Lucid Green’s Cutting-Edge Tech Featured in MJBiz Daily

Marijuana Business Daily

How cannabis vape companies are using technology to ensure consumer confidence and bolster sales

The worst days of the vaping crisis are likely behind the state-legal marijuana industry, but many MJ firms are turning to technology to help further boost cannabis vape consumer confidence as well as deal with the dip in sales that followed the health scare.

Examples of tech-based solutions available to cannabis companies include:

  • Providing certificates of analysis (COA), including thorough testing results, via smartphone technology.
  • Including QR codes with smartphone apps to help consumers monitor dosing, usage, etc.
  • Encrypting cartridges to combat counterfeit vape products. That helps to separate legal products from the illicit market, which many industry watchers blame for the vape crisis.
  • Going beyond state testing requirements to ensure products are safe.

Paul Botto, co-founder and president of New York-based cannabis tech platform Lucid Green, said consumers are demanding to know what’s in their cannabis products and tech solutions provide a convenient way for them to access that information.

“For us, and increasingly for the general industry, it all comes down to trust and transparency,” Botto said.

Recent vape sales analysis

The vape crisis has hurt business in all adult-use cannabis markets in the U.S.

And while vape sales are edging back up in major markets, most have not yet fully recovered to what they were before.

Here’s a rundown of some recent sales numbers:

  • Vape’s share of adult-use markets in California, Colorado and Nevada has either trended upwards or remained flat since October.
  • In Nevada, the share increases are especially notable, as vape’s share of the market could reach precrisis levels soon if it continues to steadily climb.
  • In Washington state, a four-month ban on flavored THC products instituted in early November has continued to hamper vape sales overall – though it’s not a definitive sign that consumers are turning away from the category.

Certified analysis

Enter technology.

 

Screen shot of Pod ID system. (Photo courtesy of Pax Labs)

At Pax Labs, a San Francisco marijuana vaporizer company, Senior Vice President of Product Jesse Silver said the company’s app gives people access to information so they know they’re making a safe choice.

It had been in development prior to the vape crisis, but  was rolled out in November to address consumer concerns.

The Pod ID system is available on smartphones using the Android operating system and allows consumers to access information about the pod they’re using. (Apple recently banned all vaping apps.)

The app shows the COA, state testing results, information about the producer and the cannabis strain, including potency as well as consumer reviews about the strain and its specific batch.

“We want to be educating consumers about what they’re consuming,” Silver said. “We feel like access to those certificates of analysis is a great place to start.”

Silver said consumers have been asking for these options.

As the platform provider, Pax’s goal is that a consumer can go into any dispensary, buy a cartridge and have the lab report available.

Smartphone connectivity

Lucid Green offers Lucid ID, which is designed to offer instant access to specific information about cannabis vape products.

Screen shot of Lucid ID. (Photo courtesy of Lucid Green)

Smartphone-equipped consumers can scan a QR code, or Lucid ID, to pull up a vape product’s state-approved lab results, dosage guidelines, ingredients, effects, user reviews and more.

“It’s important for consumers to have access to information that says this is a tested product,” Botto said.

He added that the demand for his product has gone up as the vape health crisis raised alarms.

Budtenders at marijuana retailers also can scan products using the QR codes to help communicate to shoppers that a product has been adequately tested.

Beyond alleviating safety concerns, consumers also receive the added benefit of tracking usage, including dosage, to help determine what works for them and what doesn’t.

“This transparency has really started to matter at the consumer level,” Botto said, adding that black market products are less likely to include such a feature, which should help drive consumers away from the illicit market to the legal market.

Fighting counterfeits

One concern with the vaping crisis came from knockoff products designed to look like they came from licensed cannabis companies.

Airgraft, a Montreal-based vape technology manufacturer, sells vape oil pods containing an encrypted chip that communicates with the vaping device to ensure only legal-market pods can be used with the device.

The pods are connected to a specific batch of vape oil that is stored in Airgraft’s servers. When the user activates the device, the servers confirm the oil is legitimate.

Like the other vape tech mentioned above, a consumer can use the Airgraft app to access the pod’s COA and evaluate  contents, including lab test results.

