New Emergency Regulation – QR Codes For Retailers

A Small Change in the Face of Enormous Need

By Kathi E. Finnerty, Esq.

On January 23, 2020, the Bureau of Cannabis Control published a proposed emergency regulation requiring retail cannabis store fronts and delivery companies to display QR codes for consumers that allow those consumers to instantly check the licensed status of the cannabis provider. The objective is to help stem the tide of the vaping crisis, and while a noble effort, seems likely to have very little impact.

Forty-two people are known to have died and 2,172 injured as of November 2019 from using e-cigarette or vaping products across the country. In limited sampling, THC was identified in 82%. California has recorded 163 cases of vaping-associated pulmonary injuries in the state. Again, based on limited sampling, 83% of those injured reported consuming vaping products containing THC. Only one of those people purchased vaping products from licensed cannabis retailers and that has not yet been verified. The other 70 vaping products were purchased from unlicensed sources.

From these studies, at both the state and federal levels, it has been determined that the risk of harm to the public is substantially greater from the use of THC vaping products obtained from unlicensed sources. The CDC now recommends that consumers should not buy e-cigarette or vaping products from informal sources, or “off the streets.”

These proposed regulations will provide an additional and visible way for consumers to immediately identify licensed businesses that sell cannabis goods meeting the state’s rigorous testing requirements. Consumers may not know that a license can be checked through the Bureau’s license search. These proposed regulations provide for a QR Code certificate that has a unique digital bar code that can be scanned from a smartphone or other portable device. Once scanned, the QR Code allows the consumer to verify that the retailer is in fact licensed, and who sells licensed and tested products. It provides access to the license number, license status, licensee’s name, licensed premises address, business contact information, and owner.

The proposed amendments will require store front retailers to display the QR Code certificate issued by the Bureau on the licensee’s licensed premises so the QR Code is easily visible to members of the public as they are about to enter the licensed premises. The QR Code certificate will provide notice that a license may be checked for validity and how to do so directly from the certificate. Easy access to the QR Code is intended to provide a valuable tool for a consumer with a smartphone or other device capable of reading QR codes to easily verify that the retailer is operating under a valid state license. The hope is that this effort will help protect consumers who may, erroneously, believe that a retailer is licensed and subject to all of the state testing requirements.

The proposed amendment will also require retailers engaged in transporting or delivering cannabis products to carry a copy of the QR Code certificate, as well as a copy of the distributor’s or retailer’s license. This proposal is designed to allow delivery customers, other licensees, and law enforcement to use the QR Code certificate to verify the business’ license and that the cannabis goods being transported are legal.

The Bureau hopes that enabling cannabis consumers to easily distinguish licensed businesses from unlicensed businesses will help prevent consumers from purchasing untested and potentially harmful cannabis goods which “should reduce the risk of injury or death suffered by consumers consuming unregulated and illegal cannabis products.”

Further, by providing a way to immediately and conveniently check licensure information using the QR Code certificate, law enforcement can more readily identify vehicles carrying illegal cannabis goods and prevent these potentially harmful products from reaching illegal retailers, who will ultimately sell them to consumers.

The vaping crisis has exposed just how dangerous unregulated vaping products are and demonstrate the need for licensed products to keep consumers safe. Unfortunately, the unregulated market in California still outpaces the legal market by as much as 3:1 much to the detriment of those who have spent millions of dollars to become legal. These licensed companies are subject to perhaps the most rigorous regulations of any product in the world – which is very expensive, and are taxed at local, state and federal levels in astronomical amounts – these facts obviously cause the cost of selling licensed products to be higher, often significantly. Sadly, many uninformed consumers buy cannabis based on price alone – and are not aware of the health risks (e.g., pesticides, adulterated products, and hundreds of other contaminants that legal products do not contain).

Therefore, until consumers are educated about the terrible risks of street cannabis and consumer buying habits are changed, the black market will persist – to the detriment of licensed companies and consumers. These proposed amendments are noble but appear likely to have very little impact.

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