Better regulating cannabis

The fate of the cannabis industry in the United States changed dramatically in 2020. Five states have just joined the growing majority of those adopting recreational and medical cannabis laws that differ from federal policy, and the impacts will be felt across the country.

Over the past decade, the state-by-state, staggered cadence of legalization roll outs has been far from smooth. As more states adopt new policies, law enforcement entities, regulators, and health authorities will face even greater challenges in their efforts to regulate the newly legal substance and keep consumers safe. With no federal policy in sight, states need to develop thoughtful strategies that will help mitigate the impact of the continuously shifting landscape and ensure both recreational and medical cannabis products being sold are authentic, in compliance, and coming from licensed operators.

As someone who has spent nearly 50 years working in law enforcement, drug policy, and trade, I know there are lessons we have learned from years of managing regulated substances like tobacco and alcohol that we can apply to our approach with marijuana. By thoughtfully working together to use 21st century technologies to secure the cannabis supply chain, we can help states minimize illicit activity and maximize tax revenue, ease the burden on law enforcement, create trust with consumers, and empower growers to succeed.

In Canada and the United States, tobacco companies are required to place secure, counterfeit-resistant stamps on retail packaging to allow regulators, law enforcement and consumers to quickly differentiate legal from illegal products. When implemented on individual retail units, these identifiers facilitate enforcement, enable inspectors to efficiently verify products are legitimate, and ensure appropriate taxes have been paid.

In 2005, California implemented a secure tax stamp on tobacco products, and in 2016 reported that the use of the stamp to disrupt tobacco smuggling across state lines helped to prevent the loss of $91 million in annual tobacco tax revenue. Canada, which also found success in utilizing excise stamps and electronic traceability on their tobacco products, became the first country to implement an excise stamp on all cannabis retail products in 2018.

By implementing similar secure stamps on all cannabis products here in the U.S., states can help mitigate some of the major issues still impacting cannabis regulatory programs including illicit product sourcing, counterfeit products and products not subject to appropriate testing. It can also provide millions in additional tax revenue from existing products at a time when states are facing decimated budgets and massive losses as a result of the economic repercussions of COVID-19.

Using a secure, counterfeit resistant excise stamp on cannabis products will provide state and local inspectors and law enforcement with an easily identifiable, verifiable and secure mark to help them keep illicit, untaxed, products off the shelves.

Consumers will be able to verify the legitimacy of the products they’re purchasing as more shops open.

Public health authorities will have a tool to help them manage the sale of edibles and infused products as THC and CBD gets mixed with different types of food and products.

Cultivators of all sizes who are playing by the rules will benefit from a shrinking black market, and — if states realize the full potential for secure marks to provide proof of origin — could brand their products as unique when they reach a broader, increasingly competitive market.

With the fate of federal regulatory changes still unknown, states can’t afford to let the safety and security voids that exist in the cannabis supply chain continue. We can work now to implement solutions that will give regulators the tools they need to reduce illicit activity and protect the health of consumers.

Gil Kerlikowske began his career in law enforcement in 1972. Since then, he served as the Commissioner of U.S. Customs and Border Protection, spent five years as President Barack Obama’s drug policy advisor, and served nine years as Seattle’s police chief. He is currently a private consultant who provides strategic advice to U.S. companies on topics related to border controls, national security, and drug policy. He is also a distinguished fellow at the Global Resilience Institute, a professor of the practice at Northeastern University, and a nonresident fellow at the Baker Institute Mexico Center specializing in border issues.