Packaging prospects cropping up quickly for cannabis uses

ANAHEIM, Calif.—With the number of cities and states allowing medical and recreational uses of cannabis growing like weeds, opportunities to do business in this emerging market are cropping up for plastic, rubber and silicone packaging and mold producers.

Forty-seven states—all but South Dakota, Nebraska, and Idaho—have some legislation allowing legal medical cannabis use.

And this year, Illinois became the 11th state to legalize the use of recreational marijuana, joining Alaska, California, Colorado, Massachusetts, Maine, Michigan, Nevada, Oregon, Vermont, Washington and the District of Columbia.

Another 13 states have ballot measures going before voters who will decide in the coming months whether to allow medical and recreational uses of cannabis.

High times—or not, if it's a product infused with cannabidiol (CBD) and not tetrahydrocannabinol (THC)—are here or likely on the way.

All those buds, oils, edibles, smokeables and topical ointments need to be in containers that preserve THC levels, prevent mold, have child-resistant closures and stand out on shelves of dispensaries. It's good news for the cannabis packaging market. Currently worth an estimated $12 billion, demand for vials, bottles, medicine droppers, rubber gaskets, zip-locking bags and the like is expected to almost double to $20 billion by 2025.

The forecast comes from New York-based Zion Market Research, which said cannabis industry sales of flexible and rigid packaging is growing at a compounded annual rate of 7.1 percent.

The need for rubber, silicone and plastic parts is growing, too, according to Edward Cook, product marketing manager for Union, N.J.-based O. Berk Co., a distributor of glass and plastic containers and closures that said it has one of the largest glass and plastics manufacturing networks in the industry.

Cook pointed to a plastic bottle with a thermoplastic elastomer (TPE) child-resistant cap as he prepared O. Berk's booth for North America's first Cannabis Packaging Summit at the Anaheim Convention Center earlier this year.

"We've learned from our manufacturing partners that low-durometer TPE helps enhance grip for better overall consumer experience," Cook told Rubber & Plastics News. "This is especially helpful to those in the senior community that may have decreased dexterity when removing closures."

Even though the closure shouldn't be a challenge for seniors, it should for children. Cook said the closure has undergone rigorous industry and national standards to be considered child-resistant.

"Most closures that you will find paired with our wide-mouth jars are your standard text-top or pictorial top push down and turn child-resistant closures," he said.

The cannabis industry is using a lot of TPEs and polypropylene caps, both of which are recyclable, as well as straight-sided PET jars, amber and flint glass jars, PP vials for vape cartridges, and innovative PP CRC sprayers with button-lock technology for oral and topical dosing, Cook said.

"The biggest takeaway is that all materials mentioned are recyclable," he added. "These materials are gradually finding their way in repurposed plastics to be utilized again in the manufacturing of post-consumer resins for package manufacturing."

No FDA guidelines
The Plastics Industry Association helped develop the packaging standards set by the Food and Drug Administration. However, there's one big wrinkle when it comes to medicinal and recreational cannabis, according to Tony Radoszewski, president and CEO of the Washington-based trade group.

"The challenge with cannabis and its derivatives is there are no FDA guidelines because it's not recognized by the FDA," Radoszewski said during a panel talk at the summit. "My guidance is to use the best practices that the FDA already recognizes. That'll be your safest step forward."

While cannabis still is considered an illegal substance at the federal level, the FDA has approved one CBD product as a prescription drug to treat two rare, severe forms of epilepsy. For everything else, the agency said it has reservations about the limited data on CBD safety and products of unknown quality being marketed with unproven medical claims.

Still, cannabis is used by many patients to reduce vomiting and nausea during chemotherapy, improve appetite loss from HIV/AIDS, and reduce chronic pain and muscle spasms.

At dispensaries, products with CBD and THC also are promoted as helping people sleep or get active as well as handle stress and anxiety.

The growing demographic for the industry is the 55-and-older age group, according to Christopher Coggan, head of the California Cannabis Industry Association, who also spoke on the summit panel.

"These people are going from taking a handful of pills to having a few gummy bears whether its CBD or THC," Coggan said. "They're really embracing the notion of this holistic approach and they're abandoning pharmaceuticals."

He expects a surge in demand for custom molds in food-grade rubbers and silicones to produce a variety of CBD- or THC-infused shapes for gummies, candy and baked goods.

"All these manufacturers of edibles need trays for their confections, and they buy a lot," he said.

Coggan also is CEO of Therapy Tonics & Provisions, a cannabis-infused beverage company based in San Diego. The company website said it offers healthy alternatives to traditional ways of consuming marijuana for medical and therapeutic purposes, such as craft kinds of coffees, teas and juices.

The products are all vegan, all non-GMO (genetically modified organisms) and have all organic ingredients but don't claim the latter, Coggan said.

"An organic certification is federal and cannabis is a Schedule 1 narcotic," he noted.

Other issues
In addition to the lack of federal regulations, Coggan said ever-changing state rules have forced him to redesign packaging many times.

"Ultimately, right now there's not a lot of clarity in California regulations from my perspective as someone who uses and designs packaging," Coggan said. "There are things about primary panels and where information needs to appear. Clearly, we know how big the fonts need to be and what regulatory information needs to be on every package."

However, there are a lot of variables, Coggan said, pointing to a tincture bottle used for one of his company products that ended up being too small to meet state regulations until secondary packaging was used.

"It's almost like a cigarette box," Coggan said. "That wasn't a cheap project."

Another time, he had an issue with medicine droppers made in China that leaked.

"One of the options was a rubber stopper in the bottle and a dropper on the side, so when they shipped and sat on the shelf, the dropper wasn't a potential source of quality control issues," Coggan said.

His company doesn't go with the most affordable fix, Coggan also said, noting the aesthetics of the package are key to branding.

"We're not thinking cheap. We're thinking what's going to get that shelf real estate and really stand out amongst the competitors," Coggan said. "Over the last four years, our investment in packaging has probably increased by a factor of 100 percent. We're willing to spend twice as much as we used to because we need to stand out on the shelf."

By Coggan's count, about 37 percent of California municipalities allow cannabis activity, which means about two-thirds don't allow sales and may try to block delivery. That puts shelf space at a premium.

"I think, at this point, there is just over 600 dispensaries in the state of California that are licensed," Coggan said. "We're seeing dispensaries charging shelfing fees now that are exorbitant—10 percent of sales or $3,000 a month, whichever is more, for 2-4 feet of shelf space."

In response, Therapy Tonics & Provisions, borrowed from the Red Bull playbook and invested in point-of-sale fridges.

"That's how we address shelf space—we provide the shelf space," Coggan said.

As products find their ways to shelves, fridges and consumers, Radoszewski said it's also time to keep the emerging industry's needs before state and federal officials.

"Make friends with your regulators first because it will save you headaches later," Radoszewski said. "We're in the wild west of packaging right now and there's a lot of lack of direction. Take a leadership role. Use your associations to be your voice and work with regulators."