PIASC Blog

July 20, 2021

Understanding the CBD and Legal Cannabis Market

By Piasc
Understanding the CBD and Legal Cannabis Market

Printers are always looking for new markets. Two markets showing tremendous growth in the next few years are the CBD market, which is expected to reach $20 billion by 2024, and the legal cannabis market expected to reach $41 billion by 2025. These markets need printed products such as promotional materials, outdoor advertising, and labels and packaging. Both of these markets provide opportunities and challenges for printers.

Challenges for printers in these markets include understanding the difference between CBD (Cannabidiol) and THC (Tetrahydrocannabinol) products and understanding the legal requirements in labeling both materials. While it is not the printer’s responsibility to understand all of the legal requirements surrounding the packaging of these two products, it is advantageous to be aware of these laws to help the client make the best choices and create a legal printed product. After all, it is a tremendous “value add” for a printing company to have a specialist that can help clients create printed products that meet government standards so the job will be printed correctly the first time.

Understanding the Differences Between CBD and the Legal Cannabis Market

The passage of the Farm Bill in 2018, set the ball rolling for the growth of CBD products in the U.S. market. This bill removed hemp (Cannabis sativa L) and certain derivatives of cannabis with no more than 0.3% THC concentration from the definition of marijuana in the Controlled Substances Act. So, does this mean all cannabis is legal? No, because not all cannabis is the same.

CBD products must contain no more than 0.3% THC. Legal cannabis products contain a much higher percentage of THC. Promoters of both products say they provide healthy alternatives to traditional medicine. While both CBD and THC have the same chemical makeup, they do not have the same chemical arrangement, which means the body receives them differently. Both of these compounds affect people’s mood, pain, sleep, and memory in different ways. THC elicits a psychoactive response, and CBD does not. Thus, using CBD does not give you the “high” you get with THC.

Helping Clients Promote Their CBD Products

Promoters of CBD products and those who use them claim significant health benefits but putting those benefits onto a label can be problematic. The FDA looks at CBD products the same way as most vitamins. That means these products must contain an FDA-approved warning label.

In addition to the FDA warning label, specific design elements need to be understood when creating CBD product labels. Government regulations require specific type font sizes depending on the package. Helping your clients understand these regulations while they are still in the design process and before they go to press will endear you to them as a trusted vendor.

While government regulations may prevent a CBD manufacturer from including health claims on the label, there are other ways to make these labels stand out on the shelf. For example, various printing embellishments will draw the consumer’s attention to a CBD label. In addition, if the printer is involved in the design process, they can help the CBD manufacturer create a consistent look over various product lines within a single brand.

Helping a CBD client design and print an FDA-compliant label or package is a significant value add. After all, the last thing you want is the FDA sending a warning letter to your client that their company is in violation for using false claims on their product labels.

If a printing company is looking to provide CBD manufacturers with printed products, it would be best to review and become knowledgeable of the FDA Regulation of Cannabis and Cannabis-Derived Products, Including Cannabidiol (CBD) found here: FDA Regulation of Cannabis and Cannabis-Derived Products, Including Cannabidiol (CBD).

The Legal Cannabis Market 

With the rise of the legal cannabis market and products that contain higher levels of TCH, some printing companies are exploring the feasibility of working in this growth segment. You may be surprised to learn that 71% of the U.S. population now live in a state where cannabis is legal. Marijuana is medically or fully legal in every state our association currently serves including California, Arizona, Colorado, Nevada, New Mexico, and Wyoming.

The rise of the legal cannabis market is due in some part to a variety of celebrity endorsements including golfers Tiger Woods, Phil Michelson, and Bubba Watson and the likes of Martha Stewart, Michael J Fox, Kristen Bell, and Whoopi Goldberg.

In California, cannabis is here to stay. In fact, there are three different bureaucracies set up to handle the manufacturing and sale of cannabis. These include the Bureau of Cannabis Control; the California Cannabis Cultivation Licensing Department, which is part of the California Department of Food and Agriculture; and the Manufactured Cannabis Safety Branch of the Department of Public Health. With all these bureaucracies involved, you can be sure the regulations controlling the printing of labels and packaging of legal cannabis products are extensive.

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The California Department of Public Health’s Manufactured Cannabis Safety Branch has an entire California Cannabis Portal with the web address: cannabis.ca.gov. A few short years ago, who would have imagined that the government would have a website dedicated to promoting, packaging, disseminating, and using marijuana.

