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PUTTING THE“CAN” IN CANNABISOpportunities and Insights For Can Manufacturers
Rick Maturo
May 21st, 2020
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CANNABIS
MARIJUANA PLANT HEMP PLANT
CBD<0.3% / NO THCCBDTHC
Intoxicating / Non-Intoxicating Non-Intoxicating
TWO PLANTS. TWO INDUSTRIES. ONE GENUS.
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Legal Adult Use Legal Medicinal Use
Legal Adult Use
+ Active Retail
• Marijuana is still a federally illegal,
schedule I drug
• Fragmented market, limited reach
• No interstate commerce of products
• MSOs need operations in every
market they operate
• Recreational marijuana legal for
~30% of adults.
• 11 States + D.C. legal consumption
• 9 States have rec dispensaries, ME
and VT will join
• NY, NJ, CT, NH, PA likely to legalize
• COVID and Legislation could
accelerate growth
MARIJUANA: WHAT’S LEGAL? WHERE?
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HEMP-CBD: WHAT’S LEGAL? WHERE?• Hemp and all derivatives federally de-
scheduled Dec. ‘18 via Farm Bill
• Legal in all states with varying
conditions (e.g., <0.3% THC, Idaho
0% THC)
• Hemp now a commodity crop,
wholesale prices falling, acreage up
~28x from ‘16 to ’19
• Canadian LPs now investing heavily in
US Hemp-CBD market (e.g., Cronos =
Lord Jones; Aurora = Reliva; Canopy
= First & Free); some CPG brands in
the space / others exploring
• Looks good…but the FDA poses the
biggest barrier to growth and
existential threat
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Human Drugs
“… CBD product, … to diagnose, mitigate, treat, cure, or prevent
disease, is a drug…no approved OTC drugs containing CBD…“
Foods for Humans, Pets, and Other Animals
"not currently lawful to add CBD to human or animal food, …safety
concerns about the use of CBD in food."
Dietary Supplements
“…CBD products cannot lawfully be sold as dietary supplements"
Animal CBD
“…FDA has not approved, …CBD drugs for animals"
Cosmetics
“…topical product, …intended to affect the structure or function of
the body, or… for a therapeutic use…is a drug, even if it is also a
cosmetic,…must be approved as a new drug“
Vapes
"CBD-containing vape products…cannot be marketed without FDA-
approved drug applications"
Enforcement
"FDA intends to continue monitoring the marketplace,
and to initiate and expand appropriate compliance and
enforcement …continue taking action to address
violations…"
Future
"marketplace for CBD-containing products continues to
quickly evolve…critical that we protect consumers from
unsafe products…obtaining information to address
evidence gaps is essential and, to date, outside groups
have not provided the robust data and information
needed to fully inform potential paths forward.”
SUMMARY OF MARCH, 2020 FDA REPORT ON CBD FOR CONGRESS
CONTINUED FDA PROHIBITION DELAYS CHAIN FDMC RETAILER CBD
ADOPTION UNTIL AT LEAST Q4, 2020 – LIKELY LATER
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N=5,528
# M
AJO
R C
HA
IN S
TO
RE
S S
EL
LIN
G C
BD
FDA WARNS
CURALEAF
MCCONNEL FDA
90 / 120 DAY PLAN
& VAPING
DEATHS
COVID-19
SHELTER AT HOME
90 DAYS
PASS NO
FDA PLANFARM BILL
CVS ROLLS CBD
TO 800+
LOCATIONS
STAGNANT CHAIN BRICK & MORTAR MARKETPLACE LIMITS
CONSUMER AWARENESS OF CBD
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Source: Nielsen CannaUse (US) 2020 | N=27,974 Adults
Pain Management
Holistic Health
Habit Breaking
Experience Enhancement
Socialization
THC-Dom Marijuana
CBD-Dom Products
CANNABIS DOES NOT COMPETE IN A VACCUM
THC-
Dominant
Marijuana
Relaxation
Mood
Enhancement
Sleep
Mental Health
Chronic Pain
CBD-
Dominant
Marijuana
Sleep
Relaxation
Chronic Pain
Temporary Pain
Mental Health
Hemp-Derived
CBD
Sleep
Chronic Pain
Temporary Pain
Relaxation
Mental Health
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WHAT’S COMING FOR CANNABIS POST-COVID
• Marijuana - More states to legalize recreational usage
• SAFE Banking Act
• Marijuana - Federal De-schedule (MORE ACT) or STATES ACT Route?
