Creative solutions for cannabis supply chain issues
Rising inflation, material shortages, shipping challenges, and ongoing disruption from the pandemic are all having an impact on the cannabis market.
Jesse Dixon, Director of Strategic Packaging for GPA Global, explains how these issues are also driving innovation and creativity as GPA helps customers adjust to the new normal.
At a time when the cannabis industry in the US is undergoing record breaking growth, the difficulties presented by rising costs, material shortages, and shipping issues mean that many cannabis brands have found themselves struggling to capitalise on an increasing customer demand. A recent article in MJBizDaily gives just a few insights into the challenges growers and suppliers are facing. As a packaging supplier we have had to get creative and think outside the box (pun intended) to help mitigate these issues.
Changes to buying practices
THC and CBD product packaging materials such as paper, corrugate and plastics saw cost increases of 25% – 60% last year and have become significantly harder to source. Thanks to GPA’s experience and track record we have been able to leverage long-standing relationships with paper mills and direct manufacturers of raw materials. Securing these materials in bulk and at range has enabled us to pass along savings to cannabis brands in desperate need of support. This is a significant change for the cannabis industry that, until now, has relied more heavily on a hand-to-mouth materials procurement process.
Back to the drawing board
The constraints on materials led us to task our design team to rethink our packaging offering so print production can be manufactured on site at our North American facilities. This has resulted in some exciting innovation and new designs which simplify our packaging and allow it to be produced in the region that the product is grown, packed, and consumed – cutting waste, carbon footprint, and costs. As the industry continues to favour sustainable packaging solutions, moving to local production, and simplified packaging has proved highly appealing to our customers.
Leverage the global network
Another benefit of this increase in output at our Los Angeles production facility has been our customers’ ability / benefit to circumnavigate skyrocketing freight costs. Bidding wars for shipping space have favoured cannabis brands with strong supply chain and procurement teams. By tapping into our expertise and global experience, we’re in a strong position to support brands without extensive networks or established relationships with shipping companies. Combined with the solutions we offer from our local facility; our team has been able to perform miracles for California brands who desperately need a source for quick turn packaging.
Warehousing and logistics
GPA Logistics has also played a huge role in helping customers adjust to the new constraints. As the emphasis has shifted to better forecasting and at range procurement, the need for warehousing has increased. Our local warehousing and 3PL offering are providing brands a viable new business model and helping reinforce our position in the market.
A lasting impact
In short, the global supply chain is experiencing unprecedented challenges. It is a unique time and unique solutions are needed to combat shortages in materials, rising costs, shipping challenges, and the disruption of a two-year pandemic. However, just like the beautiful weed that is making this industry the fastest growing in recorded history, the global supply chain is resilient. The support we are delivering for our customers is ensuring the cannabis market can continue to thrive and the solutions we are finding will have an impact that far outlasts the current challenges.
If you would like to know more about how we can help your brand navigate the supply chain challenges – or need a packaging miracle – please get in touch.
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