Packaging is an essential part of the supply chain and often serves as consumers’ first consideration in purchasing decisions. Beyond communicating brand identity, packaging is crucial to keeping products safe and maintaining compliance with state, local and, in some cases, federal regulations.
In cannabis, the product-packaging market is growing apace with the industry as a whole. Grand View Research projects the market in the United States will expand at a compound annual growth rate of 28.9 percent between 2024 and 2030. The burgeoning sector includes materials sourced both domestically and from other countries, with China—at a market share of 25 percent in 2023—among the most popular sources.
This growth, paired with stringent regulatory requirements, has sparked innovations in design and function as suppliers compete to provide the best offerings at the best prices. But concerns about supply-chain affordability and economic instability are impacting virtually all businesses right now, and packaging is no exception.
United Nations Trade and Development lists trade imbalances, evolving policies, and geopolitical tensions as new risks threatening global markets. Supply-chain disruptions, potentially exacerbated by tariffs, could further aggravate the instability and economic anxiety cannabis business owners face in an already complicated industry.
With many American businesses sourcing their materials from overseas suppliers and looming concerns about trade with China and other countries, there’s plenty of room for new hurdles to crop up. Inconsistency in available materials, for example, is impacting some suppliers.
“A lot of packaging companies out there are distributors who don’t have direct control over their supply chain,” said Ron Basak-Smith, Sana Packaging’s chief executive officer. “Products may come and go, and then companies have to pivot to something different.”
Lawrence Perrigo is well acquainted with that challenge. As the founder and creative director for Seattle-based Saints Joints — a brand known for its limited-edition boxes — he has found sourcing consistent packaging can be a consistent source of headaches. “You’ll order packaging you like and then it’s hard to find again, or they sell out because so many businesses are making the same types of products,” he said.
Supply-chain disruptions, paired with sometimes significantly different state-by-state regulations, weave a complicated web for packaging providers to navigate. Michael Markarian, CEO of Contempo Specialty Packaging, said compliance across multiple states also “creates a need for more SKUs and [packaging] inventory to manage.”
“It’s difficult to manage different warning labels, requirements, design elements, fonts, and color regulations,” said John Hartsell, co-founder of Arizona-based provider DIZPOT. “Waiting for state officials to review and approve each packaging design before we go into production, in some cases, can take months.”
Communicating these obstacles to clients can prove challenging, too. “There tends to be a lack of education on how long a package takes from its conception and design all the way to the dispensary shelf,” Hartsell said.
Cannabis companies are no strangers to regulatory difficulties. It’s part of the job. But as impending trade wars and the potential for recession increase economic anxiety across the country, it’s prudent for packaging businesses to stay tuned into market trends.
Shift toward bags and pouches
Mylar bags and pouches tend to be less expensive than glass jars, tubes, and other common container options. Packaging providers report clients switching to these options as a first effort to cut costs without sacrificing crucial compliance elements.
The shift contrasts with a 2023 Grand View Research report that found rigid packaging to be the dominant choice at more than 66 percent of cannabis brands worldwide. While rigid containers are less susceptible to damage like crushing and puncturing and make child-resistant features easier to implement, many suppliers report discovering their customers are primarily concerned with securing affordable packaging, even if affordability means making minor compromises on convenience and damage-resistance.
“We’re seeing a lot of movement from rigid to flexible packaging,” said Tony Reyes, president of Illinois-based CannaCarton. “Back in the early days of [the industry in] Colorado and California, there were these polypropylene pop tops, then people went to glass jars and mylar. That’s what you see when the new markets open up. There’s more money to spend on packaging. People start in a glass jar and then, as the market gets more dense and competitive, they have to try to manage costs and move to lower-cost options.”
Kary Radestock, executive director of strategy and sales at California-based Treeform Packaging Solutions, also has seen some companies cut costs by switching from rigid containers like tins and jars to less expensive mylar bags and pouches.
Though flexible packaging may be more economical, Radestock questioned whether the savings are worth the potential effect on consumer perception. Packaging’s quality subliminally communicates a lot about the product inside.
“Packaging is brand positioning,” Radestock said. “What you put your product in communicates the type of product it is. If it’s an upscale or high-end flower, it’s going to be in a glass jar. If it’s a mid-shelf flower, it’ll probably be in a bag.”
Bulk on the rise
Providers also report seeing an increase in bulk purchases by both businesses and consumers.
Reyes has noticed more brands inquiring about ways to be cost-effective, with many wondering whether they can save money by ordering containers in larger quantities. Because CannaCarton manufactures domestically, ordering in bulk is a practical solution, he said. “Get it faster, get it in the U.S., and maybe order a little higher quantity,” he suggested.
