What’s the Real Cost of Cannabis Packaging?
February 8, 2023
How much will my cannabis packaging cost? At AssurPack, we know that shoot-from-the-hip price estimates are rarely accurate. The answer is always more complicated.
In fact, per-piece price quotations don’t tell the whole story. That’s because the per-piece price of packaging usually isn’t the most important factor when you’re considering the total cost of your packaging. Depending on your situation, the production costs or shipping costs associated with your packaging will be more consequential. Other factors — like changes to your production floor — may come into play too.
In this post, we examine the real cost of cannabis packaging and explain the pricing dynamics you’re likely to encounter in the market. After reading, you’ll know what expenses to expect on your journey to better packaging, and what questions to ask your cannabis packaging supplier.
Cannabis Packaging is Different
The first thing to know about the cost of cannabis packaging is universal to the cannabis industry as a whole: it’s not like other industries. Regulations complicate the financial dynamics.
Child-Resistant Packaging and Opportunity Costs
For cannabis, one of the most important packaging considerations is child resistance. While this may not seem directly associated with the cost of packaging, non-child-resistant packaging can present a steep opportunity cost. If your packaging isn’t child-resistant, retailers are less likely to carry your products. The unsafe packaging creates a safety liability — even in markets that don’t require child-resistant packaging.
In other markets, depending on the local regulations, retailers may need to invest in child-resistant exit bags to sell products that lack child-resistant certification. Needless to say, if retailers need to change their whole operation to accommodate a new vendor, they’re likely to choose a different vendor — one who uses child-resistant packaging.
Regulations Impact the Benefits of Ordering Packaging in Bulk
Regulations also affect the cost benefits of large-volume pricing. Usually, when you’re ordering packaging, the more you buy, the more you save. But when regulators suddenly change the rules about what must be printed on the packaging, product manufacturers can be stuck with a large inventory of useless packaging.
In 2018, for example, Colorado regulators made a slight change to the text under the triangular THC symbol they require on infused-product packaging. The sudden switch left manufacturers with an inventory of non-compliant packaging. The trick, it seems, is to order packaging in quantities that allow a lower price point — without troublesome overstocking that creates exposure to regulatory change.
For companies operating in multiple states, local differences also impact bulk pricing. State labeling requirements vary, and you’ll likely need several versions of your packaging rather than one massive stockpile.
Why It Costs Less to Order Packaging in Bulk
The price of packaging is intrinsically linked to volume, and large orders are far cheaper than small orders because many of the expenditures occur upfront. They’re the same whether you buy 10 packages or 10,0000. So, increasing the number of units in the production run lowers the average cost per package. At Assurpack, we encourage our customers to purchase undecorated packages in bulk so that when regulations change and new labeling is required, they can still use their packaging inventory.
Cannabis Package Engineering
Design services for custom cannabis packaging naturally happen upfront, and they don’t vary with your order volume. While it’s tempting to cut costs on design, it’s critical to invest in quality design services and select quality packaging.
Cutting upfront costs by selecting poor quality packaging can cause your product to spoil on its way to the retailer, or degrade in quality as it sits on the shelf. Lost product is one of the heftiest packaging costs a company can incur. A stale product can damage your reputation too.
Package design is more than just graphics. Your packaging engineer will use specialized software (and know-how) to design the package and ensure its structural integrity, functionality, and child resistance. Prototypes and testing are part of this process.
Cannabis Packaging Equipment
Regardless of the order size, packaging and printing equipment will need to be configured for your package design. The packaging supplier will retool equipment with custom cutting dies based on the size and shape of your box. The printer will burn custom plates to apply the inks for your design.
The size of the machinery also affects the quote you’ll receive from your supplier. Smaller machinery requires less tooling and costs less to set up. Larger machines cost more, but when it comes to large orders, they may excel. Bigger presses can cut more packages per motion, making them faster and more productive.
The Total Cost of Cannabis Packaging
In actuality, the per-piece price of your packaging is the tip of the iceberg — regardless of your order size. Your choice of packaging will have financial effects on many aspects of your operations.
Changes in Cannabis Production Practices
Most notably, packaging changes how you produce your product. It gives rise to automation options — or it increases your labor costs by requiring extra steps. Adding a liner to a package, for example, will add time to your assembly metrics, but doing so may be well worth the increase in product quality.
Some package types — like AssurPack’s® AssurCard® — greatly speed up your production. AssurCard® is a blister pack that allows you to mold your edibles directly in the blisters. You can save a step by not having to transfer your product from its mold to its packaging or, you can invest in equipment that fills many cards at once for a massive decrease in production time.
You may also experience a slowdown in production when you implement new packaging systems. And if you bring in new equipment, you’ll need to invest time into training your employees. The learning curve is unavoidable, but your new packaging routine should ultimately accelerate your production — or yield greater revenue or profit.
Shipping and Transportation
Packaging that creates a large shipping expense will cost you hundreds or thousands of dollars over the course of a year, yet few manufacturers account for these costs.
Lightweight packaging and minimalist design reduce your shipping bill — both to and from your facility. Yet the shippability of your packaging doesn’t come down to simple weight alone; how the packaging fits in its shipping box matters a lot. You’ll want to find a design that ships to you efficiently and is convenient when packaged for delivery to retailers.
When you choose awkwardly shaped packaging, you may have the benefit of standing out on the shelf, but fitting your product into secondary packaging becomes more difficult. It’s a tradeoff. Another consideration with unusual or large packaging is how it affects retailers. Many of them report not wanting to shelf or store bulky packaging.
Equipment and Facilities
Your cannabis packaging equipment investment is widely variable. As with most equipment purchases, a large upfront investment allows you to scale your operation and save money on the backend. Often, however, you can delay the capital expenditures of in-house equipment until you’re ready to make the leap.
AssurPack’s packaging engineers can guide you toward a solution that matches your goals now and into the future. They can help you envision what your production floor will look like after you change packaging. It may be similar to your current layout, or you may need a different configuration that increases your efficiency.
You may also need more space in your facility, depending on your changes and if you’ll be stocking more materials. An increase in utilities is common if you’re implementing new, large equipment systems, and it’s an expense that’s usually overlooked.
Cut Costs, Not Corners
While it’s important to reduce your expenses, don’t forego product quality or marketability when selecting your packaging. Treat packaging as an investment. Many savvy business people cut corners on packaging to save money, only to find that they’ve left their product — or their business — vulnerable to damage.
Instead, you’ll want packaging that protects your product from the elements and keeps your customers safe. You’ll want packaging that appeals to consumers, packaging that increases the chances of new retailer relationships.
And most importantly, you’ll want to work with a packaging supplier who can help you with all those objectives and who sees your packaging design as an ongoing commitment to boost your business — not just a one-off job. Your designer should help you understand the holistic costs of packaging and how packaging integrates into your production.
If you’re assessing the cost of new packaging — or reassessing the cost of your current packaging — AssurPack® can help. We consult with product manufacturers to analyze their operations and find cost-efficient, best-in-class packaging solutions.