• Hemp-CBD - FDA approval of ingestible products? HR5587?
• Acceleration of DTC / online sales of Hemp-CBD
(if no FDA / Legislative action)
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LEGAL MARIJUANA $11B+
HEMP-DERIVED CBD $1.3B
>>
Consumption up 16%
from Q3’ vs. Q4’ ‘19
Source: Nielsen CannaUse Study (US) 2019
2019 US SALES
Cannabinoid-
containing product
sales exceed $12B
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LEGAL MARIJUANA $35B
HEMP-DERIVED CBD $6B
>>
Legal cannabis
sales to reach
$41B by 2025
2025 US SALES
FORECAST
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2025 CATEGORY
SHARE
HEMP-CBD TO SOURCE >1/4 OF DOLLARS FROM
STRONG CAN PACKAGING CATEGORIES
35%
26%
11%10%9%6%
3%
OTCBeveragesInhalablesFoodBeauty &Personal
Care
Candy &Gum
Dog andCat
HEMP-DERIVED CBD $6B
Source: Nielsen Thinking Beyond the Buzz CBD Study (US) 2019
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WHERE ARE KEY CAN FORMATS TODAY?
HOW WILL THEY GROW?
Hemp-CBD THC-DOM Marijuana CBD-DOM Marijuana
Current
Usage %
Future
Usage %
Growth
%
Current
Usage %
Future
Usage %
Growth
%
Current
Usage %
Future
Usage %
Growth
%
Beverages 5% 24% 5.13x 5% 20% 4.09x 3% 22% 7.68x
Edibles 8% 28% 3.59x 10% 24% 2.32x 6% 27% 4.72x
Pre-Rolls 4% 16% 3.65x 8% 19% 2.31x 4% 17% 4.43x
Vapes 4% 13% 3.07x 7% 14% 1.96x 4% 13% 3.33x
Flower 5% 18% 3.50x 9% 20% 2.10x 5% 19% 4.04x
Source: Nielsen CannaUse Study (US) 2019; *Among Total US adults
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WHAT TYPES OF CONTAINERS ARE LEADING IN NIELSEN-
TRACKED CENSUS FDC CHANNELS?
DOLLAR SHARE
CONTAINER TYPE52 WK END
05/02/20
52 WK END
05/04/19
52 WK END
05/02/20
52 WK END
05/04/19
ALUMINUM $276,949 $27,050 53.20% 14.60%
GLASS $48,242 $16,986 9.30% 9.20%
PLASTIC $194,928 $141,252 37.50% 76.20%
Beverage Total $520,118 $185,287 100.00% 100.00%
Total CBD $25,217,818 $2,773,177 GROWTH = 9X
Beverage % of Total CBD 2.10% 6.70%
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WHAT CAN WE EXPECT FOR “CAN-READY” HEMP-
CBD CATEGORIES?
Segment 2020 2025
Total Hemp-Derived CBD Products $1.7BN - $2.0BN $6.0BN - $7.0BN Growth Drivers
CBD Beverages $175MM-$200MM $1.5BN - $2.0BNRTD Infused Waters, Teas, Coffees,
Energy Drinks, Fruit Juices, Powder Mix
CBD Edibles (incl. gummies) $75MM - $100MM $1.0BN - $1.25BN Gummies, Nutritional Bars,
CBD Flower / Buds $35MM - $40MM $125MM - $150MMHigh-Bio Availability, Fast-acting Effects,
Nicotine / Tobacco Cessation
CBD Pre-rolls $35MM -$40MM $125MM - $150MMHigh-Bio Availability, Fast-acting Effects,
Nicotine / Tobacco Cessation
CBD Vape Products $75MM - $100MM $300MM - $350MMHigh-Bio Availability, Fast-acting Effects,
Nicotine / Tobacco Cessation
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Source: Nielsen CannaUse (US) 2019
18%
52%
% HAVE
CONSUMED
% LIKELY TO
CONSUME IN
NEXT
12 MONTHS
CONVERSION
34%
MORE THAN 1/3 OF U.S.
