🔒CT’s first cannabis packaging business launches; its challenges include not enough companies knowing it exists

At Connecticut’s only dedicated cannabis packaging facility, expensive equipment stands at the ready, waiting for customers. “We feel like there’s not enough companies that know we’re here and that we have this service that we can provide to them,” said Vito Famiglietti, the co-founder and chief operating officer of Dutch Packaging. Dutch is housed in the pristine, remodeled interior of a 4,500-square-foot, former light manufacturing shop in Torrington, where the three founders have invested $1 million and eight months in bringing the building up to the standards demanded of a cannabis-handling facility in Connecticut, and fitting it out with the latest automated equipment. “All the little nuances of the building were very important because you can see what happens if you don’t take care of product post-harvest,” Famiglietti said. “You can have a good product, and depending on how you handle it downstream, it could become a subpar product.” What Dutch is hoping to spark is the kind of transformation of Connecticut’s cannabis industry that’s happening in other states where the supply chain is becoming professionalized and specialized. A recent report estimated the cannabis packaging market to be worth $1.36 billion in 2023 and forecast that it would expand at a compound annual growth rate of 28.9% from 2024 to 2030. Dutch was one of six companies in Connecticut issued a provisional license for packaging services back in 2022, but it remains the only one that has completed all the steps to achieve an active license and functioning business. The three founders, all from Morris, which is considered to be in a disproportionately impacted area, hold a social equity license. The facility passed its final inspection from the state Department of Consumer Protection in January.

Manufacturing extension

In the interim, Famiglietti and his co-founders, CEO George Kingsley and Chief Financial Officer Tyler O’Hazo had realized how limiting the terms of their original packaging license would be. Kingsley spent time up at the Capitol during the 2024 legislative session, lobbying for a clause in that year’s cannabis legislation that would allow them to add a manufacturing “extension” to their license. “As a company, we had to make very critical and costly decisions before we knew we had that relief,” said O’Hazo. “Signing a lease, starting to build out a property, knowing that we might not get the legislative fix and we’re stuck. It was a big risk for us to do that. But, we were committed to the industry, and we wanted to do it.” With that change in the legislation, Dutch is now set up to do everything in between the cutting down of the plant and its arrival on retail shelves, including weighing, jarring, packaging and labeling. The manufacturing part of their license allows them to register brands and process and create products like prerolls and vapes. The facility also meets food-safe standards. “If somebody’s producing gummies or chocolates, we’d be happy to package them and label them for them,” said Kingsley, the CEO. “If there’s a brand that needs to be produced in Connecticut, we could register their brand and we could bring their product to market.”

Precious real estate

So far, the startup company, which has taken on one employee, has a single customer, with another expected to come on soon. But Dutch Packaging has capacity for a lot more. One challenge is the limited customer base in Connecticut. There are currently only six full-size cultivation facilities (with a minimum of 15,000 square feet of grow space) operating in the state, including four that were up and running before Connecticut legalized the recreational use of cannabis. “A lot of it is the original cultivators, they were doing all this in-house because we didn’t exist,” said Kingsley. “Their return on investment to outsource these particular processes to us, versus doing (it) in-house, would make more sense.” That’s the value proposition they’re pitching to cultivators around the state. Why give over precious real estate in a grow facility to packaging equipment that will be used only intermittently, when they could use that space to grow more plants, and let Dutch do their processing?

In particular, they have their eye on the new microcultivation businesses that are increasingly coming online in the state. So far, there are six active microcultivation businesses, and two more with provisional licenses. “We’re trying to position ourselves to help the new guy, help the person that’s coming out,” Famiglietti said. “For smaller cultivators, it takes a lot of weight off of them.” “We have invested in automation and that’s one piece that answers the question, ‘well, why do we need you to do it?’” O’Hazo said. “Because we’ve invested in this automation, we’re able to create margins that make this process less expensive.” As they were developing the business, the three teamed up with a processing facility in northern Michigan called The Lab, which offers white label, co-packing and distribution services in that state. Training with The Lab allowed them to adopt its systems automation processes, particularly for pre-roll production. “So, we’re ​able ​to ​hit ​the ​ground ​running ​here ​knowing ​exactly ​how ​to ​do ​it ​the ​best ​and ​most ​efficient ​way,” O’Hazo said. All three of the founders have other businesses. Kingsley developed and owns gyms and sells exercise equipment; O’Hazo is a real estate agent and appraiser; and Famiglietti is a farrier. He also is the only one of the three with previous experience in the cannabis business — he owns an outdoor cannabis farm in Vermont. The three put in most of the capital for the launch of the business. They have one minor investor, and were also the first company in Connecticut to benefit from a loan from the state’s revolving loan fund for social equity licensees. They received a $500,000 loan in January as their license was finalized. “It ​gives ​us ​additional ​freedom ​on ​making ​decisions ​for ​sure,” Kingsley said of their investment. “​But, ​it ​also ​gives ​additional ​pressure ​and ​​weight ​to ​those ​decisions ​because ​it’s ​all ​our ​risk.”