Part I: Wasteful weed packaging is costing operators a fortune. Can it be fixed?
This is part one of two posts about product packaging in the era of cannabis reform and regulation. Today, we look at the booming cannabis packaging industry and the patchwork of state rules and requirements helping to drive it. On Friday, we’ll look at sustainability as a “megatrend” that crosses generations of consumers. We’ll also examine 17 companies and startups offering packaging solutions to the cannabis industry. -G.W. Schulz
Perhaps it doesn’t trouble you to imagine explaining to a precious child why beautiful Ariel The Little Mermaid had an empty vape cartridge stuck in her gullet and a medical-grade, child-resistant ziploc bag over her head when the life slowly drained from her body.
This is Oklahoma, after all. Know your audience. We’re indifferent to recycling at best and hostile to it at worst. The state’s long-serving Republican Sen. Jim Inhofe remains one of the most strident climate deniers in Congress.
So let’s consider the money instead. Excessive cannabis packaging fueled largely by over-eager state regulators and lawmakers but also by so-called “vanity packaging” is quickly becoming a booming industry at the expense of you and your customers.
The market for cannabis packaging reached an estimated $650 million in 2018 alone, according to the consulting and compliance firm Smithers. It’s expected to balloon from that already impressive number to $1.6 billion annually just three years from now.
Cannabis continues to be interpreted by bureaucrats and politicians as indistinguishable from the powerfully addictive prescription drugs that fueled the opioid crisis in Oklahoma and other states.
Of course, it wasn’t cannabis that caused 14,000 overdose deaths in 2019. But that matters little. Perception is everything. Pearl-clutching lawmakers and regulators here and elsewhere can’t resist continually proposing new and meticulous cannabis controls to protect the public’s health and well-being.
Perhaps nowhere is that more visible than in the packaging.
A trip to the dispensary in Oklahoma or any legal state these days means walking out with medical-grade packaging and containers, odor-proof exit bags with child resistance, bulky plastics, glass jars, heavy cardboards, foils and wraps, vape batteries and cartridges, and “doob tubes” for pre-rolls.
Astonishing volumes of it simply flows into landfills and oceans once the weed is gone. Much of that waste is made from nonrenewable resources and doesn’t readily biodegrade. It may also be exceedingly difficult to recycle.
Some cannabis packaging is so comically dense with materials that it seems capable of being used to construct barns, silos, or coffins that could last generations. One Obama-era EPA administrator called cannabis packaging “a major new universe of plastic waste.”
It’s common for containers to weigh more in plastics than the cannabis weighs inside them. One can make several purchases at an Oklahoma gun show and walk out with fewer packaging requirements.
To be sure, not all of this is the fault of lawmakers and bureaucrats. As cannabis becomes increasingly competitive and more celebrities and artists sign brand and sponsorship deals, the industry has witnessed a rise of vanity packaging seen in other industries like cosmetics and alcohol.
Either way, all of this packaging and the costs associated with it are mounting fast. Even if the waste doesn’t concern you all that much, consumers today across the spectrum from Boomers to Z Genners care more than ever about sustainability and love showing it off with their spending.
Can the trajectory of this be changed? If so, can one of the nation’s busiest cannabis markets help lead the way?
The big business of cannabis packaging
Just how big the cannabis packaging industry could get in the coming years is difficult to pin down with precision. The business world is awash in market analysis and intelligence firms selling steeply priced reports that promise all kinds of insights and competitive advantages. Such firms exist in every industry. Now they’re advancing on state-legal cannabis.
The forecast above from Smithers of $1.6 billion by 2024 is probably the closest to reality given that they’ve been involved in compliance consulting in the United States for decades. I’ve seen estimates elsewhere that are far higher but seem to be based on wild assumptions. One thing’s for certain, however. As Smithers writes: “Packaging regulations will change often and quickly.”
And that fact makes for major business opportunities. Two cannabis companies that don’t come into contact with cannabis at all announced in early March that they were merging in a deal worth over $400 million. KushCo Holdings of California sells opaque, child-resistant containers, tamper-evident labels, “barrier” bags, and packaging for pre-filled vape cartridges. The other company involved in the merger, Greenlane Holdings, sells packaging along with cannabis accessories like pipes and papers.
Another maker of cannabis packaging -- Advanced Container Technologies -- announced in late April that it was entering the Oklahoma market. The company’s patented “Medtainer” airtight container features an integrated grinder for cannabis flower. It was initially engineered to aid youth and elderly patients with breaking down traditional pharmaceutical medications. The company smartly pivoted the Medtainer to weed with exquisite timing.
For many businesses in the cannabis industry, high-grade plastics in particular are the most desirable and affordable for meeting regulations and moving product smoothly and safely day-to-day. It’s durable and lightweight. It seals tightly and enables longer shelf lives.
In highly competitive markets like Oklahoma, more costly packaging alternatives may simply not be viable. Cannabis businesses as it is face higher taxes and banking fees and an array of costly and complicated regulations not endured by other industries. As one cannabis consultant told Vice in 2019:
“A lot of operators are just trying to stay alive. Assume a new, environmentally friendly bottle costs fifty cents, and the traditional bottle only costs fifteen cents. When you’re just trying to keep the lights on, which one are you going to go with? Ninety-nine percent of the time, they’re going to go with the traditional bottle.”
