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.

RELATED: Counterfeiting in Cannabis: How to Protect Your Brand

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.”

RELATED: Platinum Takes Control of Its Branding Through Store-Within-a-Store Concept

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.”

Photo courtesy of Platinum

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.

RELATED: Platinum Donates to Charitable Causes with Specially Branded Product Line

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."

An audit of the Minnesota Health Department’s controls and compliance has revealed several ways that the state’s medical cannabis program is not being correctly monitored, according to a Duluth News Tribune report.

The Office of the Legislative Auditor, the state’s legislative watchdog, examined the program’s operations from July 2016 through December 2018, the news outlet reported, and found the following issues:

• Failure to verify new patients’ doctors were licensed and in good standing;
• Poor record-keeping for parent and guardian eligibility for the program;
• Problems with oversight of patient fees collected by the state;
• Inadequate oversight of cannabis manufacturers, including failure to adequately track and test the drug prior to sale; and
• Too few controls to detect loss of medical cannabis by the manufacturer.

The audit did not include an evaluation of Minnesota’s two licensed medical cannabis operators, LeafLine Labs and Minnesota Medical Solutions, the Duluth News Tribune reported.

Department of Health Commissioner Jan Malcolm submitted a response to the audit, indicating that health officials agree with the findings and that they have made efforts throughout the past year to improve their oversight of the program, and that further improvements may require legislative action, according to the news outlet.

Minnesota lawmakers approved a medical cannabis law in 2014, and the program now has roughly 17,000 patients, according to the Duluth News Tribune.

The state has an extract-only cannabis market—smokable flower is prohibited—and has experienced slow growth, in part due to the high costs associated with producing cannabis extracts. Heading into the 2020 legislative session, the state’s medical cannabis businesses are advocating for the legalization of flower to make the program more affordable.

While such legislation has yet to be introduced, lawmakers are working on a proposal to legalize adult-use cannabis in the state after a similar proposal stalled in the Senate last spring.

Florida Sen. Jeff Brandes (R-Pinellas County) filed legislation Jan. 13 that would legalize adult-use cannabis in the state, according to a local NBC2 report.

The move comes after two political action committees suspended their efforts to get legalization initiatives on the state’s 2020 ballot.

The groups are now looking toward 2022 ballot initiatives, NBC2 reported, but Brandes hopes to legalize cannabis legislatively before then.

“We think the better place to have that conversation is through the legislative process and so in order to be able to do that you need a piece of legislation,” he told the news outlet.

Brandes’ bill aims to incorporate small businesses in an adult-use industry in the state, according to NBC2, and the legislation also includes expungement provisions for those convicted of simple cannabis possession.