To that end, FunkSac partnered with Atlapac Corp., a contract converter of premade packaging based in Columbus, Ohio.
“FunkGuard was tested by an ISO 17025 accredited facility and meets the standards set for child-resistance by Title 16 CFR 1700 of the Poison Prevention Packaging Act, as well as being listed on the next release of the ASTM D3475 index,” says Garett Fortune, CEO of FunkSac. “The pouch is also approved for use with food grade materials. FunkGuard can be used as a primary package or as an exit bag, wherein primary packages are placed into a larger FunkGuard pouch before leaving a dispensary in order to comply with individual state regulations.”
“We launched FunkGuard to provide a best of breed flexible packaging solution to the cannabis industry,” Fortune says. “FunkGuard can be used to package many different forms of product, including edibles, which are particularly dangerous if in the wrong hands. No solution is child proof, but FunkGuard is a great deterrent for kids and easy enough for adults, which is a tricky balance.”
“The design is both high-tech and intuitive,” adds Paul Unrue, Atlapac’s vice president of sales and marketing. “The design is intuitive because it works very simply but is very technical in its operation. It appears the Child-Guard slides open when slid across. But it won’t open the package unless you plunge the slider into the pouch. So it’s extremely difficult for a child to open, yet very easy for an adult to do so.”
Child-proof packaging could become a requirement in California, Carella predicts. “At Auntie Dolores we use a lot of plastic, heat seals, and additional materials to keep kids out,” she notes.
Constraints Surrounding Distribution
Auntie Dolores edibles are sold in more than 250 of the estimated 2,000 licensed dispensaries throughout California.
“Because we are organized as a not-for-profit mutually beneficial cooperative and have medical cannabis patients in our cooperative, we are able to provide goods and services to these members, including via the Internet, provided that they carry the proper documentation and identification,” Carella says.
In an arrangement that may seem confusing to industry outsiders, the company is legally allowed to sell Auntie Dolores products in any legal medical cannabis or adult use state through partnerships with entities that are licensed to produce and process cannabis in their state. Those partners are responsible for their own state and federal taxes.
“No Auntie Dolores product can be shipped across state lines but rather the brand is licensed as intellectual property to licensee partners who hold the proper license to produce edibles in their state,” Carella explains. “The licensees can make THC-based edibles with our proprietary specs and recipes, and then sell them with our label. Per our contract, they pay us a percentage of the revenues of anything they sell.”
“Our parent company is a California corporation and we file state and federal returns in California,” Carella adds. “We don’t have any revenues from licensees yet, but essentially any licensing revenues would be reported on our return.”
Evolving Cannabis Use Laws
In 1996, California voters passed Proposition 215, making the Golden State the first in the union to allow for the medical use of marijuana. While marijuana remains illegal federally, a total of 23 states, the District of Columbia and Guam now allow for comprehensive public medical marijuana and cannabis programs, as of Nov. 9, 2015. (Of these states, 14 reportedly had active retail markets in 2014.) Recently approved efforts in 17 states allow use of “low THC, high CBD” products for medical reasons in limited situations or as a legal defense. (Those programs are not counted as comprehensive medical marijuana programs.)