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Hippo Packaging Capitalizes on CBD Craze

In case you haven’t been following it, the market for products containing CBD—or cannabinoid derived from the hemp plant—is growing rapidly. It’s really only taken off in the U.S. since the approval of the 2018 Farm Bill legalized CBD extracted from industrial hemp with less than 0.3% THC, the psychoactive component of marijuana. Hippo Packaging in San Diego is focused on meeting the unique packaging needs for this emerging market segment.

By Cary Sherburne
Published: October 21, 2019

Hippo Packaging was founded about four years ago by industry veteran Kary Radestock. Radestock spent almost 20 years with R.R. Donnelley (beginning with Kelmscott Communications, which was acquired by Consolidated Graphics in 2005, which in turn was acquired by R.R. Donnelley in 2013). While at R.R. Donnelley, she became aware of the growing demand for specialty packaging in the cannabis market. “My die-cutting supplier told me that makers of cannabis products were the only ones really spending money on packaging,” she explains. “I didn’t think too much about it until I had five different people walk into the plant looking for packaging for cannabis vaping cartridges. Who walks into a packaging plant looking to order? That got my attention, and I tried to get R.R. Donnelley on board with a special project to investigate the market.”

Radestock wrote a business plan for the project, but in the end, R.R. Donnelley declined the opportunity since so much of the cannabis business was conducted in cash in those days, and the company’s banking processes simply were not set up to deal with cash businesses. “So two months shy of my 20th anniversary, I resigned from R.R. Donnelley, on February 28, 2016, and launched my new business on March 1st. It started as a sole proprietorship, and we have grown really fast. Today we are a virtual company with 20 team members and one of the fastest growing print packaging agencies in the business.”

About 50% of Hippo Packaging’s business is related to the cannabis industry, and the other 50% CBD and hemp. Radestock notes that it has not always been easy with a variety of different regulations in place in California, other states, and the Federal government. “But it’s also been a really incredible experience,” she adds.

Are Cannabis and Marijuana the Same Thing?

As a little bit of background, cannabis sativa, a member of the hemp family, is the name I knew marijuana by in the 60s (dating myself!). These days, however, there are a number of varietals that have been developed, one of which is the industrial hemp version that has 0.3% or less THC (tetrahydrocannabinol) and so is in compliance with the 2018 Farm Bill. The Hemp Farming Act of 2018 was proposed to remove hemp (defined as cannabis with less than 0.3% THC) from Schedule I controlled substances and making it an ordinary agricultural commodity. Its provisions were incorporated in the 2018 United States farm bill that became law on December 20, 2018.

So both hemp and marijuana are in the same family, but CBD isolate, the purest form of CBD (a white powder), is derived from the hemp varietal that complies with the Farm Bill requirements. According to Dr. Jeffrey Chen, Executive Director of the UCLA Cannabis Research Initiative in a recent TED Talk, “CBD is an under-investigated compound that has the potential to benefit many [health] conditions. While it does have side effects, it appears as if it could be a safer alternative to highly addictive drugs such as opioids or benzodiazepines. And thanks to a recent surge in research, we’ll be learning a lot more about its capabilities and limits in the next five years.”

Addressing Unique Cannabis Packaging Requirements

One of Radestock’s clients, Northern California-based Canna Bath Co., was a good case study of the special packaging requirements for cannabis-based products. Canna Bath had a plan to produce both THC and CBD bath bombs. “A challenge for us,” Radestock notes, “was figuring out how to package the THC bath bombs in child-resistant packaging, which is required by law for THC-based products. We want to protect kids, but we also want to be mindful of the environment, business models, and to not be wasteful with packaging.” The solution was to put the bath bombs inside a mylar bag to satisfy the child-resistant requirement. CBD products, on the other hand, can use mainstream packaging. “The only thing we need to be concerned about with CBD products,” Radestock adds, “is that you can’t make false health claims around CBD. The government is trying to figure out how to regulate CBD and is in the middle of a number of studies. But it is still a bit of a gray area and pretty much self-regulated at this point.” There is also a fair amount of non-governmental research into CBD as well, including the work of Dr. Chen at UCLA.

Hippo Packaging works hard to keep up with the current state of regulations of cannabis products in order to help its customers comply with regulations yet still take advantage of attractive, functional packaging that is as waste-free as possible. The company works as a branding consultant and design agency, and outsources printing to a number of printers, including R.R. Donnelley. She points out that for cannabis packaging, you have to do everything, including direct print on jars, labels, boxes, rigid boxes, child-resistant boxes, point of sale materials, and more. “It’s quite varied, and you have to have experts in each category,” she says. “In effect, we are a business processing outsource (BPO) company for mid-sized to large companies. Anyone purchasing a couple million dollars or more in packaging annually can afford a full-time person. But for smaller organizations, we take on that role and are their packaging partner.”

Radestock also notes that one of the reasons the CBD and hemp markets are growing so rapidly is that they don’t have to go through the expensive compliance, permitting, and licensing processes required for THC-based products. “It’s a good way to get into the business,” she says. “You have to have deep pockets to get into THC. But by starting with CBD, you can get your name and brand out, start building your supply chain, and getting people on board; and then eventually, you can fund the THC part of it.”

The bath bomb boxes for Canna Bath were printed on a offset press because they required a metallic ink. Six different versions were set up nicely on a press form for a total of 5,000 parent sheets and 30,000 boxes, according to Radestock. And she was able to keep costs down on the mylar bags for the THC version by creating flavor labels that were integrated into the artwork so only one bag run was required.

“Most of our work is digital because the cannabis and CBD companies are mostly startups and want to start with 5,000 or fewer units. However, you still have the die-cutting, folding, and gluing, which can make smaller digital runs expensive.” She points to the HP Indigo 20000 as a very good press for smaller packaging runs. “The bulk of our digital work runs on that press; it’s just right for quantities of 5,000 to 10,000. You need at least 20,000 to cost-effectively get on an offset press.” Other special treatments Hippo uses to increase the shelf appeal of packaging, including foils, soft touch finishes, spot UV, and special text and cover substrates. Although the company has structural design resources in house, its stable of suppliers is usually leveraged for this part of the design process. “If we don’t know who is going to have the best price in the end for production, we will do the structural design ourselves, giving us more flexibility in choosing a print supplier.” Hippo Packaging uses P3 Software to manage its internal processes, including quoting, vendor management, purchase orders and invoicing.

Radestock was named Cannabis Industry Woman of the Year in 2017 by CannaNews and has been a featured speaker at numerous industry events. “Whether it’s a new brand launch, a refresh, or an innovative packaging design,” Radestock concludes, “we approach each project with passion, professionalism and pride. Our industry expertise in the rapidly growing cannabis market provides significant value to our customers, whether they are start-ups or further along in the business development process.”

Over the next several months, WhatTheyThink and Printing Newswill be featuring more content on the cannabis market and the opportunities it provides for our readers, including the March issue of Printing News, in which this topic will be featured.

Cary Sherburne is a well-known author, journalist and marketing consultant whose practice is focused on marketing communications strategies for the printing and publishing industries.

Cary Sherburne is available for speaking engagements and consulting projects. To get more information contact us.

Please offer your feedback to Cary. She can be reached at cary@whattheythink.com.

 

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