LONDON--(BUSINESS WIRE)--Technavio market research analysts forecast the cannabis packaging market in North America to grow at a CAGR of more than 10% during the forecast period, according to their latest report.
The market study covers the present scenario and growth prospects of the cannabis packaging market in North America for 2017-2021. The report also lists rigid packaging and flexible packaging as the two major segments based on packaging type. The rigid packaging segment dominated the market with close to 62% of the market share in 2016.
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Technavio analysts highlight the following three market drivers that are contributing to the growth of the cannabis packaging market in North America:
- Growing cannabis sales
- Innovation of new product varieties
- Regulatory recommendations in cannabis packaging and labeling
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Growing cannabis sales
The North American cannabis market posted a 30% increase in revenue from the 2015 figures. This boom in the cannabis market is owing to the legalization of cannabis in several states which is bringing new users to the market. In Colorado, Washington, and Oregon, recreational use was legal before 2016, with the consumer spending on cannabis about 62% during 2015-2016. Seven US states legalized cannabis in some form on the Election Day.
The sudden popularity of alternative ingestion techniques, such as weed-laced topical sprays and edibles fueled the growth of the growing cannabis market in North America, thereby boosting the cannabis packaging market in North America.
Innovation of new product varieties
Legalization of cannabis products has widened the scope for innovation, with the consequence that new products are entering the market every day. Standing out as a brand has become more difficult. As with any new industry, it takes some time for users to become aware of and familiar with the brands and products available to them. This is true for patients seeking medical cannabis treatments and consumers interested in cannabis products for recreational use.
With the competitive landscape in the cannabis market in North America, suppliers need to stand apart and develop a loyal consumer base. Packaging can play a significant role in addressing the competition in the cannabis industry. Having a recognizable brand makes it easier to launch a new cannabis product successfully.
“If user trust and brand recognition have already been established, then a packaging that can make a new product easily identifiable is sure to make consumers more willing to try it in the first place. Therefore, innovation in terms of new product varieties and improved packaging will boost the cannabis market and, in turn, the cannabis packaging market in North America,” says Sharan Raj, a lead analyst at Technavio for packaging research.
Regulatory recommendations in cannabis packaging and labeling
The following states have legalized cannabis for medical and recreational use, namely, Washington, Oregon, Nevada, California, Alaska, Colorado, Massachusetts, and Maine. Some other states have also legalized cannabis chiefly for medical purposes. Although cannabis packaging labeling requirements are different in each state, there are a few common mandatory elements, which include listing of active ingredients, disclaimers and health warnings, identification of the strain and manufacturer and the date of cultivation of the cannabis.
“The major takeaway from examining cannabis labeling requirements in the US is that cannabis packaging should accurately describe the contents packed inside. If the product is for medical usage, the packaging itself must also prevent children from accessing the product packed inside,” says Sharan.
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