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    Features

    Cannabis Labels

    The advantages of digital printing align perfectly with the needs of this new and evolving market.

    Cannabis Labels
    Cannabis Labels
    New data released by The Freedonia Group shows the latest US cannabis packaging market trends and forecasts.
    Cannabis Labels
    USTL’s Canna Pack division produces a wide range of cannabis labels. For example, above, are labels for drinks.
    Cannabis Labels
    USTL’s Canna Pack division produces a wide range of cannabis labels. For example, above, are labels for pet products.
    Cannabis Labels
    USTL’s Canna Pack division produces a wide range of cannabis labels. For example, above, are labels for gummies.
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    Steve Katz, Editor11.15.19
    It seems the cannabis labeling market is not going up in smoke anytime soon. It’s here to stay, and with it comes opportunity.

    As of October 2019, 10 states in the US have passed laws to regulate cannabis like alcohol. They are: Alaska, California, Colorado, Illinois, Maine, Massachusetts, Michigan, Nevada, Oregon and Washington. All but Illinois were by ballot initiative. Currently, there are 27 other US states with bills to legalize pot, and Gallup polls show that two out of every three Americans now support legalizing marijuana. Furthermore, marijuana is now legal throughout the entire nation of Canada.

    Times have changed indeed. And what’s emerged from this new open-mindedness is a brand new labels and packaging market. Throughout most legal locations, there are dispensaries – literally stores that sell all kinds of cannabis products. Not only is the plant matter itself for sale, there are myriad other products, many of them food, such as assorted candies, gummies, cookies, honey, chocolates and even beverages. There are also vapes, pills, tinctures and other kinds of concentrates for smoking, vaporizing or ingesting. There are even topical cannabis products.

    What do these products have in common aside from containing cannabis? They all require labels and packaging! 

    This is not a small market, either. According to The Freedonia Group, demand for cannabis product packaging is anticipated to reach $278 million in 2019, increasing 31% per year to $1.1 billion in 2024. Primary and secondary containers, the firm says, will continue to account for the largest share of packaging demand at 62% of sales in 2024. These containers account for the bulk of unit packaging costs, as they must meet government regulations while also offering aesthetic and performance advantages.

    Demand for containers used to package cannabis products is expected to increase 34% annually from $156 million in 2019 to $670 million in 2024. All container types are anticipated to see extremely fast growth along with expansion in the marijuana and hemp industries: Jars and bottles – which together will account for 62% of sales gains – are versatile and see widespread use across nearly all cannabis delivery formats (e.g., flower, edibles, topicals), The Freedonia Group reports. Meanwhile, folding cartons, bags and pouches are expected to post very strong increases due to rapid gains in the popularity of edibles.

    Packaging suppliers will remain competitive, the Freedonia Group says, by offering containers that can support product differentiation – such as high-quality graphics and a premium image. Such containers include glass bottles, vials, metal tins and other containers.

    And these containers need labels. There are literally hundreds – perhaps thousands – of different strains of cannabis. Combine that with all of the different forms of products and their varying containers. Now add a host of legal requirements and more and more entrants into the space. What results is serious demand for not only lots of labels, but labels with variable information that’s often changing.

    With so many different strains and types of products, SKU proliferation is a huge consideration for cannabis labels and packaging.

    According to Steve Smith, president of all-digital custom product label provider Wizard Labels, “Digital printing is an ideal fit for the cannabis market – for up-and-coming brands as well as established brands. Digital printing’s cost-effective shorter runs and viable lower minimum order quantities enable our cannabis brand customers to order the quantities they need for each batch and SKU. Meanwhile, new entrants to the space can align the label quantities they need with the pace of growth of their business.”

    ‘In the shadow of the digital press’
    Label converters with digital capabities are a great fit for cannabis. Many new players in the market are brand new to the world of buying labels. So, also a great fit is a converter with a specialized, dedicated cannabis division. One such converter is St. Louis-based US Tape & Label (USTL), who earlier this year launched its Canna Pack division. L&NW recently caught up with USTL’s Canna Pack director Jim Benetin, who talked about how the launch of the division, as well as the latest cannabis market trends, challenges and considerations.

