The cannabis industry presents new business opportunities. Unfortunately, it also opens the door to counterfeiters trying to take advantage of the momentum. Without a doubt, fraudsters have every incentive they need, so how do you plan to safeguard your brand?
The short answer is to perform CBD product authentication via the versatile cannabis anti-counterfeit solutions from AlpVision. Here’s a look at the cannabis industry to show why now is the time for a new approach to anti-counterfeiting and what you can do about it too.
The cannabis industry at a glance – Slightly legal, yet full of business opportunities
At the time of this writing, the global cannabis industry is worth an estimated $28.26 billion in 2021, but it will grow into a $197 billion industry by 2028, according to a report by Fortune Business Insights. Regarding the pace of growth, forecasters foresee a compound annual growth rate as high as 32 percent; some projections anticipate a less dramatic CAGR, but the takeaway is still evident.
There’s a tremendous business opportunity to join an industry with a significantly higher annual growth rate than usual. Having said that, the question is this: what led up to this level of economic activity on a global scale? Indeed, the answer is as simple as the continued decriminalization and legalization of cannabis and cannabis-derived products like CBD and hemp worldwide.
More to the point, consumers are in the driver’s seat right now, and they will decide which direction the cannabis industry goes from here. Cannabis may be legal in certain states and countries, but that doesn’t mean every product originating from those areas is permitted.
Why would a consumer want to be sure that the cannabis they buy is legal?
Before the legalization of cannabis, consumers had no choice but to purchase illicit, potentially adulterated and laced, substances on the street. You don’t have to take a massive leap of faith to see how this can be a problem when it comes to the quality and safety of cannabis. Nevertheless, the idea behind legalization is that if you drag a black market out into the light, legitimate business opportunities will thrive, and consumers will ultimately benefit from a safer, higher-quality product.
On the other hand, consumers would absolutely want to be sure that the cannabis they purchase is legal because possession of concentrates and derivatives isn’t wholly risk-free despite legalization. The last thing you want is to be accused of distributing cannabis and CBD without a license and face criminal penalties for a crime you don’t even know you were committing.
In order to rightfully possess a cannabis-derived product, including something as small as a vape cartridge, you must purchase it from an approved and licensed dispensary or retailer. Otherwise, it’s no different than buying cannabis off the street and hoping that the product is legitimate and not adulterated in any way.
Consequences of counterfeit vape cartridges
Not so long ago, vape cartridges made international headlines for all the wrong reasons, especially since an increase in vaping coincided with sudden and unexpected health conditions and deaths. Just because a product comes with well-designed packaging in bright colors doesn’t mean that it’s automatically safe to consume. Still, unfortunately, many consumers have assumed that these products are always safe.
Making matters more complex, the problem wasn’t necessarily the cannabis oil inside the vape cartridge but rather with contaminants and residual toxins left behind during unsafe manufacturing processes. In short, this is still the situation to this day, which is why the industry at large needs more effective cannabis anti-counterfeit safeguards.
Types of counterfeit protections for cannabis and CBD products
Unfortunately, cannabis anti-counterfeit technology has its limits due to the various levels of regulatory oversight. Some parts of the US have strict licensing requirements for dispensaries and distributors, but you can’t say the same about every part of the world. That’s one reason why the time for new counterfeit protections is way overdue.
Con artists see the business opportunity as well, so they’re actively searching for ways to introduce fake or dangerously toxic products into the supply chain. Notwithstanding that situation, regulators have already tried a few strategies to thwart counterfeiting, and they haven’t been very successful at the end of the day.
Identifiable markings and warnings
The first anti-counterfeit measures in the cannabis industry were little more than printed labels with specific warnings as mandated by law. The idea was to keep these products away from children and also give consumers a way to determine whether or not a product is legal from end to end. You may not assume so, but illegal cannabis operations abound in areas where it’s actually legal to grow and distribute.
The crux of the problem is that not every business takes an ethical approach. There’s no way for the end-user to tell if a product is legitimate and legal; the two are mutually exclusive in the cannabis industry. Generally, statutes mandate that the packaging of a cannabis product be clear and obvious. You can’t bury vital information in the fine print, and you can’t put it all in a nutritional label either. That’s one reason why cannabis producers started to get creative with anti-counterfeiting protections.
Furthermore, regulators tried to use scratch-off codes, which ultimately failed to deliver and stop counterfeiting. Mainly, the problem was that this type of safeguard is only verifiable once, and fraudsters can easily fake them too. You have to actually verify the code if you want to determine whether or not a product is genuine, and many consumers simply choose not to follow up. The result was that fake items looked authentic, and genuine products looked fake if someone scratched off or damaged the code before purchasing.
Cannabis anti-counterfeit technology – A different way to fight back against cannabis industry fraud
Suppose consumers can’t tell whether or not your cannabis products are authentic. In that case, the damage to your company’s bottom line and brand can be significant, especially since more start-ups crowd the market every day. Ideally, you’d want to deploy a solution that’s both versatile and highly effective at identifying counterfeits that happen to reach the open market.
So, to safeguard brands in this budding industry, our complimentary solutions – Cryptoglyph and AlpVision Fingerprint – work together to provide the assurances you need to satisfy consumers’ expectations.
Cryptoglyph – Packaging and Label Protection
Cryptoglyph – our digital anti-counterfeiting technology – works well for packaging and labeling protection. In this case, it’s a cannabis-based CBD product. The general idea is to punch thousands of microscopic holes in areas of the authentication certificate that are incredibly difficult to forge. You could also decide to use Cryptoglyph to authenticate the QR code itself in addition to the packaging and labeling.
Either way, Cryptoglyph helps strengthen counterfeit safeguard and do it at a better cost when deployed at scale. Still, when combined with our AlpVision Fingerprint technology, Cryptoglyph is even better.
AlpVision Fingerprint – Physical Products Protection
When you need to identify fake CBD at the product level, AlpVision Fingerprint’s system is another authentication technology capable of spotting counterfeits before they reach consumers. The technology works by pinpointing intrinsic defects in the molds for plastic parts, and the solution then compares subsequent products to see whether or not they contain the same characteristics.
Essentially, the system is a clever way to create a verifiable signature that will also alert you when the software pinpoints inconsistencies. As such, this capability makes AlpVision Fingerprint ideal for plastic-molded products like vape pens and e-cigarettes.
Not only is AlpVision Fingerprint a powerful cannabis anti-counterfeit solution, but it also integrates well with Cryptoglyph to create a one-of-a-kind authentication system to stop fraudsters from plying their trade. Also, you can still offer consumers benefits like coupons without changing the entire product.
Are you curious to learn more about what our cannabis anti-counterfeit technology can do?
Click to download our new white paper to see how to choose the right anti-counterfeiting solution for your cannabis business.