Progressive cannabis reforms across the world, New York included, are leading to new opportunities and new businesses. Reforms also bring innovations in tech, helping businesses with compliance, efficiency and marketing.
We spoke to Paul Botto, Co-Founder and President of Lucid Green, about New York’s proposed labeling regulations, building a supply chain and the possible challenges for stakeholders.
Lucid Green provides brands, retailers, and distributors with a complete touchless inventory management solution that increases supply chain efficiencies and cost-savings, plus connects brands directly with consumers. The company’s signature LucidIDs utilize QR codes to make the cannabis supply chain more efficient by allowing for true truck-to-shelf inventory intake, reducing manual labor and human errors, and virtually eliminating data cleanliness issues.
New York has proposed regulations for the packaging, labeling and advertising of cannabis products, do you think these do enough to build trust and educate consumers?
We commend the OCM’s commitment to a safe, well-regulated adult-use cannabis market through its packaging, labeling and advertising proposed regulations. The proposals are clearly designed to help protect public health and promote sustainability. In particular, the proposed requirement that cannabis products contain a QR code linked to a downloadable certificate of analysis of the product (CoA) demonstrates the OCM’s understanding that this type of technology will be a critical component in supporting consumer safety and building a robust cannabis market in New York. It is a fantastic start. And based on Lucid Green’s experience as a leader in the cannabis technology space using QR codes in other markets, the OCM is in a strong position to expand this technology and proposed requirements for complete trust and transparency in the New York cannabis market. These codes could expand to provide proper guidance on the product, product authentication, and even the ability to track your personal dose over time on every product you’ve tried.
Further, bringing this technology to bear with other stakeholders in the supply chain, including brands, distributors, and retailers, have additional positive impact on consumers. If these stakeholders do not waste margin on redundant processes and manual steps, do not deface and obscure packaging with multiple stickers, and are able to use the consumer experiences to build and market better products, it is all a net positive for the consumer and the entire industry.
What challenges do you see stakeholders in the cannabis industry facing?
A major challenge in the cannabis industry that we have seen repeated across all markets has been unlicensed dispensaries and unlicensed products competing for consumer attention and dollars. There are obvious safety concerns that were illustrated during the vape scare a few years ago where the majority of incidents were tied to unlicensed products. This also creates unfair competition for licensed operators who have to compete with those not subject to the same regulations and taxation. This will certainly be no different for the New York market.
A large part of this comes down to consumer education, another challenge. For experienced users, why purchase from a licensed operator if I can buy this off the street for less? For new users, how much should I take? How will this make me feel? Is this the product I think it is or is it counterfeit? Licensed operators will need to be able to educate both new and experienced users.
Because of the heavily manual process of transferring information from stakeholder to stakeholder in the supply chain, the often surprising challenge of maintaining stock levels has been challenging in many markets. The data about inventory levels can be scrambled by regulatory entry mistakes or even simple naming issues, giving a single SKU many different names by the time it is on the shelf. This makes reporting inventory levels very difficult without time consuming data cleansing, leading to stockouts unless retailers commit many employees toward cleaning the data and managing those levels.
And just simply needing to record redundant information, most often manually, at each step in the supply chain creates inefficiencies. The good news is that the very same QR code technology the OCM is instituting on the regulatory labels can be expanded to address many of these challenges.
New York’s adult-use market will see many new small businesses, what advice would you give them when developing their own supply chains?
Look to automate as much as possible to try and remove human error and keep resources on the front lines where they belong. Consumers are better served by knowledgeable staff answering questions than those staff members stuck in a back room stickering products or entering data into a terminal. Distributors who can perform many functions at once with a single scan will be far better off than building multiple discrete steps. Brands that can solve the needs of the regulators, consumers, distributors, and retailers with a single code on each package will benefit from that efficiency directly, from being in compliance, and from making their partners happy with the efficiency they pass on.
How is Lucid Green working to ensure that the New York market is a success?
Lucid Green has been working with operators and regulators to share what we have learned in other markets to help the New York market mitigate some of the missteps and self-induced challenges. We are reaching out to processors, distributors, and retailers to integrate our platform to satisfy the current OCM QR code requirements and extend the benefits to many of the areas discussed above as well.
You were our official Networking Partner for Business of Cannabis: New York his year. How did you find the event?
It is an exciting time for New York cannabis! Like everyone else, we would love to have more predictability and opportunity to plan for what is coming. But we recognize it is challenging to build a market from scratch. The Business of Cannabis: New York show was an ideal setting to work together to understand as much as we can, make contacts that may be with us for years to come, and learn more about what to expect. We will combine what we learned with our experience in other markets to help our partners prepare and continue to refine as the new regulations, operators, and technology providers come forward to enhance the New York market. We greatly appreciate the Business of Cannabis: New York team for putting on this event and bringing us all together.
