Interra Oils, a Washington state-based company that sells marijuana concentrate products–those that can be inhaled using a vaporizer or added to edibles–has to wait until it’s ready to deliver orders to customers before it adds a 16-digit sublot code to each individual package. Each time it gets an order from a store–even if it is the same order that same store made the previous week–it has to create a new manifest and generate a new 16-digit code.
If for some reason Interra can’t make a delivery–whether it’s traffic or another issue–the company must print a new label before it attempts another delivery. “The time it takes to put orders together is considerable,” said KC Dochtermann, the company’s sales and marketing director. “If someone orders 40 cartridges, we create a bar code, print that out and put a sticker on each one. Even if they order the same thing next week, we have to create it all over again.”
Unlike most products, which get a bar code built into the rest of their packaging that doesn’t change with each order, the rules are different for marijuana businesses charting a path in states that have legalized sales and crafted rules to allow the industry to operate while working around the pesky fact the federal government considers marijuana illegal.
Marijuana is legal for recreational use in Colorado, Oregon, Washington, Alaska and the District of Columbia, while more than two dozen states allow its use for medical purposes. Several states, including California, have ballot measures in November to either legalize recreational or medicinal use.
The rules are different from state to state–different rules governing medical marijuana and recreational pot, different rules governing products that are inhaled and those that are eaten–all of which brings complications for companies trying to navigate their way in the market and for regulators trying to enact controls.
Regulations help track seeds used to grow marijuana through to final sale to a customer, ensuring products are being sold where they are supposed to be and are being purchased by people of legal age. Other rules govern what can be displayed on a product–including warnings about misuse, use by minors or pregnant women–and that all products must be sold in childproof packaging. There are rules covering how marijuana can be grown, what chemicals and pesticides are permitted, and rules covering packaging, labeling, testing and even what name a product can use.
In Washington, that means when one product contains marijuana from four or five different growers, each grower has to be listed on a label that has to fit on the packaging, said Daniel Philipp, chief executive of Interra Oils. “There is only so much real estate on packaging,” he said. “With the way we have to label these we are not able to necessarily use automation and that is something that has a direct financial impact.”
Washington state empowered its liquor commission to regulate marijuana, and the agency has had to work to understand how to best put controls on this new industry, said Brian Smith, spokesman for the now-named Washington State Liquor and Cannabis Board. “We’ve come a long ways. A lot of these people came from the underground, selling in the black market, and now are under tight state regulations, a level playing field and are paying taxes,” he said. “A lot of them still are adjusting.”
In Oregon, new rules that took effect Oct. 1 set new testing, packaging and labeling standards, which officials say are necessary to try to prevent packaging and marketing that is attractive to children and teens below the legal age for using marijuana. Before they can get licensed, businesses that sell marijuana in Oregon have to get approval for their packaging and labeling, which must include clear, easy-to-see warning labels and a new symbol to make clear it is a marijuana product.
The changes caused some confusion among medical and recreational retailers, with some fearing they would have to pull products off their shelves until authorities allowed older products to continue to be sold until early next year.
“People want to participate in the system, let them participate in the system and don’t make it so difficult,” said Tyson Haworth, owner of the Oregon’s Finest medical dispensary and recreational retail stores in Portland, and also the owner of a marijuana farm and a distribution company that sells to other stores. “Regulatory hurdles will put a lot of good-intentioned small businesses out of business or working with the unregulated market that people are so fearful of.”
In Colorado, which also enacted new labeling rules on Oct. 1, including a universal symbol to designate products that contain marijuana, regulation remains a “work in progress,” said Tyler Henson, president of the Colorado Cannabis Chamber of Commerce. When lawmakers passed the original rules to govern marijuana sales they didn’t give the Department of Revenue—the legislative agency in charge–any flexibility, he said.
Now, nearly three years after marijuana became legal there in January 2014, the industry worked with Colorado lawmakers to remove all the statutory requirements except for those about warning labels so the agency could determine what information should be required for labels and packages. This allows the agency to craft new rules with industry input and the benefit of seeing operations for a few years, he said.
“Right now labels are so convoluted with information the consumer has no real way to understand what is on the label,” said Mr. Henson. “We’re working to make it clear and concise and give consumers the information they need.”
Beyond rules, there are issues with handling large sums of cash and how to make use of banking services for an industry the federal government doesn’t permit. All of which creates a compliance headache.
“The business owners who own these licenses…their license, their livelihood, their whole life is on the line, so compliance has to be at the core” of what they do, said Kyle Sherman, chief executive of Flowhub, a software company that manages compliance for marijuana supply chains. “When regulations are clear, and there’s instructions to follow, it gives everyone a sense of comfort with following the rules, with doing the right thing and not getting in trouble. It’s really important for legalization efforts to make these things happen.”
By Ben DiPietro - The Wall Street Journal/Oct. 24, 2016
Photo: Intiempo Oils
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Complex Marijuana Regulations has US Cannabis Industry Struggling for Answers