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Using Packaging to Stop Fakes

CannVerify

Custom seals can include holograms, QR codes and scratch-off verification codes unique to the product. Photo Courtesy of CannVerify

Chinese manufacturers have been knocking off high-end products for years—think Louis Vuitton bags, Air Jordan sneakers and Rolex watches. Now, they’ve gone one step further: making counterfeit cannabis packaging that’s helping to bolster the illicit market.

Often, the counterfeit packaging looks so much like the real thing that consumers believe they’re purchasing a legitimate product that has been lab tested to comply with state laws such as those governing mold and pesticides.

To combat bogus packaging, many cannabis companies are turning to technologies such as radio frequency identification (RFID) tags and tamper-proof holograms and incorporating them into their packaging.

Brothers Vicken and Shant Jabourian, co-founders of the San Diego-based anti-counterfeiting and brand-protection company CannVerify, said that before they sell the company’s tamper-proof holographic seals with unique QR codes, they verify the business they are selling to is legitimate.

To avoid selling its seals to illegitimate businesses, CannVerify:

  • Confirms that emails come from an official company domain.
  • Checks the company’s license number against state records.
  • Asks to see the company’s physical product line and packaging.
  • Tracks where the products are sold.

Looks at social media to ensure the company has a history and is credible.

“The source for the fake packaging is China,” Vicken Jabourian said. “You have the manufacturers making packaging for legitimate businesses and counterfeiters asking to reproduce the packaging.”

 

Counterfeit Packaging a Problem

Counterfeit products aren’t the only problem for legitimate cannabis businesses.

“We have to do something about the counterfeit packaging that exists online,” said Andrew Kline, director of public policy at the National Cannabis Industry Association. “The other challenge is making sure people aren’t selling that kind of packaging with fake results at any trade shows, which is a little harder to police.”

Jordan Lams, founder and CEO of Long Beach, California-based multistate operator Moxie, said that before he sells gummies or flower to a retailer, he conducts rigorous background checks on the stores and ensures his custom packaging is difficult to duplicate. Moxie’s custom packaging includes multicolored tins for gummies, cardboard boxes with a see-through window as well as glass jars with gold tamper-evident seals for flower.

“It would be nearly impossible to replicate any of our products, and we ensure that through packaging,” Lams said. “It would take hundreds of thousands of dollars of investment for someone to rip it off. It’s too much of an investment to undertake.”

During the 2019 vape crisis, California-based KushCo Holdings entered an exclusive distribution agreement with De La Rue, a European provider of anti-counterfeiting and authentication solutions that prints more than 8 billion product-authentication labels annually. The partnership provides enhanced packaging with secure visual authentication technology using three-dimensional images, label tracking and data-capturing capabilities.

KushCo sells stickers with De La Rue technology to its packaging customers, allowing them to monitor where the package goes throughout the supply chain and ensure products do not enter the illicit market.