“If you’re going to inhale it, you should know what’s in it,” said Mladen Barbaric, founder and CEO of Airgraft.

The company has launched in California, and, according to Barbaric, has maintained stringent standards for which producers it works with.

For example, it doesn’t allow any cutting agents such as vitamin E acetate – which has been identified as a possible culprit for the illnesses – in its cartridges.

Above and beyond

At Lucid Oils, a Seattle-based cannabis extraction company, the company tests its oil once it has been put in the hardware to determine if any heavy metals have leeched into the oil.

Even though the state of Washington doesn’t require the test, Jim Makoso, vice president at Lucid Oils, said the company does that to maintain quality control.

The oil is tested first for the standard contaminants such as mycotoxins and microbials, then again once the oil is heated and exposed to the hardware similar to how a consumer would use it.

Makoso noted the additional test adds thousands of dollars to his business expenses, but “it’s a very small cost for piece of mind.”

This article was originally featured on MJBiz Daily on December 23, 2019


Lucid ID: The Standard for Security & Authentication

The Truth about QR Codes, Product Authentication and Consumer Protection.

Why does Lucid Green use QR codes?

When we designed our platform, our development team carefully considered which underlying technology to use in order to address two pivotal real-world concerns.

  • What is the most bulletproof foundation for securing data and ensuring that information in each individual, serialized, encrypted Lucid ID cannot successfully be corrupted, forged, or duplicated?
  • How can we provide that information to consumers and the entire supply chain in a way which encourages engagement and can be easily accessed prior to making a purchase?

The fact is, there are several secure technologies available to address the first concern, so we looked at those several options from the lens of:

“If we provide information to consumers, but they never view it, what good is it?”

In other words, how can we limit the friction points between a consumer and authentication, accurate product information, potential effects, dosage recommendations, quality reviews, and COAs?

It’s from that perspective we chose the QR code, and while it may not be patented technology, it does the two things both us and our brand partners need it to do:

  • Keep our brand partners’ and consumers’ data safe from malicious attacks and their products protected from counterfeiters.
  • Allow anyone with a smartphone to easily access this content-rich information set, simply by using their camera.

Lucid IDs are used by your favorite brands to ensure consumer protection and product authenticity.

Why is ease-of-use important?

Volumes of readily-available consumer insights and well-publicized research on market intelligence have given us clear insight into how a customer reacts when they are on the consumer journey. Limiting the number of actions needed are pivotal to completing the journey to a successful engagement.

While 30% of consumers will download a brand’s application for a discount or incentive, and 24% will download a brand’s app for exclusive content, only 4% of consumers will download an app if it’s mandatory to make a transaction. According to Deloitte, more and more consumers are unwilling to download apps until they see the value in the content; when that content is visible only in app, the probability of engagement drops dramatically.

When additional action steps are needed to receive purchase-driving information, the consumer will either bypass that step, or gravitate to a similar product which offers a more seamless experience.

What about competitors with proprietary technology?

Authentication companies who have patented, proprietary on-pack solutions are defeating their own self-stated purpose. In looking to differentiate themselves by the proprietary nature of their on-pack solution, they have placed form and flash over function — their codes can only be read after you download their proprietary application — unwittingly limiting consumers’ access to the very information they need!

By failing to factor in how consumers interact with product and packaging in a real-world dispensary environment, they have missed the mark on engaging with the customer on their own terms.

HOW IT WORKS:

Authentic Product Scanned using Built-in Camera

When a consumer scans an authentic Lucid ID using their phone’s camera app, they will be taken to a web page showing the product details, with a pop-up that displays immediately directing the consumer to verify the product using the Lucid Green App.The consumer can dismiss the pop-up to view the details of the product without verifying its authenticity.

 

Authentic Product Scanned in App

When first scanning a Lucid ID, Lucid Green pairs the specific product item with the consumer account to track which user purchased the item. That consumer is presented with the “Product Authenticity Verified” banner.

 

If any other consumer scans that same item (and it hasn’t been marked as counterfeit in Lucid Green), they will not be able to verify product authenticity and will be presented with the banner: “Product already claimed and authenticity cannot be confirmed”.

