pre-made pouch and form, fill and seal applications using Presto’s applicator equipment technology. Fresh-Lock also produces an extensive line of press-to-close zipper solutions for applications that do not require child resistance. These are also polyolefin.
As Todd Meussling said in a public interview conducted at Pack Expo Las Vegas, “Think about delivering a pharmaceutical type product in a cookie form”. He said that packaging companies know how to package cookies but never before have they been asked to make cookies child-resistant, so the challenge is to mix the two elements. But the prize at the end is potentially beneficial for everyone.
The release of Child-Guard, for example, provided a commercially efficient way to replace the traditional, but limited, package options at the time. These were packs such as glass vials, jars and cans. Child-Guard was actually commercialised for liquid laundry packs, which is another product that has faced media attention in recent times when it comes to making them non-attractive to children, and child safe. The hallmark of Child-Guard is to offer a reclosable ‘doorway’ from which a child-resistant film structure can be tested as a pouch according to CFR-16, Part 1700 of the Poison Prevention Packaging Act.
Meussling added that the cannabis market reached out to Presto in the early stages of Child-Guard, to the extent that it became almost a test market for the product.
When it comes to the muddy issue of regulation, Meussling commented that states that have legalised cannabis will definitely have requirements for licensing. Many of the legislations are attempting to emulate federal requirements currently used for other products. Essentially, states are saying that they want to meet the code of federal regulations (CFR) criteria as part of its state requirement, which is the right way to approach the matter.
While the growth figures illustrate the vast potential for profit, there will still be challenges, not least the stigma of perception. For some growers of marijuana, the challenge is talking to potential suppliers of packaging who are fazed by working with a cannabis company. Sometimes, it is not simply about the packaging, but whether the individual perceives the product as legal or not, and whether the company wants to be associated with it.
The NACB has this situation in mind with its latest programme aimed at ancillary businesses (such as packaging companies), which Howard Schacter, chief communications officer at NACB, says will help to distinguish businesses wishing to sell in cannabis companies as trustworthy.
He told Plastics in Packaging: “We will be offering the opportunity to fully vet and evaluate them as operating ethically and responsibly. This will be of great benefit to them but also to our members and the broader cannabis community, helping them to discern what partners are solid candidates to consider working with.
“Right now we are in the information-sharing stage for the NACB Blue Ribbon Affiliate Program but will soon turn on the service.”
Kush Bottles, meanwhile, is well known in the cannabis market; the Californian company was founded in 2010 with the objective to help entrepreneurs entering the cannabis industry overcome the many barriers to entry. It sells mainly to dispensaries and distributors and its products are bags, tubes, containers and vapourisers.
While Kush has a patent on the child-resistant mechanism on its tubes, it also has a history of acquisitions in its short lifetime. It purchased its exclusive Colorado distributor Dank Bottles in 2015, and followed that last year by buying CMP Wellness and Roll-Uh-Bowl. Its presence in every US cannabis market probably explains why it has such a large customer base, with more than 4,000 different customers appearing in its latest financial report.
Although a lot is being done by eager converters to satiate the demand for cannabis product packaging, there is an element of anticipation involved insofar as future legal requirements impacting the cannabis market are concerned. Regulations and standards, such as those being pushed out by Colorado, will come and child-resistant cannabis containers will need to be the focal point for converters and growers.
Meussling concludes: “Rigid and flexibles both have a role in packaging for this market. Availability of generic container options (with and without child-resistant closures) were initially more prevalent in rigid than in flexibles, and rigid will continue to be the primary choice for applications where physical protection of the product is critical. Like many markets, we continue to see flexibles increase in format share across many product types due to the benefits that flexibles offer. There is no doubt that this will continue in cannabis.”
When it comes to child-resistant packaging, Meussling adds that members of the US Consumer Products Safety Commission will tell you that there is no such thing as a child-proof, reclosable package.
“Given enough time, motivation, or skill, a child can get into almost anything,” he says. “A true child-resistant package is one that meets very specific testing requirements that have been in place for almost 50 years, and in turn will prevent the majority of children five years old or younger from getting into package for at least ten minutes. This allows the package to serve as a protective barrier between a potentially harmful product, and the child. The same package, however, must be accessible by a physically capable senior up to 70 years of age.”
The largest barrier for cannabis in the US has to be in establishing an industry on a state-by-state legalised basis when federal law does not support it. The impact of this trickles down to important factors like regulation oversight, financing, and even packaging. Child-safe packaging is a primary example.
“I see a large amount of packaging coming in from questionable, off-shore manufacturers. Many products make claims of child-resistance, and charge for that performance requirement, but are not properly certified by a domestic test agency and show no commitment towards responsible packaging. This in turn causes the dispensary to pay more for a product that is not truly child resistant according to CFR. Sourcing of this type is a short cut and adds liability risk to the cannabis company because they did not authenticate the package or the source,” said Meussling.
“I see products that are under packaged, over packaged, and poorly packaged. Frankly, if done properly, the cannabis market can learn from credible, value-added packagers, and packagers can enhance their portfolios and contribute to solving the packaging challenges this market faces.”
The days of the ‘glorified plastics bag’ when cannabis was illegal are numbered. What is required in today’s changing world are flexible and rigid packaging solutions that deliver product securely and safely to the consumer, extolling the medicinal and recreational virtues of the products to adults but without glorifying them to children. It is a challenge, but one that the packaging industry is more than capable of rising to.