Sustainability Focus Broadens

Demand for conscientious business practices and pending producer responsibility regs attract attention.

Producers of cannabis products reflect the natural product they market and consumer demands by focusing on sustainable packaging and practices. At the same time, they must address regulatory and shelf-life requirements as well as meet the needs of an array of consumption methods such as smoking, vaporizing, edibles, tinctures, topicals, dabbing, beverages, and capsules (1).

So, it’s no surprise sustainability was identified as one of the primary concerns at the Top to Top Summit, a meeting of end users and suppliers of packaging and processing technologies convened by PMMI, The Association for Packaging and Processing Technologies. in March 2023. The resulting report, Sustainability and Technology – the Future of Packaging and Processing, published in May 2023 by PMMI Business Intelligence, a division of PMMI, also features segments about digitalization and workforce and technology.

On the sustainability front, focus is broadening beyond packaging, waste reduction, and smaller carbon footprints to emphasize more holistic corporate environmental, social, and governance (ESG) strategies. Cannabis manufacturers not only need to integrate ESG strategies into corporate policy but also prepare for looming regulatory requirements related to extended producer responsibility (EPR), which requires product producers to fund the collection, recycling, and management of packaging waste.

Although EPR started in Germany about 40 years ago and is well-established in many countries, it’s in its infancy in the U.S. where as of mid-2023 only four states, California, Colorado, Maine, and Oregon, had enacted EPR regulations. However, many states are considering legislation, and bills have been introduced in Congress. Despite this activity, a lot of companies have not given much thought about how EPR legislation might affect their business. Those that are examining the impact of EPR rules are considering the effects on efficiency/throughput and the possible increase in costs with reuse/refill targets. Costs and ensuring compliance from third-party providers also are concerns. According to the PMMI report, “Some participants noted post-consumer recycled (PCR) content and recyclable materials will become more important in the future, and pointed to potentially positive outcomes from EPR regulations, such as working more collaboratively with industry partners and customers.”

Many executives, who participated in the Top to Top Summit, are hoping national EPR legislation will be enacted so they don’t need to comply with a patchwork of differing requirements. In addition, to harmonization and standardization, successful implementation of EPR schemes will require consumer education and industry collaboration, plus the development of infrastructure for economical collection and reprocessing as well as markets for recycled materials. More than half of those present (51%) chose early collaboration about new materials as the one thing they can do to prepare for EPR, followed by understanding the laws and consequences of non-compliance, assessing the impact of technology and material choices, and collecting data to demonstrate improvements. Meeting EPR goals also will require balancing product safety with the use of more sustainable materials to ensure product purity and shelf life are not negatively affected.

ESG initiatives involve a broader view that looks beyond sustainability, energy savings, and waste reduction to encompass ethical corporate governance, support of a circular economy, climate protection, and social responsibility. Although some companies, especially larger organizations, have embraced ESG initiatives, it’s not uncommon to find firms that have not begun to formulate a strategy or are just beginning to do so. However, according to the report, companies with ESG programs reap significant benefits, such as diverting tons of plastic waste from landfills, saving energy and slashing energy costs, improving productivity, and increasing profits.

Many tactics are used to achieve ESG goals. The most popular option among survey respondents was implementing new equipment to enable a change to a more sustainable packaging format (41%), followed by minimizing truck transport (34%), implementing renewable energy (37%), and reducing corrugate waste (20%). ESG commitments also include considering end-of-life disposal when designing new packaging and joining efforts such as the Amazon Climate Pledge.

Conclusion

Producers of cannabis products continue to pursue more sustainable paths including transitioning to packaging that contains renewable, recyclable, and/or recycled content; implementing sustainable processes and machines; lightweighting and source reduction; and adopting innovations that reduce carbon footprint. As companies grow, it’s increasingly important to consider the ESG aspects of all decisions and prepare for the expansion in EPR regulations.