Contempo’s Markarian agreed bulk orders can reduce per-unit costs, but other considerations also affect the equation. “A fifty-cent package might be great for a five-pack of pre-rolls but is cost-prohibitive for a single one-gram pre-roll,” he said.
Product brands aren’t the only ones reconsidering their packaging strategies. Cultivators are trying to move inventory more quickly to combat oversupply. Oregon farmers, for example, harvested more than 9 million pounds of flower in 2023, at a time when the state’s sales continued a steady downward trend. And Oregon is not alone. Colorado faces a crushing combination of oversupply and price compression, as does Washington state. Even younger markets like Michigan are seeing wholesale and retail prices plummet. According to Whitney Economics founder Beau Whitney, restoring the balance between supply and demand could take years.
Reyes said the need to reduce inventory means more cultivators and brands are looking to sell as much as they can in a single package. Thus, he’s noticed a trend in demand for containers that provide more interior space. “In Michigan, you’re seeing fifty and seventy-five joints in a pack,” he said. “You’re seeing flights of products. ‘How can I sell three grams of cannabis concentrate instead of just one? Let’s offer a flight; let’s put things in a flight box.’”
Standing out with custom designs
Even faced with supply-chain and affordability challenges, companies rely on their packaging to communicate with customers and stand out from the competition.
“Brands are homing in on their key differentiators and investing in their shelf appeal,” said Hartsell. “Creating special-edition packaging for more mainstream holidays such as St. Patrick’s Day, Mother’s Day, and Veterans Day is becoming more and more popular, because it also doubles as a great tool for marketing.”
Packaging Digest backed this claim last year by examining consumer responses to Valentine’s Day packaging. The trade journal evaluated Seattle-based House of Cultivar’s limited-edition Valentine’s Day product, which featured one-eighth ounce of the Lobster Roll strain.
House of Cultivar turned to Roland DGA and GoldLeaf Packaging to create labels printed with ultraviolet ink on a holographic substrate. The result was a colorful, textured label that produced a rippling rainbow effect when the jar was turned.
The eye-catching graphic design was developed in response to a 2023 Physis + Agency survey of more than 1,000 flower consumers. According to Physis+, survey respondents were willing to pay up to 26 percent more for an eighth if they considered the packaging “special.” More than 72 percent of respondents said they’d pay more for a jar of flower if it came in a collectible or repurposable container.
Depending on where companies source their materials, the cost to make packaging special may or may not be prohibitive.
“Everybody loves holographic foil or embossing,” said Radestock. “When producing in China, it doesn’t cost that much more to add some bells and whistles.”
Hartsell pointed to DIZPOT’s auditory consumer engagement (ACE) box as another example of innovative packaging that is building momentum. “Think of a jewelry box that plays a tune when you open it. This is the same concept,” he said. “The ACE box is unconventional and something consumers will remember, which speaks to brands.”
Still searching for sustainability
Despite attempting to reduce costs by swapping package formats, ordering in bulk, and increasing container sizes, the industry hasn’t ditched its environmental consciousness. But affordability challenges can make maintaining a commitment to sustainability difficult.
“I’ve been in packaging for twenty years,” said Reyes. From its earliest days, the industry sought Earth-friendly ways to conduct business, but “when COVID hit, sustainability was sort of shelved for a lot of industries. Sustainability is in a backseat position right now. There is plenty of innovation in materials and formats, but there’s not enough scale. People aren’t buying enough [sustainable packaging] to drive the price down and bring it to cost parity with the traditional options.”
Not everyone is price-driven, though. Reyes said he sees many customers who don’t care about packaging design at all as long as the materials used are sustainable.
Basak-Smith explained Sana Packaging — which “designs and develops cannabis packaging for a circular economy using plant-based, reclaimed, and recycled materials” — can keep prices for sustainable options affordable because the company is not dependent on global supply chains. Economic concerns aside, he emphasized that achieving a truly sustainable product involves significant logistics and some compromise.
“It’s a world of tradeoffs,” he said. “You might see pouches have a lower impact on the upstream: To produce a pouch is going to require less material; to ship a pouch costs less. But on the flip side, you can’t recycle pouches, and that’s difficult to relay to the consumer.”
Although some operators may have relocated sustainability to the back burner, at least temporarily, consumers haven’t. They still want sustainable packaging. A 2023 Brightfield Group report indicated consumers prioritize plant-based, plastic-free, biodegradable, and compostable options.
But as Markarian explained, there is still some uncertainty about what the word “sustainable” means. He pointed to two examples of diverging regulatory definitions: New York state’s mandate that all plastic packaging be made of at least 25 percent post-consumer recycled materials and Vermont’s no-plastic-packaging rule.
“Cost-cutting and the move to mylar bags are becoming more common in mature markets,” he said. “Sustainability-wise, the flexible packaging industry makes the argument that mylars are sustainable due to using less materials and resources in production and transport. Whether this is a marketing spin or valid is openly debated and a hot topic.”