ADULTS PLAN ON USING HEMP
CBD IN THE NEXT 12 MONTHS…
…BUT 48% OF WOULD-BE
CBD USERS HAVE YET TO
EVEN TRY HEMP-CBD
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OPPORTUNITIES FOR CANS: BEVERAGES
• Familiarity, Ease of Use
• Seamless integration into daily beverage routine
• Wide assortment of flavor, function, and potencies for various needs and
occasions
• Broader appeal than inhalable formats – especially for lifestyle and generalist
users
*Note: the FDA does not permit hemp-CBD as an ingredient in ingestible products. **Disclaimer: Brands and products displayed for illustrative purposes only.
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OPPORTUNITIES FOR CANS: BEYOND BEVERAGES
• Flower
• Pre-Rolls
• Edibles (Tins)
• Vape (Tins)
*Note: the FDA does not permit hemp-CBD as an ingredient in ingestible / inhalable products. **Disclaimer: Brands and products displayed for illustrative purposes only.
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WHY CANS FIT WITH CANNABIS – SUPERIOR BRANDING
• Differentiation among a sea of “like” products
• Connect and reach specific consumer segments
• 360° branding
*Note: the FDA does not permit hemp-CBD as an ingredient in ingestible products. **Disclaimer: Brands and products displayed for illustrative purposes only.
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WHY CANS FIT WITH CANNABIS – DURABILITY AND
PROTECTION
• Prevent damage during
transport, tamper proof
• Longer shelf-life at point
of sale or in storage
facility
Image 1 Source: https://www.nugistics.io/seed-to-sale-software/
END CONSUMER
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WHY CANS FIT WITH CANNABIS – PROTECT
PRODUCT INTEGRITY
• Preserve terpenes (flavor)
and flavonoids (color)
• Protect from cannabinoid
degradation pre-sale /
post-sale storage
• Nitrogen-filled / ready to fill
can application, create
hermetically sealed
5 ENEMIES OF USABLE
CANNABIS & EXTRACTS
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WHY CANS FIT WITH CANNABIS:
MAKE A “GREEN” INDUSTRY “GREENER”
“…packaging used by cannabis producers includes can use as much
as 40.5 grams of plastic to secure a single one-gram joint.”
.
**Disclaimer: Brands and products displayed or mentioned are for illustrative purposes only.
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OTHER CAN CONSIDERATIONS LEGAL MARIJUANA AND HEMP
• Packaging laws vary by state - virtually all need to be child-proof
• Cans adhere to most laws, especially states requiring opaque packaging
• Most containers need to be resealable
• Some require multi-serve to have individual seal per serving (e.g., edibles)
• BPA-Free the norm, but need to ensure and call out in marketing to potential partners /
clients
• Laws for working with marijuana manufacturers vary by state….
best practice is to consult your legal counsel
• Hemp-CBD has few, if any packaging requirements…yet
**Disclaimer: Brands and products displayed or mentioned are for illustrative purposes only.
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KEY TAKEAWAYS
• Current FDA stance on hemp-CBD ingestibles, including beverages, is
impeding category growth (especially in mainstream FMCG retail)
• Hemp-CBD is a more direct route in the near term, but regulated marijuana
channel could have longer-term potential
• Beverages represent the best opportunity for cans in hemp-CBD and MJ
• Greatest $ share of hemp-CBD beverages sold already utilizing aluminum can
• But don’t overlook other formats beyond beverages
• Cans can provide superior protection, product quality, and positioning to the
cannabis industry – need to inform industry
• Rules and regulations around packaging vary significantly based on market –
always consult your legal counsel before diving in
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QUESTIONS?
RICK MATURO
847-529-6253
Still Canna-Curious? Reach me @
This artwork was created using Nielsen data.
Copyright © 2020 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.
