Marijuana Business Magazine February 2019

Marijuana Business Magazine | February 2019 94 The LCB paused its review process for 30 days starting Oct. 11, so a coa- lition of marijuana industry organiza- tions could bring forward alternatives for the agency to consider. The delay temporarily left Green Labs and other Washington producers in limbo. Green Labs, meanwhile, benefited from a spike in sales from customers who wanted edibles that were in jeopardy of being banned. The company reported sales of Sour Drops in October were 30% above what it projected for the month. After the ban was eliminated, sales of Sour Drops normalized at the nearly 200 Washington retailers where Green Labs products are sold. Competing in the New Landscape Green Labs hopes to gain new customers going forward with the introduction of different gummy products, but the company will need to rethink how it attracts customers. Swifts Edibles come in vibrant, colorful packaging that draw the eye to its truffles, mints and other prod- ucts. Only the company’s sugar-free, pressed mint tablets have a more muted, generic appearance. Going forward, Green Labs will be able to use only a tan, brown, white, cream, gray or black background on its packaging and three accent colors from a limited, approved color palette, per the new rules. The company will draw on the strength of its brand and work with budtenders and retailers to stand out and stay competitive after Washington’s new rules go into effect, offering training, samples and getting feedback. “I don’t think colors will be too big of a deal for consumers as long as they can still get the products they want,” McAulay said. “It would be the people who are unfamiliar with us that we’re not able to capture quite the same—the tourists or one-time, two-time buyers.” Business Strategies | Infused State Introduced Label Change Ahead of Crackdown on Candies Green Labs, the maker of Swifts Edibles, already was grappling with a major overhaul of product labels and packaging when Washington state regulators announced plans in October to phase out the sale of cannabis-infused gummies and hard candies. Washington’s Liquor and Cannabis Board (LCB) adopted the new labeling rules last May. One of the biggest changes included the introduction of a new universal symbol—a diamond-shaped logo with a marijuana leaf marked “21+”—as well as a seal that reads “Not for Kids” and lists the toll-free number to reach the National Capital Poison Center. These items were required on all packaging starting Jan. 1. State edibles manufacturers such as Green Labs are required to submit their packaging for review by state regulators. The LCB staff plans to notify companies whether the packaging complies with the new rules within 14 business days. “Every single product we have needs to be redesigned to accommodate these changes. And when you start looking at 100 SKUs, it’s certainly not cheap,” said Jordan McAulay, Green Labs’ sales director. According to McAulay, it could take dozens of hours of time and about $15,000 to overhaul Green Labs’ packaging in-house. Other companies outsourcing the work or hiring consultants could spend upward of $50,000. Green Labs’ products range from chocolate truffles and hard candies to honey and flavored smokable products branded as Dipped Infused Pre-rolls. Before the deadline extension, the company handled the new rules by tackling one product line at a time. For example, staffers redesigned all the packaging for its truffles, submitted the changes for review and then worked with third- party printers to get the new materials printed. The company followed the same process for another line until almost the entire product portfolio was ready for 2019. “We could drop everything we’re doing and just focus on getting that done all at once, or we could schedule it out, do it at pace and make sure we’re still keeping our eye on the ball from a revenue standpoint,” McAulay said. The design and printing phases took about two weeks each. The review process could be more variable—especially with Washington dealing with hundreds of reviews from manufacturers in the state. “We definitely intended to have it all done in-house by the end of the year, just so we didn’t have any lapse in sales,” McAulay said in October. “Our target was to have everything finished up by Nov. 1 and then tie up the loose ends.” Green Labs paused its redesign in October, when Washington’s LCB took a one-month break on reviewing cannabis-infused products and packaging while sorting out rules for edibles. In December, state regulators said marijuana manufacturers must limit the colors on their packaging to neutral backgrounds with up to three accent colors. Giving companies until 2020 to add new logos and meet the new color requirements gives Green Labs the opportunity to use the materials it’s already created, purchased and received. The company plans to use the time to once again methodically go through each of its product lines and redesign the packaging, get state approval, make purchase orders and introduce the new materials, McAulay said. – Adrian D. Garcia Washington infused product packaging must include these symbols. Courtesy Photo