White Label Cannabis Packaging | What To Know
Many companies are utilizing white labeling to enter the cannabis market. Many brands are using white-label branding because of the difficulty and expense of getting cannabis licenses.
A common commercial technique which is known as "white labeling" involves the production of a product by one company but having it packaged and branded to look like it was made by another.
For instance, a large number of items offered under the 365 brands at Whole Foods Market were not even produced by Whole Foods. Instead, the large grocery chain contracts with a number of businesses to manufacture the goods that Whole Foods markets under the 365 brands. We'll examine the specific advantages of white labeling for the cannabis industry in this article.
What Is White Labeling?
White labeling, hence the term "white label," is the process of swapping out one product or service's trademark and emblem with another. Large, established corporations frequently engage in this transaction, but it's also growing increasingly prevalent in the cannabis industry as organizations look for ways to get past the challenging production process of cannabis.
Therefore, when you visit your preferred upmarket dispensary, the budtender delivers you their own Mint Chocolate Chip flower that is packed in a special dispensary bag. You might be shocked to learn that the flower being offered has absolutely nothing to do with your preferred dispensary. The product the budtender is selling has a white label, but it might also be the one on the shelf next to it that is sold in its own packaging for a greater price.
Cannabis producers use this as an opportunity to sell their products to bigger companies, even if that involves branding and packaging their goods under a new name.
Private labeling is another idea. White labeling and private labeling are nearly identical. With white labeling, the maker sent his flower to dozens of different dispensaries, which is the primary distinction. However, the flower with a private label was made just for your preferred dispensary.
No matter the kind of cannabis packaging that you decide to use, be it Mylar bags, pre-roll boxes, ceramic/disposable vape cartridges, or jars, you can still opt for white labeling.
What Benefits Does White Labeling Have for the Cannabis Industry?
Due to license costs, the amount of working capital required, capital expenditures, and many other factors, entering the cannabis sector is typically both a time-consuming and expensive process. Why is this happening, exactly? There are a lot of red tapes you'll have to get through before starting a business because the cannabis market is heavily regulated. White labeling can be useful in this situation. When you white label cannabis items, you may save your beginning expenses and quickly test your ideas before committing all of your resources to the cannabis market. By making an investment in white labeling, you can lower your company risk by demonstrating your successful concept to potential investors first. From there, you may select with ease if you want to extend your product line, bring manufacturing in-house, or receive full funding.
If you've been researching cannabis white labeling, you might have found that you're not the only one. Only the most distinctive, smart, or big-picture businesses will have a chance at working with a white-label service because there are so many entrepreneurs wanting to sell their ideas to white labelers. As a result, this is a competitive market in and of itself. Before sending it to a manufacturer, make sure you have a precise model of the kind of product, brand, and marketing you want to use because you will be developing an intellectual property license agreement with your vendor. We advise business owners with original concepts to consider filing design patents and structuring their intellectual property as an LLC. Get the producer or operator fired up about your original idea or offering while demonstrating the benefits of partnering with you.
You might have been wondering what this means for the cannabis sector. Simply said, a lot. Let's examine the principal advantages of white labeling in the cannabis sector.
You'll quickly realize how expensive it is to launch a cannabis business when you begin to break into the cannabis sector. Permits, rent, product cost, salary, utilities, and so forth. Everything adds up very quickly. Additionally, you must invest money in marketing and promotion as well as time and effort promoting your product to dispensaries. If a new cannabis manufacturer immediately adopts the white label strategy, many marketing, and financial problems can be resolved. There's no need to design your own packaging or spend a lot of money on web marketing. White labeling also gives you a chance to network within the sector and showcase your brand to merchants. You will eventually determine what sells the best and what doesn't. It won't take a long time for you to start receiving some income flow and to have enough money to expand your business. Following that, you might begin making investments in creating your own brand. By then, you will also have a strong business concept that you can present to potential investors with confidence.
Very few, if any, team members must be involved in the production process because the business does not need to be on-site for the manufacture or manufacturing of marijuana. With lower overhead, businesses don't need to maintain machinery, hire more staff, or rent out bigger offices. In other words, money is saved.
In addition, many operational expenses for cannabis enterprises are not tax-deductible. Therefore, not all of the costs incurred by the business in producing the product are deducted from the income on the tax return. COGS, or the price you paid for your product, is always deductible, though. Therefore, the full cost of white-labeled goods purchased by a retailer is deductible. However, some of the operational expenses won't be tax deductible if the store decides to build its own brand, which will raise taxes.
White labeling allows corporations to concentrate on other parts of building their business, such as marketing, research, and financial factors since they are not actually manufacturing the products. They can use their time to improve partnerships and teams, organize the distribution of products, refine fundamental principles, and do a variety of other things.
Licensed cannabis operators were previously permitted to produce and distribute cannabis products on behalf of unlicensed businesses (see Section 5032 of the new laws). According to the new regulation, licensed cannabis operators are not allowed to carry out any business operations "on behalf of, at the request of, or pursuant to a contract with any person that is not licensed under the Act." This implies that before entering into a deal, you should speak with a cannabis lawyer who can guide you through California's white-labeling laws.
How to Find the Right Cannabis Private Label Partner
The ideal private label partner should offer a broad range of licensing options and a wide range of services. Partners who can handle everything, including production, extraction, and packaging, can change course and scale up with your business as it expands. Transparency is an important consideration when looking for a cannabis private label partner.
There is no denying that getting started can be costly and time-consuming, regardless of whether your goal is to sell vape pens, sweets, herbal cigarettes, or other cannabis extract goods. White labeling may therefore be the best strategy for breaking into the burgeoning cannabis market.
At Creative Labz, we offer a wide range of cannabis packaging, including Mylar bags, glass jars, pre-roll cones, vape cartridges, and more. You can still trust us for your quality white label cannabis packaging.