The Global Cannabis Packaging Market is expected to witness a CAGR of 24.3% over the forecast period from 2021 to 2026. The cannabis packaging market is anticipated to witness notable growth in the next few years, owing to the rising demand for medical and recreational cannabis products for consumption. The increasing legalization of cannabis in various countries is likely to drive the future market.
- The recreational cannabis application is expected to drive the market in the future, as it has shown unprecedented growth in recent years. The Marijuana Business Daily reported flowers as the most preferred form of cannabis sold in the United States. The flower is packed in jars or flexible packaging bags.
- The rapid legalization of the consumption of cannabis in the United States and the existing free environment in Canada is anticipated to drive the ancillary demand for the packaging of cannabis. 36 out of 50 states in the United States allow patients to use medical cannabis with a proper prescription. The growth of the cannabis market in the North American region indicates that the region is expected to witness the rapid development of the studied market.
- The packaging of cannabis is the most crucial process, owing to various regulations imposed by different countries' governments across the world. For instance, medical cannabis is available in various forms, such as flowers or concentrates, extracted in oils, extracts, or edibles. This medical cannabis packaging is growing, thus boosting various companies to offer holistic solutions to its manufacturers.
- A notable trend in the cannabis packaging industry is to tap on the rising consumption of recreational cannabis amongst the younger population. Due to high brand saturation amongst cannabis players, the packaging plays a high role amongst smaller and emerging players to strengthen the brand image.
- The announcement of a nationwide lockdown during the COVID-19 outbreak sparked increased demand for cannabis products. Multiple retail stores registered havoc traffic from consumers as the general idea of stocking up cannabis products in fear of its scarcity took center stage. Relevant statistics suggest the high growth of retail sales of cannabis products in March of 2020, creating an ancillary demand for cannabis packaging products.
- The focus on sustainability, regulations, and branding has heavily impacted the packaging of cannabis and has facilitated the shift from traditional methods which relied on manual labor for processing and packaging to more sophisticated methodologies which involve automated machines. The incorporation of automation is slowly gaining traction in the cannabis packaging industry as the industry players become aware of the benefits of automating packaging processes. This is envisaged to become more popular with the standardization of the legal landscape of cannabis.
Key Market Trends
Plastic Packaging Holds a Significant Market Share
- Plastic packaging has been the preferred packaging option for different cannabis consumption forms, like tinctures, flowers, oils, patches, and pills. Plastic can meet the different challenges encountered by cannabis manufacturers.
- For multiple reasons, plastic is the most common material type utilized for cannabis packaging involving the strict cannabis packaging regulatory environment and product preservation. Firstly, cannabis is a perishable product, and plastic packaging considerably extends the shelf-life of perishable products. Second, it is significantly challenging to design child-resistant locking mechanisms utilizing sustainable materials. Every legal cannabis market needs some form of child-resistant packaging, whether it's the primary product-touching layer of packaging or the second layer of packaging, such as an exit bag.
- Cannabis-infused extracts, tinctures utilize plastic in the form of containers, droppers, and caps. When it comes to containers, plastic's low weight has been a driving factor for plastic containers. The containers used for packaging are very small and are sold in 15 to 30 ml sizes, due to which the manufacturers are not able to add regulatory information on the labels. The manufacturers usually have a carton-based secondary packaging in which the container is packaged with the pamphlet containing the required information. Similarly, droppers and closures are also manufactured using plastics.
- Bottles and closures made of high-density polyethylene (HDPE), low-density polyethylene (LDPE), polypropylene (PP), and polyethylene terephthalate (PET) have become widely accepted packaging options within the cannabis industry. Plastic bottles and closures offer a vast selection of products from which to choose. Additionally, some progressive plastic packaging manufacturers are actively working to provide alternatives to plastics made from fossil fuels instead of using resins produced from renewable resources like sugarcane. Planet-friendly options include HDPE Bioresin manufactured with sustainably sourced resin from sugarcane.
- Furthermore, the flexible pouches can meet the stringent regulations for packaging cannabis. The Chinese suppliers have been able to capture the flexible packaging market due to their low-cost offerings and the absence of major players. Like Amcor, players have abstained from this market due to the uneven legal landscape of the cannabis market.
