How Legal Cannabis Will Revolutionize the Consumer-Packaged Goods (CPG) Industry

The legal cannabis industry is rapidly growing, and companies are investing in cannabis packaging machinery to keep up with demand. As legalization spreads, packaging regulations like proper labeling, child-resistant closures, and tight weight tolerances become more critical.

Fremont, CA: Legal cannabis products are expected to become the most significant growing consumer packaged goods (CPG) segment in the U.S., causing substantial business landscape changes, and many are already beginning.

These are the six things that will change in the CPG industry.

The Effect of Substitution

Cannabis is a significant competitor for packaged goods like alcohol, nicotine, and pain relievers, with 41% of American adults considering it for smoking cessation. The pharmaceutical industry, primarily OTC pain relief products, will be heavily impacted, with 35% of consumers considering cannabis. The opioid crisis is being reduced by replacing addictive drugs with medical cannabis products. Colorado is the third state to allow doctors to recommend medical marijuana for opioid-prescribed conditions. Manufacturers must diversify to avoid losses and capitalize on revenue streams with cannabis-infused or cannabis-adjacent products.

The Push for Automation

The legal cannabis industry is rapidly growing, and companies are investing in cannabis packaging machinery to keep up with demand. As legalization spreads, packaging regulations like proper labeling, child-resistant closures, and tight weight tolerances become more critical. Advanced packaging techniques, such as ease, speed, repeatability, and high accuracy, make this equipment more attractive to growing cannabis companies. Viking Masek, a company that sold more cannabis packaging systems in 2019, saw interest in cannabis packaging machines increase by nearly 110% from 2017 to 2019. The company expects demand to continue growing.

A Perk for Packaged Food

The increased appetite caused by THC consumption has become a legitimate driving market force, with growth rates for candy and snacks rising faster in legal cannabis areas than in unlegal ones. Demand for cannabis and CBD-infused edible snack products is increasing, as "eating your cannabis" is considered safer and more discreet than smoking. As legalization continues, demand for packaged snack foods is expected to rise, whether consumers snack on their cannabis or because of it.

Cannabis Contract Packagers Are Growing

Contract packagers provide packaging services for hire when businesses need more internal capabilities or resources to package their products in-house. PMMI's 2020 Cannabis Market Report suggests that more significant cannabis industry players are acquiring the capacity and expertise to offer contracting services. Contract packagers of cannabis edibles may become as indispensable as co-packers in the CPG industry.

Marijuana packaging matures (and becomes more flexible)

Cannabis packaging has evolved since legalization, with legal consumers demanding sophisticated, safe products. Cannabis edibles lead the way with flexible stand-up pouches for small-batch convenience and a child-resistant closure. These pouches combine looks, practicality, and safety.