So this is what I did. I went and got a piece of fun foam at the craft store approx. 10 cents. I made a spacer about one inch wide and how ever long your paper bag is i think mine is 5 1/2". I placed my holes according to the template and punched them out of the foam.
Voila a spacer.
Put one foam spacer after each paper bag. except the last one. It gives you a little more room for embellishments and fun things to stick on.