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Business of Cannabis

How All Businesses Can Learn From the Cannabis Industry’s Tracing to a Greener Future

Photo: Courtesy of Matthew Brodeur

Steve Everly

Group Event Director, Cannabis Packaging Summit, Informa Markets

The cannabis industry has made major gains in making supply chain operations more transparent and sustainable thanks to seed-to-sale smart tracking.

The global legal marijuana market size reached a value of $24.6 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 14.3 percent from 2021 to 2028. It will take billions in investment capital to reach this level. Environmental, social, and governance (ESG) factors are now the three keys to securing these levels of investment dollars from institutional and individual investors alike, and it starts with laser focus on a company and its product’s environmental sustainability.

Unfortunately, while the cannabis industry continues to experience unprecedented growth, it has not been a leader in sustainability. Cannabis packaging accounts for a tremendous amount of waste ending up in landfills each year. Past data estimates 10,000 tons of packaging waste was generated by cannabis sales in the first year of legalization in Canada alone.

But as the industry works toward a greener future, there is a key innovation being implemented in cannabis packaging that all industries should consider — making supply chain operations more transparent.

Protecting the environment and making products sustainable requires companies to have full control and transparency over their supply chains, from product design to manufacturing processes and distribution channels. Unfortunately, supply chains are complex. According to Geodis’ 2017 Supply Chain Worldwide Survey, only 6 percent of CPOs surveyed said they have “full transparency” of their entire supply chain. Given companies’ need to analyze their supply chain data in order to make decisions to enhance sustainability, such lack of information prevents those industries from meeting and setting sustainability goals. 

Cannabis has been one of the first to broadly leverage traceable packaging techniques and technology throughout the industry. In an effort to combat illicit competition from underground sellers, most states that have legalized cannabis have adopted radio frequency identification (RFID) tagging. These tags track the entire process from seed-to-sale. The process starts by inserting a blue barcode in the soil with a tag containing a microchip with a serial number. As the plant grows, the tag is placed on a branch. Then a sticker is placed on the cannabis product’s packaging before shipment to stores.

This seed-to-sale technology ensures controlled and consistent production, but smart tags can also be used to validate and ensure that sustainable and responsible practices were used every step of the way. Environmentally-friendly measures may include lowering energy consumption and water use and implementing effective waste disposal, all of which can be traced through seed-to-sale tracking.

As we all look to a greener future, companies across industries will be held accountable for their environmental footprints. As sustainable business practices increasingly influence consumer spending habits and investors’ decisions, significant competitive advantages are available to those businesses that strategically implement environmental sustainability efforts in the design, manufacture, and sale of their products.

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