A closer look at regulated cannabis packaging and labelling in Canada’s legal market

In the May 2017 issue, a few months before Canada’s cannabis regulations were released, I predicted what regulated cannabis packaging could look like in Canada’s legal market. Since then, legalization has come and gone and Canada is now the largest legal marketplace for cannabis in the world. Professionally, I’ve been fortunate to witness and participate in the rapid evolution of cannabis packaging as manager of Jones Packaging’s Innovation Solutions Group here in London, Ontario. Our business unit is focused on identifying and developing innovative products and services that bring value to complex, regulated industries – such as healthcare, pharmaceuticals, food, and of course, cannabis.
Here, I’m going to re-visit cannabis packaging and labelling regulations and explore what regulated cannabis packaging actually looks like today. I’ll review packaging and labelling regulations in Canada, examine how they impact the way cannabis is packaged, discuss the various challenges these regulations present, and explore ways to solve them. Keep in mind that this article isn’t an authoritative guide. It’s important to refer to official regulatory documentation when making final decisions on packaging and labelling. Our goal is to improve your ability to navigate Canada’s cannabis regulations and provide insights that may aid in maximizing packaging value within these restrictions. Personally, I also hope that discussing these regulatory challenges can promote examination of positive legislative updates.
So why am I focusing on labels? For those not familiar with packaging regulations, the term “labelling” may be misleading. Labelling isn’t just about labels. In Canadian regulatory language, it refers to all information that must or must not appear on or with a container. A container is defined as a receptacle, package, wrapper or confining band in which a product is offered for sale and displayed to consumers. Cannabis regulations are accessible on the Government of Canada’s website (http://bit.ly/cannabisregulations). A good place to start reading is Part 7, titled Packaging and Labelling. Cannabis packaging is also affected by Canada’s Cannabis Act (legislation that enables cannabis regulations), the Consumer Packaging and Labelling Act, the Food and Drug Act, and excise stamp requirements – as well as each province’s respective distribution requirements. An in-depth understanding of all applicable federal and provincial requirements can provide insight on how to address regulatory ambiguities and aid in maximizing cannabis’ packaging value.
Why do we need packaging and labelling regulations for cannabis?
The goal of all consumer-packaging regulations is to protect the consumer. Cannabis, as a controlled substance, has specific focus on promoting responsible use and also protecting minors. Keep the spirit of these regulations in mind when deciding how to proceed in areas where regulatory language is unclear.
Do all cannabis products have the same labelling regulations?
No. At the moment, there are five “classes” of cannabis, which describe the types of cannabis products allowed for sale in Canada. Each class has slightly different requirements. Classes of cannabis are described in Schedule 4 of the Cannabis Act (http://bit.ly/cannabisact-s4) and currently include:

1. Dried Cannabis
2. Cannabis Oil
3. Fresh Cannabis
4. Cannabis Plants
5. Cannabis Plant Seeds

Classes 1 to 3 also have slightly different regulations for “discrete” formats (e.g. pre-rolls, oil capsules). Additional classes of cannabis products are expected to be legalized next year (e.g. edibles), each of which will have their own requirements.
Are regulations for medical and recreational cannabis different?
The regulations described in this article apply to both medical and recreational products, but medical products may require patient information and different distribution. Are there separate regulatory requirements for different levels of packaging? Cannabis regulations describe different requirements for the following levels of packaging:

1. Immediate containers: primary packaging in direct contact with cannabis product
2. Any container: includes secondary packaging, e.g., carton containing immediate container
3. Coverings: outer wraps, such as tamper-evident bands

All containers must display the same regulatory labelling, with a few exceptions such as opening instructions and barcodes. It’s worth reading the regulations to understand which elements can be omitted from primary or secondary packaging – which are described in the regulations as “immediate container” and “any container,” respectively. Coverings (e.g., tamper-evident sleeves) are allowed, but must be transparent and colourless, with no images or text. Only immediate containers are required to: provide tamper evidence; prevent contamination; be opaque or translucent; contain less than 30 g of dried cannabis or the equivalent of its class (found in Schedule 3 of the Cannabis Act); and in the case of dried cannabis products, keep cannabis dry. Immediate containers for all classes except for plants and seeds, must also meet child-resistance standards described in Canada’s Food & Drug Regulations C.01.001(2) to (4) (http://bit.ly/fdreg-c01001).