 

Scanning a Counterfeit Product

When a consumer scans a counterfeit Lucid ID using their phone’s camera app or the Lucid Green App, they will see a warning screen directing them to contact the brand named on the product prior to consuming the product.

Lucid Green Product Authenticity Protection automatically protects consumers in the following instances:

Scanning a hacked Lucid ID with an invalid product identifier

If a counterfeiter uses a Lucid ID, but changes the QR code to use an invalid product identifier, we won’t have a record of that unique product identifier. This protection works when the Lucid ID is scanned:

  • Using phone’s native camera
  • Using the Lucid Green App

Scanning a Lucid ID that is flagged as counterfeit

Lucid Green can automatically or manually flag Lucid IDs as counterfeit based on geographic, time-based, and historical signals based on our algorithms identifying anomalous patterns. This protection works when the Lucid ID is scanned:

  • Using phone’s native camera
  • Using the Lucid Green App

Scanning a hacked Lucid ID that resolves to a 3rd party website

If a counterfeiter uses a Lucid ID, but changes the QR code to point to a 3rd party website, the Lucid Green App will see the counterfeit website url in the Lucid ID. This protection works when the Lucid ID is scanned:

  • Using the Lucid Green App

Why is security so important to Lucid Green?

When Lucid Green launched its “Trust and Transparency Movement” nearly two years ago, it was with a singular vision: establishing a standard for trust and transparency in the cannabis ecosystem, and looked to execute on that in two ways.

First, we built a revolutionary information-sharing platform that provided a channel for brands to connect directly with both consumers and retail staff; delivering the most accurate product information and improving consumer experience. Second, we created the Lucid ID, an on-pack mark which empowers the consumer with the knowledge they need to have a safe, predictable, and enjoyable experience.

Over the past two years, we have partnered with numerous brands; from those new to the marketplace to those with international name recognition. What has driven those partnership is the value we all place on changing the way cannabis knowledge is provided by empowering the consumer.

We call it “Trust and Transparency”.

To our brand partners it means taking action steps to promote and support those companies who are doing business responsibly and ethically; making a positive change in our industry that empowers the consumer with the knowledge they need to have a safe, predictable, and enjoyable cannabis experience.

To consumers, it means everyone, everywhere can have on-demand access to accurate, valuable, and trusted information – where they need it, when they need it. By doing this we enable the public to have confidence when purchasing and peace of mind when consuming.


Lucid Green CEO, Larry Levy, Signs NCR’s Social Responsibility Pledge

National Cannabis Roundtable

December 10, 2019

Launch Plan to Promote Social Justice, Equity and Diversity in the Cannabis Industry

WASHINGTON – The National Cannabis Roundtable (NCR) today pledged its commitment to fostering social justice, equity, and diversity in the cannabis industry.  With the launch of NCR’s Corporate Social Responsibility program, member companies will lead the cannabis industry in addressing injustices caused by the federal prohibition of cannabis. Looking to do their part to reduce the negative impact of the War on Drugs, specifically in those communities disproportionately affected by it, NCR members will commit time, talent and financial resources to pursue social justice measures, equity in business and diversity and inclusion within member companies.

Lucid Green CEO, Larry Levy, takes a public stand for social responsibility.

“We are not just having a conversation about how the cannabis industry can benefit those most impacted by decades of discriminatory drug policy, we are taking action,” said Dr. Chanda Macias, MBA, Ph.D., Owner of NHHC, and First Vice Chair of NCR.  “It is critically important to the future success of cannabis in America that we build justice and equity into the very fabric of this burgeoning industry.”

Some states with legal cannabis, including Massachusetts, California, and most recently Illinois, have developed social equity programs through their license structure, but no state has pushed businesses to take a reflective look at their own operations. NCR’s Corporate Social Responsibility program is our members’ effort to address that void and to ensure real outcomes with regard to justice, equity and diversity and inclusion.

NCR Executive Director Saphira Galoob said that members will begin 2020 assessing their internal practices – providing a baseline look at where they are today through the goals and activities outlined in the social responsibility pledge while developing targets for greater impact within their own operations.

