When George Sadler, president of Platinum, a California-based cannabis product manufacturer that distributes products in both California and Michigan, started receiving messages on social media from its Michigan customers about vape cartridges not meeting their expectations, he suspected that counterfeits of the company’s products were being sold at unauthorized retailers, and he immediately started looking for ways to stay one step ahead of the counterfeiters.
“We started receiving stuff on social media saying, ‘Hey, I bought this cartridge [and] it doesn’t taste right. This isn’t a Platinum vape. What are you guys doing?’” Sadler told Cannabis Dispensary. “We … started to look around and started asking questions [like], ‘Where did you purchase this product?’ Then we realized, they were purchasing from stores that were not licensed and we had not done any distribution to. We had flown out there, and we started hitting these stores.”
Sadler’s main concern was consumer health. Generally, when cannabis products are counterfeited, untested product is produced on the illicit market and placed in an established cannabis brand’s packaging, which is duplicated and sold on illicit websites.
“You can actually go [online], type in ‘Platinum vapes,’ the packaging comes up, and you can purchase that packaging,” Sadler said. “Then it’s just a matter of getting some cheap, untested oil. … They don’t care what’s in it. They just fill it and know there’s a demand for it, and the stores that are not licensed have no issues with carrying that because it’s a selling point in their stores.”
These untested, counterfeit products, which could contain pesticides or other negative residuals, then end up in unknowing customers’ hands, which could be damaging for their health, as well as the brand’s reputation.
When Sadler discovered counterfeit Platinum products for sale in Michigan, he hired two full-time employees to check stores for knockoffs and report them to the state police. Law enforcement in turn created a task force that raided shops known to carry counterfeit products.
“It’s become a lot less in Michigan because Michigan doesn’t hold a very big unlicensed market, but it did, and it was extremely tough,” he said. “They were producing hundreds of thousands of cartridges a month.”
Counterfeiting is becoming more of an issue in Platinum’s home state of California, Sadler added, as the state has not been as strict with shutting down unlicensed retailers.
“People can then come in, duplicate what you’re doing, put it in the unlicensed stores, and then they make a profit, but you still have the issues of having uncontrolled material, unlicensed and untested, out for consumers to get,” he said. “We just do our best to make sure that if anything is out there with our name on it, it’s something that’s come through our facility … and we understand where it’s at.”
To further its anti-counterfeiting efforts, Platinum recently partnered with Label Impressions, Inc., a packaging and labeling provider, and NeuroTags, a solution for counterfeiting protection, consumer loyalty and marketing, and supply chain visibility, to add NeuroTags QR codes to all of its packaging.
A customer can scan the code with their smartphone’s camera and pull up information about the product to verify its authenticity, such as the test results, where the product was manufactured and the date it was manufactured.
“That was our big thing, to allow the consumer to… know that what they’ve purchased is authentic, that it’s been tested,” Sadler said.
The code also provides access to exclusive videos about the product, and Platinum also plans to include a separate QR code on its packaging to allow customers to access its loyalty program.
“There’s another scratch-off QR code for our incentive program … that allows you to redeem points for free merchandise from Platinum Vape,” Sadler said. “There are just a bunch of things that you can purchase with points … —everything from bikes, backpacks, skateboards [and] hats.”
Platinum plans to launch its QR codes by the end of the month, and Sadler hopes the company’s approach to anti-counterfeiting measures will set a precedent for other brands.
“Security has become one of the forefronts of what needs to take place to move forward, and the unfortunate side of the … unlicensed market is that it’s thriving and it’s continued to put people in a bad position,” he said. “The nice thing about Label Impressions is the fact that you can take it into your own hands … and be able to directly look at that product via that system and know that yes, this is an authentic product."