De La Rue targets legal cannabis industry with KushCo deal

De La Rue has formed an alliance with cannabis industry specialist KushCo to help it tap into the sector’s growing demand for anti-counterfeit and authentication features.

California-based KushCo – which sells packaging, containers, and other ancillary products to the cannabis industry – will offer De La Rue’s anti-counterfeit security labels to its customers, said the partners in a statement.

The legal cannabis/marijuana market is expected to reach a value of $66bn by the end of 2025, fuelled by the increasing legalisation of products for medical as well as recreational use, according to market analysts at Grand View Research.

That shift towards legalisation is making it ever more important that companies operating in the legal, regulated cannabis/marijuana sector take steps to protect their production and supply chains from black market/illicit trade elements.

Under the terms of the deal, De La Rue will also provide unique IDs to support product serialization and a digital verification system to enable authentication throughout the regulated cannabis supply chain.

Legalisation of medical marijuana in the US and Canada will be a key driver for market growth, but there are already concerns that counterfeit products may undermine the industry even as it just starts to gather momentum.

Just this week, two Wisconsin brothers were charged in connection with a massive counterfeit tetrahydrocannabidiol (THC) vaping cartridge operation that netted them hundreds of thousands of dollars in illicit gains. THC is the psychoactive compound in cannabis.

Tyler and Jacob Huffhines are accused of buying THC vape cartridges in California – where they are legal –for $2.50 each. They transported the cartridges to Wisconsin, filled them with illegal liquid THC and sold them on to unsuspecting customers at $15 apiece.

At the same time, a spate of vaping-linked deaths in the US – possibly focused around counterfeit THC products although investigations continue - have led to an Centers for Disease Control and Prevention (CDC) warning to be wary of using the products.

“Counterfeit products undermine the legitimate cannabis industry by hurting sales, cheating governments out of tax revenue, and eroding consumer confidence while putting their health at risk,” commented Nick Kovacevich, KushCo’s chief executive.

“KushCo wants to provide the tools for our clients to have greater transparency and accountability,” he added.

The linkup with De La Rue will allow KushCo to provide companies with secure visual authentication technology using 3D photopolymer images, unique serialization, e-verification, label tracking, and data capturing capabilities, according to the two companies.

“As the legalized cannabis industry matures and companies look to protect their consumers, strengthen regulatory compliance and introduce global trace capabilities, we are happy to partner with KushCo to enable the provision of product authentication labels and anti-counterfeit services to their customers,” said Andrew Clint, managing director of De La Rue’s authentication business.

“We look forward to supporting their initiatives to protect against fraudulent products and to enable their clients to safeguard their brand equity and reputation.”