“Our members are passionate about promoting social responsibility in this fast-growing industry,” said Saphira Galoob, NCR Executive Director.  “NCR is proud to bring cannabis into the mainstream and harness its potential to benefit our communities.”

NCR will engage subject matter experts from minority, adversely impacted, and designated beneficiary communities to advise the organization on the effectiveness and impact of CSR. These subject matter experts will work with NCR members and staff to ensure the integrity of the program and to measure performance and accountability.

“Social equity is intrinsic to where the cannabis industry is going and responsible companies have an obligation to build critical social equity programs into their business models as we have done with our SEED program at Cresco Labs,” said Charlie Bachtell, Founder and CEO of Cresco Labs. “Companies should not wait for it to be mandated; they should help develop the regulatory frameworks that support communities that have been disproportionately impacted by the war on drugs.”

The National Cannabis Roundtable promotes common sense federal regulation, tax equality and financial services reform and supports changing federal law to acknowledge states’ rights to regulate and manage cannabis policy.  The membership of NCR represents every aspect of the cannabis supply chain. Our members operate in 26 states with legal cannabis programs, including the District of Columbia. We are growers, processors, retailers, wellness centers, investors, entrepreneurs, and publicly traded companies.  Learn more at www.nationalcannabisroundtable.org.


Lucid Green Co-Founder & President, Paul Botto, Featured in Green Entrepreneur

Green Entrepreneur

How To Build Trust And Transparency In The Cannabis Industry Right Now.

”In an industry like cannabis, it’s all about adapting and continuing to learn to establish trust.”

Cannabis is a complex and multidimensional product with a variety of chemical components, which offers a diverse range of products that can produce varied effects. The amount of choice can be overwhelming — and not just for novices, but even advanced consumers — which leaves brands to look for best practices to provide transparency to consumers.

Dispensaries strive to be as knowledgeable about their inventory as possibe, but it’s difficult for every budtender to know every new product hitting the store shelves. At the same time, customers come to stores with completely different knowledge levels — from the new user who needs a “ground-up” education, to experienced consumers who want information about a new product in a familiar category. Then, there are the more specific consumers seeking information that skews towards medical.

Brands try to do their part by staying compliant, and even go as far as to post lab results for each product batch on their website. But that information isn’t always easily accessible for consumers at the point of purchase.

Lack Of Trusted Educational Resources

To fully distance and distinguish themselves from the illicit market, brands and retailers must make accessible and comprehensive educational resources about the safety and safe use of the products. In the legal market, when cannabis brands merely assure their customers that products are safe and tested for consumption, they are only doing the bare minimum. That’s not good enough, so there needs to be a way for customers to obtain accurate information and navigate the often convoluted cannabis marketplace.

But how?

Due to legal restrictions, potential cannabis customers can’t simply go on Amazon or Yelp to search for product reviews. Since there isn’t a centralized database of specific cannabis information, the majority of dispensary budtenders are relying on personal or anecdotal experience that pull from a narrow range of experiences to inform crucial purchasing decisions. This points to an unmet demand for pro-consumer educational resources that gives buyers the information needed to purchase the products that specifically meet their needs.

Providing User-Friendly, Intuitive Resources

According to a report from the International Council of Shopping Centers, about 86 percent of Millennials use their mobile phone while shopping in-store. And while Millennials are the most likely to rely on their smartphone, one-third of all shoppers use their mobile devices to look up product information in stores.

Smartphones provide brands and dispensaries an easy and viable way to educate consumers — and the key lies in QR codes. QR codes have gained popularity, especially in Asia, in recent years because the technology is tangible and simple to use. Apple and Android device users can automatically scan QR codes with their camera, eliminating the need to download a separate app. With one swipe, a consumer can get specialized content, rewards or product information.

Currently, QR codes are used for virtually everything. Paypal uses QR codes as an efficient cashless payment system. Restaurant chains have included QR codes on menus to provide additional nutrition facts. Starbucks has used QR codes to unlock coupons and promotional deals during new coffee roast launches.

So, how can QR codes be utilized in the cannabis industry?

