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.
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.
“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
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.
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
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.”
Read in full: Cashing in on the Cannabis Craze – written exclusively for Printing News
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