But doing so comes with costs. One worried assemblywoman in New York State issued a memo last month after lawmakers and the governor there authorized adult use:
“The legal cannabis industry in the United States produces about 150 million tons of waste each year. Even when marijuana packaging is recycled at home, it is often sorted out by recyclers and taken to landfills. While no industry is blameless in the plastic-pollution crisis, New York has a unique opportunity to prevent a new source of plastic pollution as we consider the legalization of recreational marijuana.”
Not only that, loosening overly strict packaging requirements could pump oxygen into first-time cannabis entrepreneurs fighting to become viable themselves. One think tank that studied cannabis packaging regulations argued in an April report that allowing the reuse of high-grade exit bags could “reduce the financial impact for undercapitalized entrepreneurs where packaging costs can be a financial burden.”
Strict rules in Oklahoma and elsewhere
Much of the blame for packaging waste in cannabis falls squarely on state regulators and lawmakers who have the best intentions but not always the best ideas. The phrase “nanny state” is a pejorative sometimes used by conservative politicians to condemn evermore government bureaucracy created by liberals to maximize the health and well-being of the public.
Resisting the nanny state and perceived government overreach is a general guiding principle in conservative Oklahoma politics. That is until the discussion turns to substances or behaviors viewed as vice or deviance.
In exchange for the permission to end cannabis criminalization and prohibition, lawmakers and regulators from both major parties and in all states have continually dreamed up new ways to tax and regulate cannabis whether the taxes and regulations made sense or not.
Republicans and Democrats in statehouses around the nation have universally clutched their pearls and created a patchwork of state rules and regulations as cannabis reforms have progressed.
The state of Florida requires that edibles be individually packaged with plain, opaque wrapping. If containers are then used for the edibles, they, too, must be plain, white, and opaque, so the contents are not visible. No images or product depictions can be used on the container beyond a state-approved logo. Washington State has numerous required labeling disclosures including that cannabis may have health risks, may be habit forming, and may be unlawful outside the state.
Massachusetts and Oregon restrict packaging that’s too neon or brightly colored and could appear desirable to kids. Nevada and Washington specify the minimum allowed thickness for plastic containers. Maryland says that cannabis packaging must “be plain” and indicate that there “may be health risks associated with cannabis use.”
California once allowed dispensaries to choose if they wanted to use individualized child-resistant packaging or place multiple purchases in a single, compliant exit bag. Not any longer. As of early last year, every individual product must be in a child-resistant package.
Oklahoma, like other states, has no shortage of rules and restrictions for packaging, advertising, and labeling cannabis. The state’s cannabis laws articulate ground rules and then pass additional regulatory responsibilities for labeling and packaging over to the Oklahoma Medical Marijuana Authority.
Between these rules and laws, all retail cannabis and cannabis products in the state must generally be sold in child-resistant containers. That’s defined as packaging that is “designed or constructed to be significantly difficult for children under five years of age to open and not difficult for normal adults to use properly.”
The packaging must be opaque and maintain its child resistance after multiple openings. It must have a “contains THC” sticker affixed and indicate the THC and terpene potencies. According to Oklahoma cannabis regulators, it also must have labels reading:
“This product has been tested for contaminants.”
“Women should not use marijuana or medical marijuana products during pregnancy because of the risk of birth defects.”
“Keep out of reach of children.”
In addition to the above requirements, Oklahoma also spells out what cannabis is not permitted to do. Cannabis advertising, packaging, and labeling cannot:
Claim that cannabis has therapeutic, physical, or health benefits
Contain misleading, false, or deceptive messages
Violate federal trademark laws or regulations
Depict minors consuming cannabis
Use any design that’s obviously appealing to children
Contain objects such as toys, cartoons, cartoon characters, or similar images suggesting the presence of a child
State law further says that none of the required disclosure information may be substituted with available technologies like QR codes. If permitted, consumers could conveniently scan a QR code with their phones and not only view all required labels digitally, they could also check out the results of available quality and safety tests at the dispensary they’re visiting.
Some states and local communities are beginning to see the crisis of waste in cannabis and are taking steps to confront it. When New York State legalized adult-use cannabis in March, an assemblywoman there immediately followed up with another bill that would create a recycling program for cannabis packaging. Consumers would be incentivized by paying a deposit on packaging that they’d receive back after returning the empties for recycling.
In Colorado, consumers can return their plastic cannabis containers to select dispensaries to be recycled with help from the innovative cannabis recycler Green For Green. Others argue consumers should be permitted to reuse glass jars for cannabis the way craft beer enthusiasts around the nation already do with glass “growlers.”
Denver even issued the above list to cannabis consumers and businesses for better-understanding what types of common packaging could be recycled in the Denver area and what would likely need to be trashed. But not all cities and states have the same recycling rules and options.
Don’t forget to check your email inbox on Friday for part two. -G.W. Schulz
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