The global cannabis packaging market size was estimated to grow USD 3,534.2 million by 2030 from USD 620.2 million in 2021, growing at a CAGR of 24.3% from 2022 to 2030. The rising demand and use for medical and recreational cannabis products for consumption and the increasing legalization and certification of cannabis in various countries are likely to drive the global market of cannabis packaging.
The market was plagued with the non-uniformity of the legal status of cannabis around the world, due to which major packaging companies have stayed away from the market. However, larger packaging firms are entering the market with the increasing legalization. Berry Global was the major player that entered the cannabis packaging market in 2018, and the other major players are expected to enter the market with unprecedented growth. Currently, several players are operating in the studied market, like, Green Rush and JL Clarks.
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Moreover, the cannabis packaging market is still a maturing industry owing to the vast restrictions placed on the free distribution of cannabis. Canada was the first nation to fully legalize the growth, consumption, and sale of cannabis, with Uruguay, Georgia, and South Africa having similar but significantly more restrictive national legalization models in place.
Definition of Global Cannabis Packaging Market
Cannabis: Cannabis is a psychoactive medicine from the Cannabis plant, and cannabis is also known as marijuana. For centuries, the cannabis plant has been used for recreational and entheogenic purposes and in various traditional medicines.
Cannabis Packaging: The packaging market of cannabis deals with several rigid and flexible packaging formats, including child-proof containers, barrier bags, flexible films, amongst others. The demand of the packaging market is led by the consumption of packaging for recreational and medicinal purposes.
The COVID-19 pandemic has significantly impacted several industries causing ripples in the supply chain but has been beneficial for the growth of the studied market. Cannabis was labeled an “essential item” during the COVID-19 pandemic, which allowed its distribution even in lockdown. After government authorities in several regions deemed cannabis businesses as “essential” operations, states with legal medical or recreational stores were open amidst the pandemic owing to its status of operations. The continuous retail operations allowed growth in sales of cannabis which in turn created a positive impact on the packaging market.
In addition, the onset of 2020 has led to issues being faced by plastic manufacturers amidst the Coronavirus outbreak. For instance, as of March 2020, the British Plastics Federation (BPF) surveyed its members to depict the coronavirus pandemic impact on UK plastics manufacturing.
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During the pandemic, the increased demand for cannabis products has led to the geographic expansion of key players targeting the emerging set of customers. For instance, in April 2021, Her Highness, a luxury cannabis brand with operations in several states in the United States, announced expanding into Canada and other countries. The company stated that its strategic expansion addresses the increased demand during the pandemic era.
Cannabis has been grown, sold, and distributed through illegal channels for several years. The legalization of the product routed the sales through proper channels urging systematic governance in the sector. The legalized product distribution across countries has directly impacted the need for sophisticated packaging formats to enhance the brand image and extend shelf life, amongst other requirements.
Medical cannabis use has been legalized for several years in countries like the United States. But the legalization of cannabis in Canada and multiple states of the United States is driving the growth of the studied market. Canada has already legalized cannabis for medicinal and recreational purposes in 2018. The United States is fast catching up with several state governments legalizing the use in tandem with public pressure and curbing the illegal distribution of the product.
For instance, in Arizona, voters approved Proposition 207 in November 2020, which legalized cannabis for adult use. The state provided licenses to operators that enabled adults to buy cannabis 80 days after voters approved the initiative. The new legalization allows buyers to purchase a maximum amount of one ounce per transaction from regulated sources. There are 1 .37 dispensaries operational in Arizona per 100,000 people. The increased demand for the products is anticipated to drive retail sales.
The stringency of the regulations is anticipated to offer some degree of flexibility over the forecast period so as not to stifle innovation in the cannabis packaging industry but currently poses an immense challenge. Even with this recent legitimization of cannabis in several countries, several strict norms need to be followed for packaging cannabis products. For instance, according to regulations in the state of California, which were codified in Proposition 64, the law that legalized adult-use cannabis in the state, the packaging of cannabis was outlined with different requirements.
In addition to the labeling requirements, the law also provides directions for cannabis packaging sold in a dispensary in California. The requirements are listed below. Such rigorous practices have created a challenge for packaging solution providers to maintain compliance.
Furthermore, the cannabis packaging standards differ from country to country and from state to state in some instances. The lack of uniformization of regulations in countries like the United States, where state governments are actively legalizing marijuana, but the product continues to be illegal on a federal basis, has created immense confusion amongst cannabis vendors and their packaging suppliers.
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The cannabis packaging market has been categorized based on type, packaging material, and region.
The worldwide cannabis packaging market is segmented into rigid and flexible packaging based on type. The rigid packaging segment of the global cannabis packaging market held the largest market share of 78.2% in 2021. Rigid packaging comprises plastic bottles, glass bottle jars, and metal cans. While there are various material types used for cannabis packaging, plastic is the most common material used for cannabis packaging. Two major reasons involve product preservation and the strict cannabis packaging regulatory environment.
Another advancement that has significantly expanded cannabis packaging evolution is the use of airtight containers. Although plastic packaging is convenient storage, it does not completely keep cannabis airtight and fresh. Therefore, the need for airtight cannabis packaging arose quickly. This led to the invention of nitrogen-sealed cannabis packaging. The airtight cannabis packaging market continues to expand daily. A player such as JohnsByrne has been a significant player in the evolution of cannabis packaging. The EPIK LOK packaging solution's most significant advancement is 16CFR Part1700 tested and CR certified. EPIK LOK is an innovative CR packaging solution that provides cannabis companies with maximum surface area for aesthetic and decorative elements while guaranteeing the safety of children.
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Europe accounts for the fastest-growing region
North America, Asia-Pacific, Europe, South America, and the Middle East & Africa are the regions in which the worldwide cannabis packaging market has been categorized. Europe will have the highest CAGR of 25.5% in the global cannabis packaging market during the forecast period. The legalization of cannabis is accelerating in Europe, with several significant developments in the final quarter of 2020. The European Court of Justice decided in November 2020 that CBD is not a narcotic substance under EU law, paving the way for future CBD markets. A few weeks later, the United Nations finally acknowledged cannabis' medical potential by removing the plant and its derivatives from Schedule IV of the Single Convention on Narcotic Drugs, with all EU countries voting in favor except Hungary.
According to a study published in April 2020 on Pan European Networks Ltd, a European health website, researchers will conduct an anonymous survey of medical cannabis patients about their mental and physical health, as well as examine changes in patients' frequency of use of cannabis, dosage, and route of administration based on COVID-19-related closures and updates. As a result, the COVID-19 pandemic is predicted to provide significant market expansion potential.
The cannabis packaging market is mildly concentrated in nature with few numbers of global players operating in the market such as KushCo Holdings Inc., JL Clarks Inc., Kaya Packaging, Cannaline Cannabis Packaging Solutions, Dynapack, Diamond Packaging, Greenlane Holdings Inc., N2 Packaging Systems, Green Rush Packaging, Elevate Packaging Inc., and Berry Global Inc. Every company follows its business strategy to achieve the maximum market share.