Marijuana Business Magazine April 2019

Marijuana Business Magazine | April 2019 96 That’s because a lot of times either Chinese or U.S. companies may be dealing from both sides of the table, so to speak. A Chinese vendor could take an order from a U.S. vape cartridge business for thousands of empty cartridges bearing a company logo and then just produce extras of the same order and sell them online via Alibaba or or some other internet market, thereby doubling their profit. A similar option is to employ distributors or other supply-chain checks, said Todd Kleperis, the CEO of California-based distributor Hardcar, whose employees are constantly on the lookout for counterfeit goods in California shops. “We have an actual program called Agent Recon, where our agents are in the stores, and they’re just checking to make sure our clients are protect- ed from things like (counterfeiting),” Kleperis said. “Our guys know what our products look like, and they’re not going to be in our stores. But they’re going to be in other stores, black-market stores,” checking the inventory for knockoffs. Be Aggressive If You Find a Counterfeiter Kogan and Lee agreed that if a company determines the identity of a retailer or distributor that’s selling counterfeit marijuana goods, a natural course of action would first be a cease-and-desist letter. If that doesn’t work, follow up with an aggressive lawsuit. “Provided that the original source— the manufacturer—is fully vetted and clean, then we look at distribution routes to see if there are outside actors that might be making counterfeit products,” Lee said. “So, what we do is go bust the counterfeiters, sue them and determine where they bought the product.” “If you don’t have that [state] protection and you’re just a private citizen, then you’re really just left with the strategy of a lawsuit. And how do you sue a ghost?” — Gavin Kogan, general counsel at Grupo Flor Disposable vape pens from El Gallo Labs are protected by tamper-evident hologram seals from AuthentiBrand. Courtesy Photo