Navigating Cannabis Industry and Regulations

Contract Packaging, General, Innovation, Preformed Pouches, Sustainable Packaging / January 7, 2019

The rapid expansion of the cannabis industry reflects the optimistic expectation that widespread adoption of the various derived products is all but certain. Even as laws constantly change and new regulations are developed, products, dispensaries, and even edible applications are popping up across the country—along with methods to deliver these products with quality, safety, and legality in mind. Anyone selling cannabis-based products—or looking to start—must navigate myriad government regulations, consumer demand, and a market subject to sudden changes.

Cannabis can be subject to regulations that overlap (particularly in production and packaging quality) with pharmaceuticals and the food and beverage industry, but the inconsistent legality of its purchase, use, and distribution means there are many more rules to stay on top of. While it may eventually enjoy a more consistent legal-but-highly-regulated status similar to alcohol and tobacco, currently rules can vary not only at the state level but by region. Federally, it’s still illegal to purchase marijuana for medicinal or recreational use, but enforcement was relaxed under the Obama administration making it easier for states to make their own legislation. The Trump administration has backtracked on that relaxed approach so there is greater risk of federal intervention. However, as more states legalize various uses for cannabis consumer demand has exploded and is on pace to near $25 billion by next year (up from just over $7 billion in 2016). Legal recreational dollars will account for nearly half of that market value (the remainder being medical).

Biggest Challenges

Jumping into the cannabis industry naturally poses a number of challenges beyond your average business model.

• Legislation and regulation: as discussed, the legal landscape is littered with pitfalls and landmines. They’re not insurmountable, but to be a successful entrepreneur in the space, it is critical to have a solid team of knowledgeable advisors who stay current on ever-changing rules—and who can also put potential investors at ease.
• Processing and production: from harvesting and cleaning, to testing and extraction of THC levels, to setting up tracking and RFID traceability, much is involved in production from seed to plant to end product—and many regulations kick in here too.
• Packaging effectiveness and compliance: beyond simply protecting the product and performing well on shelves, cannabis packaging has to meet the needs of several product types and is also subject to—use guessed it—extensive regulation.

The Rules of Cannabis Packaging

Packaging solutions are necessary for 3 categories of cannabis products: flowers, concentrates, and edibles. Concentrates like oils and waxes require glass or acrylic containers. Flowers and edibles can also be packaged in glass but they are great candidates for flexible packaging too.

Flowers need to be protected from crushing and maintain quality best in opaque smell-proof containers that are tamper-evident. Stand-up pouches are an ideal flexible packaging option.

Edibles come in a variety of shapes and sizes, but similar to flowers need to be tamper evident and accommodate either single- or multi-use.

While specific requirements vary, common regulations for all cannabis packaging are child-resistant, tamper-evident, resealable, and opaque—all features that can be met by flexible packaging.

Need to explore your options for cannabis product packaging? Give us a call or contact us!