Are there restrictions on packaging’s look, feel and function?
Yes, quite a few! These Include:

• Matte finish required on exterior
• No raised features (e.g., embossing), except features to facilitate opening/closing, and features necessary to assist visually impaired individuals
• No brand elements beyond those allowed under regulations
• No images, except opening instructions
• Barcodes can only be displayed once and must be rectangular in shape with no design
• No metallic, fluorescent, heat-activated, or any ink that absorbs UV light and emits it at a lower frequency
• Background must be uniform in colour, and contrast with red used in the standardized cannabis symbol, and yellow background of the health warning
• No cut-out windows
• No features that emit scent or sound
• No features that changes a container’s surface area
• No hidden features that alter a container’s appearance through technology, except for anti-counterfeiting purposes

Are there typeface restrictions?
All regulated text on a cannabis container must be:

• Black only and the same sans serif font used in the health warning (except for brand name, which can be any font and colour)
• Regular weight and width
• No bolded or italic type, except for bolded elements required under regulations
• Black only
• Minimum type size = 6 pt.
• Maximum type size  = health warning type
• Minimum leading = 7 pt.
• Bilingual
• Displayed on a white background, with minimum 6-pt. margin

The health warning has specific requirements we’ll discuss in a following section.
What exactly is required to be displayed on a cannabis product?
As with most packaging, the Principal Display Panel (PDP) plays a crucial role. Certain elements must be displayed on the PDP, while others do not. PDPs for different packaging formats can be found in section 2.5 and 2.6 of the Guide to the Consumer Packaging and Labelling Act and Regulations (http://bit.ly/CPLguide-25).
Elements that must be displayed on PDP include:

• “Standardized Cannabis Symbol” displayed within upper left 25% of PDP, at a minimum size of 1.27 cm x 1.27 cm and a minimum 2 pt. white border (http://bit.ly/standardcannabissymbol)
• One brand logo (must be smaller than Standardized Cannabis Symbol)
• Brand name
• THC and CBD information, displayed in bold, 6 pt. away from any other information
• Health warning (to be discussed)

Elements that can be displayed outside PDP include:

• Name, email and phone number of product’s applicable licensed producer
• Class of cannabis
• Lot number
• Recommended storage conditions
• Packaging date
• Expiry date (only needed if expiry has been determined)
• The following warning: “KEEP OUT OF REACH OF CHILDREN/TENIR HORS DE LA PORTÉE DES ENFANTS”
• Net weight
• Class specific elements (e.g., oils must list allergens)

It’s important to note that each class of cannabis may have additional or different expressions of regulated elements, as described in paragraphs 124 to 127 of the Cannabis Regulations (http://bit.ly/canreg-part7). For example, only cannabis oils require allergens to be listed. Also, each class has different expressions for THC, CBD and net weight. Also, knowing certain regulated elements allow for variations in wording may help to maximize precious packaging real estate. For example, meeting bilingual requirements doesn’t always require displaying an element in both English and French (e.g., “1 g” is the same in both languages).

