Considering a the growing range of environmentally friendly options on the market, finding balance between ethics, marketability, and cost is easier than you may think.
With the growing availability (and decreasing cost) of locally sourced, plant based, and fully biodegradable options that were first developed for the food industry, sustainable packaging will likely become the gold standard in the ethically-focused cannabis market, even if it’s purely for the marketing benefit.
The cannabis industry is an interesting petri dish mixture of free market capitalism and eco-centric idealism. The big money from Silicon Valley, Canadian Pharma, New York hedge funds, and soon enough, Big Agriculture (think Monsanto Kush) is colliding with operations based on generational fundamentals like: organic farming, environmental stewardship, and growing boutique-quality product. The science and data that exposes efficiencies will be driver of many of the ‘big’ questions modern growers are trying to answer: LED vs. HPS, organic fertilizer vs. salts, solventless extraction vs. hydrocarbon, etc.
In the end, the bottom line is just that, and if you are yielding 20% more with salt fertilizer and selling it at the same price as organic, you’ll be hard-pressed to convince your investors that live-rosin is the way to go. However, if you can make the argument that organic product aligns more with your brand, will attract higher end customers, or will increase repeat purchases, you might get a lot less push back. Of course, if organic is cheaper to produce, sells for a higher price, or has an untapped market, the conversation will be even easier, but that’s where packaging and product diverge.
Honest Marijuana Co., based in Colorado, runs their farm with “zero waste and minimal draw on community or natural resources.” While their products certainly meet the mark for ethical standards, creating packaging that preserves the product, meets child safety guidelines, AND sustainability goals is exceedingly difficult, especially with margins taken into account.
Generally, more ‘ethical’ cannabis products are of higher quality. Moreover, consumers who prefer organic flower, solventless extracts, and natural ingredients in their edibles are willing to pay more for it. When it comes to cannabis packaging on the other hand, ethical doesn’t mean better. A biodegradable exit bag does the job just as well as a plastic one, and while consumers will generally pay more for ‘ethical’ cannabis, they might have a hard time with a $5 retail hike based on a switch to sustainable packaging. And this is why packaging is one of the first battles those old-school operators surrender to their investors… if you’re in the grower’s shoes, it’s just hard to see who benefits.
Of course, Mother Earth does. And likely, your marketing team would too. And so would your brand image. But would that be worth costs rising $1 or more per retail item? Likely not. But what if it was $0.20, or $0.05? Where is the line at which your commitment to your investors can be breached by your commitment to protecting the environment? For many reading, that line doesn’t exist. To the uber-capitalists, the cheaper, option, assuming it does the same job, is always better.
But in the cannabis industry, there will be pushback from within. The sheer proportion of companies with brands based on environmental friendliness, organics, or sustainability is far larger than most consumer markets, and I would argue that those morals are more foundational to the operators behind them than many of the organic food brands you might see on a store shelf. For many, organic cannabis is a way of life, and it’s been a way to preserve a connection to the Earth that many, (I'm looking at you, uber-capitalists) have lost.
You don’t have to participate in a developed, legal cannabis market for long to see the crazy amount of packaging consumed on a day to day basis. Additional mechanisms and layers created to meet child safety regulations can almost double the amount of plastic needed to package a given product. Exit and delivery bag requirements further exacerbate the problem, as a single product can end up with 4 or more layers between it and the consumer.
Mylar bags are the most commonly used packaging in the cannabis industry. While Chinese imports dominate dispensary shelves, USA-Made options can be equally affordable when import and duties are taken into account. Additionally, plant-based alternatives are becoming increasingly cost effective.
Up until a few years ago, the question of sustainable packaging was straightforward: Can we afford to switch to ethical options cost 3–4x than Asian imports? The answer was usually, “No.”
Now, the logic behind the question is more nuanced: "Does a 12% increase in packaging costs offset the marketing power of being able to brand our packaging as ‘100% Biodegradable?” or “If we spend $.035 more per unit to switch our 7g flower pouches to USA Made, would we see an increase in brand loyalty that would offset that cost?"
Obviously, the answers, like the questions themselves, are not so simple, especially for companies with branding based on their environmental ethics. However, there is a wide variety of of ‘sustainable’ packaging options on the market, with a wide range of prices, and while none of them will tick every ethical box, each small step counts toward the end goal of environmental preservation. In any case, from a marketing perspective, some of the more affordable ‘ethical’ options might have the same impact as the more costly ones.
For instance: a label that says ‘Packaging Made in the USA in a Wind Powered Facility’ might be as equally appealing to a consumer as one that says “100% Biodegradable Packaging,” but at 50% of the cost. Switching to ‘green’ packaging can mean a number of things, and making that switch means weighing all the variables I’ve outlined above, deciding which boxes to tick, and what is right for your brand.
Is it the high quality / low cost, Chinese import because your processing operation is entirely self funded, and every penny matters? Or would you choose the USA Made option, because your dispensaries are in blue collar farm communities, and your customers like to see the American flag on products they buy? Or are you a grower who has been in the business of organic farming and environmental stewardship for the past 20 years, and the fully biodegradable option isn’t just an option for your brand, its a necessity?
No matter what part of the industry you come from, or what values your brand is built on, no one can deny that the segment of the consumer market that does care about ethical packaging is growing.
Whatever the reason is that you may be exploring ethical options for your line of products, feel free to reach out to me via email at nrussell@pmc-sc.com, or via Instagram at @NateSaysDoLess.