Incorporating QR codes as the vehicle for consumer education is one of the most intuitive, efficient and streamlined solutions to get product information to a consumer. In return, cannabis brands and businesses capture data on customers.

For example, a big question customers should ask is, ‘How is this cannabis product different from similar varieties?’ With a QR code on every cannabis package, customers can compare dosages, product effects, lab test results and consumer reviews with one quick scan from their smartphone. The code provides education, data transparency and a rating in seconds.

QR codes also give consumers a self-service solution. The canna-curious may feel intimidated or uncomfortable asking a budtender for help. Consumers with questions about a health or medical issue may not feel comfortable discussing personal details with a virtual stranger. At the same time, a more experienced consumer may have a quick question that they don’t want to stand in line to ask. QR codes provide a discreet and fast way for customers to find the product information they need.

No one likes to feel uninformed, and, in an intimidating retail environment like a dispensary, the more information readily available to consumers, the better. Taking concrete steps to boost trust and transparency in the cannabis industry by offering consumers educational resources will make them feel smarter and more empowered about purchases.

This article was originally featured in Green Entrepreneur on December 18, 2019


POLITICO: Lucid Green’s Marco Rullo on Building Consumer Confidence

We want to provide consumers with the knowledge that they need at the moment of truth.
– Lucid Green’s Marco Rullo

LOS ANGELES — Scroll through Yelp or Weedmaps in the Los Angeles area and you will find dozens of dispensaries with names like Cookies Melrose, HP Pharmacy, Firehouse 365 and the national, West Hollywood-based chain MedMen.

Ensuring that a dispensary is licensed, however, can be a confusing process few consumers are likely to undertake before buying.

HP Pharmacy,a dispensary in Huntington Park, Calif., for example, lists a state-issued license number on Weedmaps, a cannabis consumer website. Search that number in the Bureau of Cannabis Control’s online database and you’ll find the license belongs to PureLife Alternative Wellness Center an hour away in Chatsworth, Calif.

The inconsistencies are a concern in a region where most dispensaries are estimated to be unlicensed. The problem has been amplified in recent months by the vaping health crisis, with cases of lung disease tied largely to illicit THC vape products. A store employee who answered the number listed for HP Pharmacy declined to explain the license discrepancy, and an inquiry to management was not returned.

With a spate of vaping-related illnesses and deaths and a persistent illicit market, California is changing its outreach to urge consumers to protect themselves. Until now, state-funded consumer cannabis education in legal recreational marijuana states has been broad and focused on defining lawful consumption and keeping others safe while consuming. Colorado’s folksy campaign, for example, warns against smoking marijuana in national parks — it’s still against federal law — and advises “locking up your stash.”

The most the federal government has done is urge consumers not to use marijuana e-cigs, especially those from the black market. California has reported at least four deaths and 166 cases of vaping-related illnesses, but only in one case did one of those who became ill say they bought THC products from a licensed dispensary.

“We’re really pinpointing consumer education and consumer awareness,” said Alex Traverso of the California Bureau of Cannabis Control. “There is that consumer out there that is walking down the street in SoCal somewhere; and you may see [a] retail location with the green cross. You walk in and buy your stuff and don’t think twice about [if it’s licensed].”

Consumer education is tough in a state where many have been smoking marijuana for decades, but where the legal industry — with its licensing, testing and new products like vapes and edibles — provides an entirely new set of issues to navigate.

“I wouldn’t sit here and pull a piece of gum from beneath here and eat this,” said Cat Packer, who oversees cannabis regulation for LA, pointing to the underside of a metal railing beside the outdoor cafe in Long Beach where she was sitting. “And that … could be similar to the health risk that you choose when you’re buying an unlicensed vape cartridge.”

The vaping crisis hit just as California, Los Angeles County and the city of Los Angeles were preparing to launch public awareness campaigns targeting the illicit market. California’s underground market is expected to reach $9 billion in sales this year, according to BDS Analytics, dwarfing the legal industry’s estimated $3 billion value.

Business owners say high taxes and licensing fees allow the illicit market to undercut the legal market, reducing revenues. Unlicensed dispensaries don’t pay California taxes and fees and therefore can charge less.