© Jones Packaging Inc., 2019
So, about this health warning…..what does it involve?
This is the big yellow box that contains a warning message inside. This health warning has its own font and layout restrictions, as described in paragraph 130(6) of the Cannabis Regulations (http://bit.ly/canreg-p130). It must be on the PDP and displayed parallel to the base of container. The health warning dictates maximum font sizes for other regulated elements, and is usually (graphically) the largest and most imposing of the regulated elements on a cannabis package. These warnings are also referred to as rotating warnings, as there are two sets of 14 warnings  (http://bit.ly/cannabishealthwarnings) – one set for dried cannabis and the other set for other currently legal products. These must follow “rotation” rules set in paragraph 123 (4) of the cannabis regulations: “…displayed in rotation on each type of container of each brand name of the cannabis product that is packaged in a year, so that each health warning message is displayed, to the extent possible, on equal numbers of containers of that product.” For comparison, tobacco products have a similar health warning, but with much stricter requirements on format and rotation. The tobacco industry, however, has a distinct advantage in legacy and scale. The wording of “to the extent possible,” helps alleviate some of the challenges involved in printing 14 different layouts per SKU.

© Jones Packaging Inc., 2019
What are the requirements for excise stamps?
These are stamps applied to each container of cannabis product which reflect the excise tax paid to the government by a licensed producer. There are a variety of challenges surrounding application of this stamp, as discussed in a recent article by the Financial Post (http://bit.ly/fpexcisestamparticle). Official documentation on cannabis excise stamps can be found here: (http://bit.ly/cannabisexcisestamps).
So, is that it? No, there’s more! But we are running out of space and it’s important to discuss the challenges these regulations create. In my opinion, there are three major challenges created by cannabis packaging and labelling regulations:

1. Branding/differentiation
2. Economies of scale
3. Excess packaging

Why do regulations make it difficult for branding and differentiation?
The easy answer is that these regulations are specifically designed to limit branding. It can be argued, however, that certain regulations add complexity without accomplishing this goal. One example is the requirement for matte finishing on a container’s exterior. Is a matte finish less appealing than a gloss finish? Brand owners of products in packaging with high-end, soft-touch finishes might disagree! From a feasibility standpoint, while applying a matte finish onto paper or flexible substrates is easy, some rigid containers like glass bottles or plastic jars are naturally glossy. Unit costs for rigid containers are also highly volume-dependent, and creating custom matte versions further impacts economies of scale, which are already challenging. Fortunately, we’ve seen non-matte rigid containers make their way through approval to the legal sales market – and hopefully, they’re here to stay.
From an optimist’s viewpoint, it’s also true that challenging situations create opportunities. For example, having an in-depth understanding of these regulations offers valuable insights when designing effective packaging layouts. We’re also seeing an emergence of cannabis-specific packaging formats – particularly with child-resistant opening features – that provide brand and functional value.
Why do regulations make it difficult to achieve economies of scale?
There are a variety of reasons for this, some already discussed previously (e.g., rotation requirements for the health warning and the link between packaging unit cost and volume), and some that are intrinsic to the nature of a nascent legal cannabis industry. For example, wholesale volumes for cannabis units sold are still relatively small compared to other mature industries. Cannabis regulations, however, do create additional challenges for large-run printing. In regard to regulatory labelling, one of the main challenges is the printing of lot-level data. A “lot” can be described as a group of one single product that’s packaged at the same time. Lot-level data includes information that varies from one lot to another, such as THC and CBD amounts, lot number and packaging date. Most provinces also require a GS1-expanded databar for retail, which is basically a longer UPC barcode that includes lot number and expiration.
THC and CBD amounts present their own specific challenges. Variability in THC and CBD percentages between lots often exceed allowable tolerances. This means that a sample from each lot must be tested before this information can be printed. Due to current cultivation and sales cycles, coupled with an emerging market’s difficult-to-predict sales volumes, licensed producers aim for fully printed product packaging a week after THC and CBD information is verified. To address this short turnaround, some licensed producers maximize economies of scale by ordering larger quantities of packaging (sometimes pre-printed with non-lot-level data), and then print and apply labels at the time of pack-out. This is why most cannabis products on the legal Canadian market currently have labels on them (we already have enough content for several articles about the advantages and disadvantages of different label-printing technologies). When you buy Smok vape products and recharge them with cartridges, you get familiar with these terms and you will develop your own process.
Packaging dates
The packaging date presents another challenge. Even if cannabis cultivation and processing advances to where THC and CBD amounts are exactly the same within each lot, the date a product is packaged will still be subject to logistical variability – meaning that the packaging date should be printed at the time of pack-out. Printing just a date is feasible, and efficient printing methods already exist for this purpose. Current solutions, however, either involve prohibitive capital costs or are unable to meet font and type size requirements for cannabis (I challenge you to find a product in your grocery store with its expiration date printed in crisp, clear 6-pt. type).
These challenges above are not insurmountable. Pharmaceutical drug manufacturers face similar and often even more stringent restrictions. Major pharmaceutical companies can also spend millions of dollars on one packaging line geared for one product. The cannabis industry has not yet reached these volumes. Of course, cannabis-inspired innovation cannot be discounted (it’s happening already). Until then, an adjustment to the regulations that allows lot-level data (especially THC and CBD amounts and packaging date) to be printed at larger-type sizes could drastically improve packaging costs and efficiency for cannabis products.
Why is there so much excess cannabis packaging?
There are several articles on this topic available with a simple Google search, so I’ll attempt to avoid too much duplication. Current packaging may appear excessive, but is mostly incorporated out of necessity to meet regulations, excise stamp requirements, and provincial distribution requirements (e.g., the GS1-expanded barcode). As mentioned previously, loosening type and font restrictions for lot-level data may eliminate current reliance on labels. The volume of regulatory information currently required also forces containers for the smallest units of cannabis to be packaged in containers meant for larger quantities! Packaging regulations for other industries usually include exceptions for small units (e.g., reduced-type minimums or ability to omit elements depending on PDP size threshold). A similar amendment to cannabis regulations will greatly improve package-size optimization.
Furthermore, a restriction in the regulations that denies “features that alter a container’s surface area” eliminates the possibility to incorporate foldout panels, like those utilized in packaging for OTC drugs to accommodate regulatory copy. Amending cannabis regulations to allow for certain regulated elements to be displayed underneath a foldout panel can improve package-size optimization, which can further translate to a drastic reduction in carbon footprint for product shipments.
What’s next for regulated cannabis packaging?
There are certain trends I’ve alluded to that appear likely to continue. Sales volumes are likely to increase as the market matures, and also become more predictable, as cannabis companies accrue sales data to inform procurement teams. These factors will open up currently unfeasible options for printed packaging, while technological breakthroughs and packaging innovations may also drastically alter this equation. For example, we’re already seeing a growing ecosystem of child-resistant packaging solutions that were unavailable last year. Interestingly as well, a combination of specialization and vertical integration is happening concurrently, as we see companies find success by offering specialized services (e.g. extraction), alongside continued consolidation of companies into massive conglomerates that can do it all. It’ll be fascinating to monitor the emergence of business models that address the unique requirements of this industry. Cannabis regulations are bound to be updated as well – although the direction this will go or when this will occur is less clear. Personally, I hope some of the regulatory suggestions made in this article are considered.
Overall, I sense an overwhelming enthusiasm from players in the cannabis industry and a genuine sense of shared responsibility as stewards for cannabis as a positive force. For example, sustainability is heavily promoted in cannabis, and it appears that corporate culture and consumer demographics are well aligned for the development of sustainable packaging solutions. Emerging cannabis industry groups can hopefully facilitate collaborative opportunities to further these values.
At Jones Packaging, we’ll continue to monitor these trends, while maintaining an understanding of the nuances in changing legislation and market relationships. Not only do we strive to actively participate in the development of the cannabis market, but we also aim to make a positive impact by responding to market needs with meaningful innovations and technologies. Our unwavering focus on patient safety and wellbeing extends to all the industries we serve – from healthcare and pharmaceutical, to food and many more. This, combined with our expertise in printed packaging, GMP contract packaging, healthcare supply and intelligent packaging, can help build a strong ecosystem of supply chain support for this fast-moving industry.