At my age, when I think of marijuana, I have flashbacks to Cheech & Chong sitting in a car rolling and smoking a joint. Today’s marijuana usage bears little resemblance to those days. A quick Google search will result in a plethora of marijuana products, including Cannabutter, Weed Bacon, Cannaoil, Bud Brownies, Marijuana Ice Cream (made with Cannabutter), Cannabis Tea, Weed Milk, Cannabis crispy rice treats, and Gummy Candy, to name a few. Not all of these products are available over the counter, but those that are, require labels and packaging that must meet government regulations.

In California, you must be 21 or older to have, purchase or use recreational cannabis. This includes smoking, vaping, and eating cannabis-infused products. Cannabis products like brownies, crispy rice treats, and gummy candy could appeal to those younger than 21; thus, state law requires that packaging for these types of products cannot be attractive to children. These laws mirror the rules for cigarettes and vaping products. According to the law, manufacturers in the legal cannabis market cannot design labels and packaging that imitate candy labeling or use the words “candy,” “candies,” or a play on words such as “kandy” or “kandeez” anywhere on the label.

Labels and packaging for edible cannabis products cannot include a picture of the product. According to state law, edibles must be in opaque packaging to reduce a child’s risk of being attracted to the product. Photographs or other images of the product cannot be on the label for the same reason.

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State law also requires all legal cannabis packaging to include the California Universal Symbol, which identifies cannabis and cannabis products.

I have only covered a couple of the laws related to legal cannabis packaging. There are regulations for edible cannabis products, topical cannabis products, suppositories, and orally consumed concentrates. These may be similar to, but are different than, the laws for inhaled, dabs, shatter, or wax products. Each of these variants has its own labeling requirements.

Website Blocker Software

While it is helpful to prospective clients that you are aware of the laws, rules, and regulations surrounding labeling and packaging for their market, a printer thinking of entering this market should consider the impact this may have on the rest of your business. Be aware that many of your current clients work at companies that employ website blocker technology. Some companies use this technology to help employees focus on their work and avoid constant interruptions from breaking news, sports scores, weather reports, blog posts, memes, and YouTube. Many of these blockers also keep employees from viewing drug-related sites.

Your website is where you showcase your best work. It is where your current and prospective clients learn about the markets you serve. If one of those markets is legal cannabis packaging, will a website blocker prevent people from seeing the other products and services you provide? I have seen this happen. A member company received a phone call from a long-time client who told them they could not access the printer’s website. When the client tried to go to the printing company’s site, the client received a message saying they were not allowed to enter. It may be advantageous to create a separate website for your legal cannabis printing materials based on this information.

Getting Paid for Legal Cannabis Packaging

While California and other states have legalized medical and recreational cannabis, it is still illegal under federal law. Thus, federally regulated banks that work with cannabis companies risk steep federal penalties. These penalties can affect financial institutions even in states that have legalized the drug.

According to the California Cannabis Industry Association (CCIA), legal cannabis operators struggle with banking and payment services due to the federal government’s continued ban on cannabis products. In the last few months, legal actions on both the State and Federal levels have tried to reduce or eliminate the federal challenges. On April 19th of this year, the House of Representatives passed a bill that would allow banks and financial institutions to work with cannabis businesses. H.R. 1996, the SAFE Banking Act of 2021 was approved in a 321-101 vote. If you are planning to work with legal cannabis operators, you may want to keep an eye on this legislation as it moves to the Senate.

In California, the CCIA is working together with legal cannabis operators to find a workaround to federal banking restrictions. One option that seems to be working has to do with local credit unions. While the National Credit Union Administration regulates federally chartered credit unions, state-chartered credit unions are regulated at the state level. This means the state sets minimum requirements for both cannabis licensees and state-chartered credit unions. Thus the state, not the federal government, is in charge.

One such state credit union that now provides checking, wire transfers, and other banking services for marijuana companies is North Bay Credit Union. With branches in Santa Rosa, Healdsburg, Sonoma, and Rohnert Park, California, the Credit Union is helping ease what has been an obstacle for many legal cannabis businesses, suppliers, and customers.

The growth expected in the CBD and legal cannabis markets is impressive. The printed materials needed by companies entering these markets will be enormous. A printing company that takes the time to become knowledgeable in these markets’ rules and regulations will position itself as a valued vendor.

About the Author

PIASC is the largest regional graphic communications trade association in the country. They are devoted in helping support members and advocate for the graphics industry. For over 80 years, they have been serving Southern California and now, graphic businesses in the Western U.S.

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