Businesses and California officials including state Treasurer Fiona Ma propose reducing taxes, though tax revenue has fallen short of expectation. But the state — which said it will raise taxes next year as planned — is instead dedicating more than$20 million for educating consumers about illicit dispensaries and both THC and nicotine vape products. Amajor goal is to steer consumers to licensed shops selling regulated products.

One of the major problems in California — and new recreational markets nationwide — is that while most children are told not to eat the gum stuck on the railing, cannabis consumers aren’t being educated onhow to interact with the legal cannabis market.

“Sadly, there needs to be a campaign that’s called, ‘That’s gross, don’t do that,’” Packer said.

Education now is largelyup to “budtenders” in dispensaries around the country, who explain to consumers everything from the impact of edibles on liver health to how to store a cannabis muscle balm.

“We needed to have a public information campaign before Jan. 1, 2018,” Packer said. “You need to have a campaign that is being implemented as the first set of consumers are going into facilities.”

Now, nearly two years after legalization, the LA city and county governments are working together on consumer awareness efforts, which include a public awareness campaign andinstituting an emblem that dispensaries can display — much like a liquor license or health code letter — to ensure consumers they are licensed.

The emblem is critical because it’s difficult to tell which dispensaries are legally licensed. Culver City Associates , for example, was listed on Weedmaps and, when asked in person, claimed to be licensed. The peppy, knowledgeable budtender at the counter had recommendations about which edibles lasted longest, assured a POLITICO reporter who visited the shop that the vape products didn’t include any additives that may cause lung disease, and even offered unsubstantiated advice on marijuana use for autism.

There were gallon-sized zip-top bags of flower stored at one end of the glass counter, and the dispensary’s Weedmaps profile did not even list a license number, butthe man checking IDs at the door insisted the dispensary was licensed. A search through the BCC’s database does not turn up any record of Culver City Associates or a license issued for that address. One clue that might raise a concern for the observant: its operating hours. California requires dispensaries to close by 10 p.m, and Culver City Associates advertises that it is open until midnight.

Many unlicensed dispensaries listed online appear legitimate from the outside. Some list a license ID that does not match the state’s online system if checked. In a city with a limited supply of licenses — 800 applications were submitted for only 100 licenses in the last round — Packer said this is one of her biggest problems.

“That’s what amazes me,” said Packer. “[Is] you took the time to invest in an architect and like, an interior designer, but you’re like, ‘F— that license’?”

The concerns are opening up a new line of cannabis business.

“People will not stop vaping just because their elected officials told them so,” said Vered Elkouby Nisim, an executive board member at Global Green, which plans to offer third-party verification technology for vaping products. “So we really need to give them the tools and the access to product that’s regulated and product that’s not going to harm them.”

The technology is intended to help consumers ensure what they buy is tested and verified.

Global Green’s tech — a variation of the hologram sticker on the underside of an NFL or MLB baseball cap bill — is secured through blockchain technology and can be scanned by consumers with their smartphone. A scan provides tracking information for the product and verification that it was tested, Nisim said.

“Let’s say you bought a product and you’re in MedMen,” she said. “But it shows you that this product is sitting on the shelf at Aeon — at another store. You should now question it because something’s wrong.”

Global Green said it is working with West Hollywood to phase in its technology to all producers and dispensaries in the city, and it is discussing its system with Massachusetts as well.

Another company, Lucid Green, has partnered with companies including Papa & Barkley, Cresco Labs and Wana to provide third-party authentication. Lucid Green’s technology is similar to Global Green’s: It is scannable on a smartphone, protected through blockchain and provides consumers with information about the product.

“The public right now is being bombarded … by accounts of legitimate health concerns,” said Marco Rullo, chief marketing officer of Lucid Green. “We want to provide consumers with the knowledge that they need at the ‘moment of truth’ — which is either inside a dispensary or when they’re home consuming the product — so that they’re able to have confidence when purchasing, peace of mind when consuming, and have a safe, predictable and enjoyable experience.”

This article was originally featured on POLITICO Pro December 2, 2019