Buyers watch out – product fraud is alive and well in the cannabis industry
It has been pretty clear in recent years that not everyone was in the cannabis business building a thriving new cash crop industry. The stories of startups making claims of growth and revenue, attracting investors, and then getting out with millions of illicit profits have become part of the early history of this industry. Business fraud seems almost endemic right now.
Earlier editions of supposedly synthetic cannabinoid products sold at truck stops that were actually a green, flaky substance sprayed with a chemical that caused restlessness and hallucinations were really the first cases of product fraud.
In 2019, the vaping crisis hit the industry, where research found there were groups of people packing oils in cartridges that were actually cut with a substance that turned into tar in the user’s lungs.
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Bootleggers continued to sell and sell counterfeit oil cartridge products filled with questionable oils using packaging from legitimate manufacturers such as:Kingpen,Heavy racket, andThanks to vapes. Dank Vapes is a vape cartridge seller and empty cartridge wholesalernamed by the CDC in their investigation as one of the vape culprits responsible for the outbreak.
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Making cannabis oils isn’t that difficult. Many early oil manufacturers and extractors did this in their kitchens before cannabis was legalized. The batch is stretched by diluting it with a chemical additive.
It’s also pretty easy to make the product look like an official industry compliant product. Just go tolabelvalue.com. There, you will see a number of alleged California Proposition 64 approval or warning labels that anyone can buy and stick on a package. No government license is required, just an Amazon account. Or go to instocklabels.com and you can purchase state compliant labels for eight other states.
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Anyone can buy these labels. Some say Indica or Sativa, or allow you to check a box for Indica or Sativa. For some you can fill in a field for the THC level andFill in another field for the name of the tribe.
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Hey, it’s legitimate. A brief disclaimer at the bottom of the page (“Note: LabelValue is not responsible for compliance with labeling guidelines or regulations for line-of-business applications. Please ensure that your use of labels complies with the regulations in your industry.”) Allegedly receives the label printer dated Hook.
And there we go – a legitimate looking cannabis product straight from the pharmacy that some guy put together in his basement and that contains who-knows-what.
If you’re a somewhat challenged pharmacy owner and sales are declining, do you hear Blue Dream is a top seller in the region? No problem. Just write “Blue Dream” in the variety label box, stick it on a bottle, drop off the varieties you need to move and sell.
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For sure,California Cannabis Labeling Act is pretty specific about what should and shouldn’t be on the label, and even describes the point size of the copy. But they can only do so much against the thousands of bad players in the state.
In contrast,Oklahoma’s labeling laws are pretty easy. Labeling models have a low priority for this state.
You, the buyer, need to be on your guard. Don’t buy from a guy at a party or a guy in the local fraternity house. There are many legitimate operators who actually want to help the industry overcome these growing problems, develop good and safe products, and knock down the illegal market. It just takes time. And due diligence.