Will Large Printing Companies Work with the Cannabis Industry?
It’s no secret that the meteoric rise of cannabis legalization throughout the United States has created a “Green Rush” of businesses looking to capitalize on the emerging market1. A quick glance through Marijuana Business Daily’s Packaging & Supplies section reveals over 200 unique businesses geared specifically towards the cannabis industry nationwide2. While this number represents a staggering growth in GDP from previous years, many larger companies worry about the implications of working with the cannabis industry.
One of the main concerns raised among purveyors of a national brand is that association with a cannabis business would be interpreted by their consumers as an implied endorsement3. Their fear is that current customers who are opposed to cannabis legalization (medicinal or otherwise) would feel alienated. Business leaders in the packaging industry, on the other hand, feel that they are merely responding to current market demands by participating in an emerging market and its implications for packaging.
An iconic example of this issue is the way Big Tobacco is handling the green rush. Philip Morris has been considering joining the cannabis game ever since the 1970’s, before Nixon initiated the infamous War on Drugs4. Consequently, as legalization takes effect in many states, and cannabis becomes a profitable cash crop, Big Tobacco is weighing in. Monetary considerations are driving their interest, but societal perception is slowing their hand. Which way will their lean? By studying their behavior, it seems clear to the observer that they are poising themselves to make a move. And with enough money to enter the cannabusiness at any stage of the game, Big Tobacco will be watched.
While the analogy of a different national brand is appealing, the printing business is far from similar to Big Tobacco. For one, the printing industry is much more competitive—tobacco has so many restrictions into entering the business that it creates a near-monopoly for current producers4. Competition drives innovation, and an increased interest in emerging markets where companies can stake out their claim early for maximum market capture later on.
Hewlett-Packard, Sealed Air, and Smurfit-Kappa, all large printing and packaging business, have yet to make an official stance on the matter one way or another. But as more states legalize cannabis, the federal government moves closer to full legalization, and the market cap of cannabis continues to grow, some would say that they must.
- Image: http://www.thegshgroup.com/fieldpax