Cashing in on the Cannabis Craze

Legalized cannabis has budded into a formidable industry, growing into a bigger and bigger market each year. In 2021, it was valued at nearly $11 billion, with CAGR projections of nearly 15% through 2030. The cannabis packaging market alone was worth half a billion USD in 2021 and is expected to reach over $1.6 billion by 2024.

Sparking this boom has been a shift in perspective – of both consumer and government. The sheer volume of cannabis research that now exists highlighting its benefits, has left consumers with a more positive, educated - and somewhat curious - mindset.

For example, StrainSheet from Strainprint, the leading medical cannabis data company out of Toronto, Canada, provides detailed insights for doctors, patients, cultivators, brands and researchers on how particular cannabis products have performed based on specific medical indications - like anxiety, muscle pain, headache, insomnia, PTSD flashbacks and arthritis.

Over the years, the cannabis market has matured significantly. Recreational use is now legal in 19 states, plus the District of Columbia; medical use is legal in 38 states, plus D.C., Puerto Rico and Guam. Supply chains and segments have emerged from cultivators who grow the product, to manufacturers of edibles and vapes, to distributors. Governments, recognizing the appetite of this new consumer mindset, are benefitting from the fact that legal cannabis is a tax revenue gold mine. Cannabis tax in California alone brought in over $1.3 billion during 2021.

Nonetheless, the industry – particularly the packaging side – has its share of challenges. Regulations are still evolving and changing.

For example, there are different packaging requirements for THC products and CBD products – the former must feature child-resistant packaging, while the latter does not, but is barred from making health claims on packaging materials.

“The government is trying to figure out how to regulate false health claims around CBD and is in the middle of a number of studies," said Kary Radestock, founder of Hippo Packaging, an agency dedicated to the Cannabis industry. "But it is still a bit of a gray area, and pretty much self-regulated at this point.” 

Budding Opportunity Driven by the Packaging Boom

A new generation of cannabis consumers and enthusiasts has opened the floodgates to consumption options that include edibles, beverages, topicals, vape cartridges, oils – and even pre-rolls. Brands, influencers and celebrities alike are jumping on the cannabis bandwagon and shattering stereotypes. Consumers are more educated than ever in the language of cannabis, having open and honest conversations around THC, CBD, strains, flowers, buds and more.

There is no McDonald’s of the cannabis industry (yet). This presents an opportunity for PSPs to take advantage of the unique packaging needs within this blooming industry. With so many options – and form factors – competition is fierce and plentiful; making the need to stand out critical. Packaging is one of the best ways to cut through the noise and get buyers’ attention, making it a revenue growth stream opportunity across the print industry.

The easier it is to create, produce and buy labels, flexible packaging, boxes and prototypes featuring embellishments, interactive elements and more, the easier it is for new brands and micro-brands to enter, stand out and capture a share of the cannabis market.

The Pandemic Effect

The numbers don’t lie. When lockdowns occurred in 2020, it changed consumer habits and behaviors. Food delivery and e-commerce – particularly retail e-commerce – exploded during the pandemic. We “skipped the dishes," ordered in, shopped, created and shared online, and embraced the Amazon experience.

Our online shopping habit blew up the small parcel market, which grew from 103 billion sent in 2019, to a projected growth of 220 to 262 billion packages by 2026. On top of this, web-to-print and web-to-pack technology has helped printers become more automated and streamlined, to better position themselves to sell boutique, personalized and highly customized solutions – which can be created and sold online - day or night.

One company cashing in on the e-commerce and cannabis craze trend is DMS Color. Their web-to-print Gold Leaf Packaging storefront is dedicated to the production of premium, enhanced collateral, packaging and branding for cannabis products.

Look, Touch, Buy

When packaging is specifically designed to make you want to touch it, you’re 62% more likely to buy it.

Whether we realize it or not, touch plays an important role in the buying decision process. It triggers an emotional response while simultaneously (and subconsciously) impacting sensory recall. In other words – if you can get the buyer to touch the packaging, the more they’ll remember the experience. And the longer they touch it, the more likely they will buy it.

When the pandemic deprived people of the ability to go into a store to physically see, smell and touch products – it forced brands to turn up the creative dial in an effort to grab visual attention amidst a sea of scrolls and swipes. The cannabis industry lit up with embellished packaging – be it gold debossing or holographic foil – as a way to radiate a premium look to consumers. With a premium look comes a willingness to pay a premium price; luxury packaging sells between 24% and 89% more than non-premium competition.

Prototyping

Because the cannabis industry is still in its early growth, a stream of new players and micro-brands are popping onto the scene looking to capitalize their share of shelf space. With limited budgets and resources, they’re investing in shorter runs, fast, affordable prototypes and the ability to stand out on the shelf – and the screen.

Over the past few years, advances in digital prototyping has led to decreased costs, which is especially appealing to micro-brands, start-ups and established brands testing new products and markets. For example, Virtual Packaging is a company that creates digital 3D packaging renders – saving printers (and brands) thousands of dollars between the initial printed prototype and the final approved sample. Printers can digitally render them for a fraction of the price while controlling costs and inventory.

Whether whitelisting services like these, or tackling them in-house, printers become incredibly attractive to Cannabis brands with short run, premium packaging needs – from printing directly on jars, to labels, boxes, flexible packaging, child-resistant boxes, point-of-sale materials and more.

Packaging is booming. The cannabis industry is budding.

Growth in the cannabis industry is explosive, and the packaging boom is further fueling the fire.

Both create opportunities for PSPs to position print and packaging into high-value, brand experiences that boost profit margins, instead of eroding bottom lines.

Use the power of touch to your advantage. These clients don’t care about how you make the magic happen and will likely tune out chatter around speeds, feeds, foils and run-rates. But watch their faces light up when you say things like, "People have to touch it when they see it," and "People will pay more for a product that’s packaged in something sexy."

About Joanne Gore

Joanne Gore, president of Joanne Gore Communications (JGC), is a B2B marketer who’s passionate about print. She has spent more than 25 years helping software, hardware, print and manufacturing companies around the world stretch their marketing dollars and attract a new generation of buyers with programs that generate awareness, engagement and growth. Follow Joanne on LinkedIn or email: [email protected]