He also pointed to Oregon’s upcoming extended producer responsibility (EPR) law, which broadly targets recyclable materials to increase recycling rates in the state. The EPR law, with an effective date in July, will require producers to pay a fee based on the weight and type of packaging used.
“Operators need some relief,” said Markarian, who suggested a tax credit for sustainable packaging choices. Tax credits would “be a great step forward in incentivising eco-friendly practices, especially in markets with EPR.”
He also said he lives by the mantra “progress, not perfection” when it comes to sustainability. “While we may have an opinion on moving to mylars versus differentiating, we are most concerned with executing the vision of our clients and will go down whatever path they want,” he said. “We can make really beautiful mylars at great prices that are sustainable too.”
Tariff trepidation
Supply-chain issues occasionally arise in any industry that manufactures consumer packaged goods. Although most represent minor snarls, the global collapse that accompanied the COVID-19 pandemic introduced a whole new level of disruption. By early 2024, the global turmoil had settled down, but the struggle left scars.
Then, in January 2025, a new presidential administration assumed office, bringing with it a series of on-again, off-again tariff policies that unsettled the global supply chain. By early April, the administration had placed a punitive tariff of 145 percent on goods from China — a primary packaging resource. So-called reciprocal tariffs on imports from about ninety other nations leapt from an average of 2.5 percent to percentages ranging from 11 to 50. Days after imposing the levies, the president deferred most of them for ninety days, leaving in place the unprecedented duty on Chinese goods and lowering the tariff on almost everyone else to a base level of 10 percent.
Indecision in the White House has left industries across the spectrum uneasy about the potential for trade-war escalation and consequent price increases, but there’s no consensus on just how worried packaging suppliers and their customers should be. While some suppliers consider their domestic networks to be a key selling point, those working with overseas vendors don’t seem too concerned about tariffs’ potential impact.
“It’s shaking things up a little bit,” said Reyes. “We’re going to get tariffs passed on to us, and then we’re going to have to pass them on. CannaCarton is already paying more for everything and, unfortunately, we have to pass the costs to our customers.”
He suggested higher costs will remain a challenge until more domestic capacity develops or companies shift toward vendors in non-tariffed countries. Although he admits tariff concerns are valid, Reyes projects increased costs won’t impact the industry too harshly. “The good news is that we make a lot of things ourselves here in the U.S.,” he said. “With labels, pouches, boxes, and many other items, there is no impact from tariffs.”
He also said his customers are very receptive to U.S. manufacturers. As the new tariffs have sparked conversations, he’s noticed increased curiosity about employing American-made materials.
Sana’s Basak-Smith also has noticed increased interest in transitioning to local suppliers. The company recently announced a significant price reduction for its core made-in-the-USA products as a way to help businesses manage their costs during a period of uncertainty. “We’ve always produced our products domestically, so the tariffs don’t affect what’s happening in our world,” he said.
Markarian wonders whether tariffs will cause a shift toward domestic production or become just another tax on operators. He observed that in the short term, operators probably should expect elevated costs and packaging manufacturers should prepare for increased pressure.
Nevertheless, he said, with some exceptions “the cost of the tariff is still less than the cost to produce the product domestically,” at least for now. Domestic investments are on Contempo’s radar, and the company is preparing for the moment when production in China is no longer the most cost-effective option.
Radestock isn’t ready to panic. “People have been freaking out, saying ‘we’ve got to go somewhere else. We’re going to have to move production,’” she said. The more prudent course, she believes, is “let’s just hold on a minute and see what this really means to us.”
Although tariffs have, indeed, increased shipping costs, she said the hike hasn’t reached the point at which moving Treeform’s business elsewhere would make sense. “We’re seeing nominal increases in the shipping costs,” she said. “Most companies are absorbing those extra costs. If anything is passed along, it’s usually pretty nominal.
“We always have to be flexible,” Radestock added. “If all of a sudden the price goes up 5 percent because of this or that, we have to go back and try to reengineer the project to make sure it still fits in the client’s budget without sacrificing quality. Those types of things are happening right now, but they also happen nearly every day anyway. I wouldn’t say things have changed that much.”
Hartsell harbors a similar view. “Tariffs should only impact the cannabis packaging industry to an extent — and the extent varies by product, where said product is sourced, and the negotiating power the supplier has with their vendors,” he said. “We actually charge less for certain packaging today than we did in 2017, because of our relationships, negotiating power, and the strength of our international partnerships.”
Whether trade imbalances, geopolitical tensions, or other supply-chain concerns will impact the packaging industry — and, if so, how substantially — remains to be seen. For now, suppliers are skipping the panic and opting for practical solutions that balance the need for affordability with their customers’ need for containers that do the best possible job of protecting their products and representing their brand.