    L&NW: How did the new Canna Pack venture come about, and how is the new division performing thus far?
    Jim Benetin (JB): We had picked up a few cannabis clients through organic growth through existing sales channels and contacts. I have been a long-time watcher of the market and have been in printing for almost 30 years now. When Missouri passed medical cannabis in 2018, it was kind of my “ah-ha” moment. I attended the MoCanTrade show in early 2019 and from there I did a lot of homework. I gathered my information – and plenty of guts. Until this point, I had been an art director in prepress for 25+ years. I approached the management team here and made the case for us to spearhead a push into the market. I laid out my plan and it was green-lit. How great is that – one of the oldest label converters in the country pushing into the newest market?

    So far the initiative is going well. It has taken some time to figure out the right mix and point-of-contact at the various business levels. We have a good feel for the market now, and we have several successful trade shows behind us. We feel that we know much more than we did six months ago. You always want to do more, bigger and better, but slow and steady wins the race.

    L&NW: How would you assess the state of the cannabis label market? 
    JB: I think the market is young and very strong, with a huge climb ahead before we get close to the plateau. The sheer number of new products and businesses entering the market is staggering. Because of the lack of centralized regulatory oversight like the FDA or USDA, I think there will be a “Wild West” vibe to the labeling and packaging part of it for quite some time yet. It think it is an incredibly exciting time to be in the sector.

    L&NW: What are some of the labeling trends you’re noticing among your Canna Pack customers in terms of graphics?  
    JB: The comment I hear more often than not from the market is that hey want that “Top Shelf,” unique look. Special decorations, special applications, containers, custom pouches, special boxes…the list goes on and on. I think this is very indicative of a market that is in flux. Because the cannabis market has come of age in the era of digital-printing, the opportunities are almost endless. The various manufacturers no longer have to keep the same look across the board. I see variations in different states – and even different locations within those same states can have unique looks all their own.

    L&NW: Are there certain label materials that are a better fit for cannabis?
    JB: I see a lot of activity on both ends of the spectrum. On the higher-end, I see a lot of foils and specialty coating to give that flash and pop. Rotary screen, special effect coatings and foils and such are popular. While they all look great, they add a lot of cost to the package and are not particularly eco-friendly. On the other end of the scale, I see a lot of traction building for a more natural, organic look. We are fielding more and more calls about recyclable and eco-friendly options to the canna market. Kylee Guenther, CEO of Pivot Materials, showed me a statistic that it can take something like 30+ grams of plastic to package a single gram of cannabis. That’s sobering.

    L&NW: What printing and finishing processes are a good fit for cannabis? How are cannabis brands benefiting from digital printing? 
    JB: Basically, anything and everything digital is a great fit for cannabis. This market has come of age in the shadow of the digital press. I run almost no canna-product on a conventional press. To a printing company, that could be very scary. Learning how to embrace and really leverage that digital asset is the key. I have had conversations with brand owners about on-demand printing. Those kinds of innovations are only possible through the digital assets. I see a lot of specialty effects; doming, color shifting, glow-in-the-dark, you name it. I think as the market matures these will taper off a little just because of economics.

    L&NW: Do the various legal requirements and regulations with cannabis labels present a design challenge?
    JB: In short, yes. Heck, YES! We are talking about 30-odd different states (I think the current number is 33 plus Washington DC), and their respective regulatory agencies all define the same 1 gram extract 30-something different ways. All with different requirements and specifications. Getting all the regulatory requirements onto the label or package is just the beginning. Now throw in some state-mandated revisions, versioning on top of normal manufacturing revisions, and you have a real potential for headaches and production interruptions.

    L&NW: Are there any other notable challenges when it comes to the cannabis labeling market? If so, how are they overcome?
    JB: I think the one that caught me by surprise the most was banking. It is such a fundamental of business that you forget about it. From reading and following the market for some time, I was aware of the banking issues but it still did not sink in. That is, until you’re at a trade show and clients are wanting to buy application equipment for cash, on the spot.

    Needless to say it requires some thought and planning. The best way to overcome the issue is to remember – be flexible. Cards are going to get canceled, banks will refuse transfers, that’s a given. You’re going to have to be fluid if you are going to participate in the market.

    L&NW: What does the future hold for cannabis packaging?
    JB: I see a lot more innovation coming in the form of engineered materials. Bio-plastics and bio-polymers, enhanced resins that add hemp, bamboo and other plant fibers (I think) will be more sought-after. The big question is what is the status of the market going to be from the federal regulatory standpoint. The train has left the station, and I think federal recognition is coming sooner rather than later. The SAFE banking act (H.R. 1595) is evidence of that.
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