North America Holds Significant Market Share
- North America is one of the major contributors to the worldwide cannabis industry. Growth in this region is attributed to the widespread adoption and farming of cannabis in countries such as the United States and Canada.
- The recent shift in the regulatory landscape has resulted in more people using medicinal cannabis to address conditions like chronic pain, depression, PTSD, social anxiety, cancer, multiple sclerosis, and epilepsy, all of which are linked to changing lifestyles. Furthermore, as a result of the implementation of these severe laws, suppliers must adhere to proper safety control methods and provide consumers with high-quality products, thus promoting market growth in this region.
- For instance, California's current regulations primarily allow that either the product must be in a child-resistant container or must be placed in a CR exit package. New regulations that took effect from January 2020 mandated that all the products must be in a certified child-resistant container. Moreover, the edible products must be in a child-resistant re-sealable package.
- Moreover, in January 2020, California's office of environmental health hazard assessment (OEHHA) approved listing "cannabis smoke" and THC as reproductive toxins under the proposition 65 and, in one year, the cannabis vendors in the state will need to label their products with a Prop 65 warning label.
The global cannabis packaging market is a highly consolidated market with few top players dominating the market's significant share. Some of the dominant players in the market are KushCo Holdings Inc., JL Clarks Inc., Kaya Packaging, Impak Corporation, Funksac LLC., Dixie Elixirs & Edibles, Pollen Gear LLC., among others. Some of the recent developments in the market are:
- Sep 2021 - Green Rush Packaging announced the availability of Grip' N Lock cannabis boxes. These boxes come in default small and large sizes and give the option to the customer to get them customized. Furthermore, the Green Rush Packaging Grip' N Lock cannabis storage boxes are 16 CFR 1700 certified. The Gloss box finishes also add water resistance to the packaging and also prevent the box's print designs from fading.
- Apr 2021 - Cannaline announced its new C-Class Jars. These jars are shorter and wider than the company's previous models, making it easier to stack and store them. These C-Class jars come in all the essential sizes, from 2oz to 5 oz., and customers can purchase them in matte black, matte white, and clear jars with lid options in matte or glossy black and matte or glossy white lids.
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1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2 RESEARCH METHODOLOGY
3 EXECUTIVE SUMMARY
4 MARKET INSIGHTS
4.1 Market Overview
4.2 Industry Attractiveness - Porter's Five Forces Analysis
4.2.1 Bargaining Power of Suppliers
4.2.2 Bargaining Power of Buyers
4.2.3 Threat of New Entrants
4.2.4 Threat of Substitute Products
4.2.5 Intensity of Competitive Rivalry
4.3 Industry Value Chain Analysis
4.4 Assessment of the Impact of COVID-19 on the market
5 MARKET DYNAMICS
5.1 Market Drivers
5.1.1 Rising Demand for Medical and Recreational Cannabis Products
5.1.2 Legalization of Cannabis in Various North American Countries
5.2 Market Restraints
5.2.1 Stringent Regulation Related to Cannabis Packaging
6 CANNABIS APPLICATIONS (QUALITATIVE ANALYSIS)
7 MARKET SEGMENTATION
7.1 By Type
7.1.1 Rigid Packaging
7.1.2 Flexible Packaging
7.2 By Packaging Materials
7.2.4 Cardboard Containers
7.3 By Geography
7.3.1 North America
7.3.3 Latin America
7.3.4 Rest of the World
8 KEY VENDOR PROFILES
8.1 KushCo Holdings Inc.
8.2 JL Clarks Inc.
8.3 Kaya Packaging
8.4 Cannaline Cannabis Packaging Solutions
8.6 Diamond Packaging
8.7 Greenlane Holdings Inc.
8.8 N2 Packaging Systems LLC
8.9 Green Rush Packaging
8.10 Elevate Packaging Inc.
8.11 Berry Global Inc.
9 INVESTMENT ANALYSIS
10 FUTURE OF THE MARKET
A selection of companies mentioned in this report includes:
- KushCo Holdings Inc.
- JL Clarks Inc.
- Kaya Packaging
- Cannaline Cannabis Packaging Solutions
- Diamond Packaging
- Greenlane Holdings Inc.
- N2 Packaging Systems LLC
- Green Rush Packaging
- Elevate Packaging Inc.
- Berry Global Inc.