A report by Global Market Insights Inc. says the value of the Cannabis packaging industry will grow to more than $356.3 million by 2028. The published report shows cannabis industry packaging was worth $151 million in 2021, but it would progress at a CAGR of 11.7% starting 2022 to 2028. The report further provides details of the driving forces for the forecasted growth.
They include changing market trends, actionable strategies, competition, and new market opportunities. There is an increase in awareness of the benefits of medical cannabis and the production of more cannabis strains. Cannabis is now available in a variety of forms, including edibles, vapes, and joints.
Global Market Insights Inc. growth projections
The Global Market Insights Inc. report shows the cannabis industry packaging market was valued at $151 million by the end of 2021. The report further forecasts a progression at a CAGR of 11.7% starting from 2022 up to 2028. By the end of 2028, the report projects the growth will reach more than $356.3 million.
More jurisdictions are expected to legalize cannabis for medical and recreational use as time progresses. This will bring more users on board, which will increase the market size. The report provides further details about the current market drivers, opportunities, key strategies, and market size estimations.
Key drivers of cannabis packaging market growth
The cannabis packaging industry is crucial to the growth of the entire cannabis market. In recent times, regulatory commissions in various states and across the globe have implemented a variety of packaging regulations.
On the other hand, processors have been inventing new cannabis forms, such as edibles, concentrates, extracts, leaves, and flowers. Each cannabis form requires customized packaging solutions, which are pushing fast the growth of cannabis industry packaging. The growth of the packaging industry is bright due to a variety of key driving factors.
The increasing legalization of cannabis for medical use
More and more states and nations have been passing laws for the legalization of medical cannabis. For instance, in the US, 39 states, including Washington D.C., had legalized medical cannabis as of February 2023. Legalization has helped increase awareness of the many benefits of medical marijuana to the citizens.
The U.S. Food and Drug Administration recently approved THC as an ingredient to prepare various medications. Some of the THC medications available in the market currently are dronabinol and nabilone, mainly used for the treatment of nausea in cancer and HIV/AIDS patients.
Scientists have discovered that although cannabis may cause intoxication, it does not have negative health impacts on users. The increasing legalization of cannabis for medical use means increasing demand for packaging solutions. The surge in demand is directly causing a surge in revenue generation in the cannabis packaging industry.
Surging adoption of glass in cannabis packaging
CBD oil is mainly packaged in glass containers such as jars and bottles. They provide airtight packaging and are both moisture and odor resistant. Glass packaging is manufactured using high-grade hygienic glass. Reports show that the glass packaging sector will propel the cannabis packaging industry at a CAGR of more than 11.8% from 2022 to 2028.
The use of plastic packaging is also destined for growth throughout the assessment period. The packaging solution is considered more economical, and its cost of production is lower compared to other solutions. Plastic is stronger, and it might compel the splitting of growth of the cannabis industry packaging in the future.
Growing consumer preference for cannabis flower
57% of cannabis consumers in the U.S. say they use both flower and non-flower products. Nevertheless, flower remains the main cannabis product in the market, attracting 44% of total sales in 2022. In the past few years, operators have been aggressively marketing cannabis. They have introduced the products to new markets while also focusing on the existing markets. Studies show that most customers are complementing flower consumption but not replacing it.
Further reports show that most customers are buying flower-only products, which is boosting its growth. Based on the cannabis packaging industry market share, the flower sector is forecasted to grow by over 12% year-to-year from 2022-2028. More than 2/3 of states have legalized medical cannabis, which is another reason why flower consumption is growing tremendously.
Looking at the regional market, cannabis industry packaging in North America is forecasted to hold a market share of about 93% by 2028. State governments in the U.S. have offered their hand of support to the sector, which has helped boost legalization in more states. Both micro and macro cannabis startups enjoy incentives and grants from the state governments.
The startups are pushing further the growth in demand for flower products. As more startups take root, demand for packaging continues to grow. Such factors will be crucial in the growth of the cannabis packaging sector and will help boost its market share beyond the projected figure by 2028.
How the pandemic boosted the growth of the cannabis packaging industry
The implementation of the lockdowns during the height of the pandemic negatively affected many business sectors in North America. To the cannabis market, the lockdowns boosted the purchase of both medical and recreational cannabis products. Many customers feared there would be a disruption in the cannabis supply chain and thus made hasty purchases to have more stocks in their homes.
Retailers recorded the highest sales in March 2020, which boosted demand for packaging products. There are more packaging solutions manufacturers joining the market. However, the leading manufacturers so far include Green Rush Packaging, Max Bright Packaging, Berry Global Inc., KushCoHoldings Inc., Cannaline Cannabis Packaging Solutions, and mothers.