WHY IMPORTING YOUR OWN CANNABIS PACKAGING MAY NOT BE COST EFFECTIVE

 

The cannabis market is forecasted to grow to $90.4 billion by 2026. With growing demand, operators like dispensaries, production facilities, cultivators, and distribution facilities will be required to develop increasingly efficient methods, systems, and strategies. Similarly, newcomers to the industry must avoid common pitfalls that could result in adverse business outcomes.

It is easy to overlook the details of developing an effective production line, and seemingly “small” details like packaging are taken for granted. However, these elements of a business play a significant role in supply availability, distribution, and sales. While cannabis packaging is a tool for holding and transporting the product, it also helps with branding, marketing, and sales.

Beyond the aesthetics and practical value packaging offers, there are also legal elements. Many businesses that decide to import their own custom marijuana packaging directly from overseas suppliers do so in the hopes of saving money but usually ends up costing more money, time, labor, and product value in the process. Here at Cannabiz Supply, not only do we provide high-quality packaging for our customers, we also take care of all the import logistics.

In this article, we will outline why some operators choose to import their own packaging, the top reasons why it’s a bad idea to do so, and what you can do instead.

Why cannabis operators choose to import their own packaging

Many businesspeople get drawn into deals based on pricing alone, without realizing the ramifications of the loss in quality or convenience that they are paying for with a discounted rate. Barbara Fox, the owner of Cannabiz Supply, sees customers fall for this when choosing to directly import their packaging from overseas rather than working with an experienced, domestic intermediary like Cannabiz Supply.

“Maybe we’re charging 42 cents per unit,” says Fox, “and they’re going to pay 28 cents” from importing directly. But behind that discount is a hidden set of hurdles operators will face at every subsequent step.

Top 4 reasons why importing your own packaging may not be a good idea

1. It ends up being more expensive

Operators may be lured in by a 28-cent per unit price instead of a 42-cent per unit price and see a great opportunity to save on overhead costs. However, according to Fox, “a lot of the things they’re not considering when they import their packaging…manufacturers don’t already include tariff costs which can be anywhere from 25-28% on most cannabis packaging.”

On top of that, when looking to run your own import system, freight costs, bond agents, and power of attorney fees must be considered. With these extra expenses, which are essentially built into the price of a domestic supplier, business owners and operators wind up spending exponentially more on bills and fees for their packaging supplies. Plus, shipping costs fluctuate daily, so the price quote you received upon inquiry may not be the same price in effect on the date your order actually ships.

2. It likely won’t include all necessary patents and certifications
All packaging requires ASTM global child certifications, CPSC consumer product safety certification, and General Conformity certification, ensuring items sold domestically meet health and safety standards. Some states, like Oregon, require all three criteria to be completed. “If you don’t have proof of these on your packaging, it will not get approved,” says Fox.

When importing your packaging, chances are, it won’t meet any or all of these criteria. Fox explains, “If you import it, it might not be child-resistant or have the necessary documentation to back it up. If you can’t present those certifications, you can’t use that container for your products.”

Trying to sell your product without these certifications opens the business to immense liability for lawsuits. Chinese manufacturers often manufacture knock-off cannabis exit bags that copy commonly used, patented products and could potentially get you into legal problems for patent infringement if you are found using them.

Without a thorough knowledge of the legal & regulatory requirements, product specifications, and import landscape, business owners have no way of accurately navigating these patents and certifications to ensure their products will be sellable.

3. Miscommunications will cost you
Even at a lower price point, importing your packaging entails communicating directly with foreign vendors, which makes you subject to language barriers when discussing details of the finish and design you are looking for. From color codes to materials, finishes, and effects, there is so much room for error when people don’t know exactly how to communicate in the language of the manufacturing country. Typos and color code mistakes have resulted in cases full of faulty packaging requiring reprints.

For example, “someone asking for gold letters can mean foil, metallic, or a mustard color,” says Fox. People who don’t have the technical expertise to explain precisely what they are looking for will wind up with products that don’t match their vision. “Always invest in samples so you can be 100% confident in what you are purchasing.” But again, these samples will come with a fee and will increase your lead time and drive-up costs.

4. You will have to devote labor hours and resources
Managing import logistics is a significant responsibility and will take up additional labor hours from your workforce—especially if it is being managed by an employee who does not have expertise in this area. It takes time to find the right overseas vendor and develop a trusting relationship that will deliver accurate and speedy lead times.

“Importing your own packaging will drive up costs and also take you a ton of time to do it,” says Fox. It is inefficient for business owners or managers to oversee these areas because “These people need to be taking care of the business, products, and employees…In the time it takes to do it, you could be out there making more money by improving the internal operations of the business.”

What should you do instead?

Work with experienced companies like Cannabiz Supply, which can provide viable custom packaging solutions, expertly manage the importing process, and deliver products that meet regulatory requirements and customer needs.
Let’s not forget that Cannabiz Supply offers all-inclusive pricing with no surprise or hidden fees.

Our experienced team can expertly navigate the ever-changing delivery lead times which vary dramatically depending on the vendor, quantity ordered, whether the product being purchased is a new or repeat product, and/or whether the order is being shipped via sea or air.
In many cases, Cannabiz Supply stocks the products operators are looking for, eliminating the headaches that come with importing their own.

For a free consultation email orders@cannabizsupply.com