Market Overview

Why The Cannabis Industry Needs To Be Better About Age Verification

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Why The Cannabis Industry Needs To Be Better About Age Verification

By identity verification and authentication solutions firm Jumio.

Cannabis is now in 11 U.S. states, plus D.C., and that number continues to grow. Consumers 21 and older can now order cannabis products directly online and have them delivered right to their front door. It’s a dream come true for cannabis consumers, but there has been some controversy over age verification compliance during online transactions.

This new, highly controversial industry already endures scrutiny when cannabis and paraphernalia end up in the hands of underage consumers. As online sales increase, vendors must be able to confidently determine that an individual's digital identity matches the real-world person making the purchase (and that the customer is of legal age).

In fact, among persons aged 18 or older who reported lifetime marijuana use, almost 53 percent report first using marijuana between ages 12 and 17. About 2 percent report that they first used marijuana before age 12. Unfortunately, most identity and age verification methods fall short of that ask. 

Traditional Age Verification Methods Are Failing

Traditional methods of age verification depend on whether the product is being purchased online or within a dispensary. In online channels, companies rely solely on self-reporting, where the consumer simply interacts with a pop-up screen that asks for their date of birth. If the date of birth provided exceeds the minimum age requirement, the consumer can access the website and make online purchases. If the date doesn’t match, they’re denied access to the website.

On the other hand, the process for an in-store buyer is different and a bit more rigorous.

When a new user walks into a dispensary, they are often greeted by a “budtender” who will ask to see the customer’s driver’s license or other government-issued ID. They inspect the ID document, usually take a copy of it for their records, and sometimes ping a third-party database to verify the age and ensure the ID is legitimate. After the customer has been vetted and their age verified, they are usually asked to scan in their ID document on subsequent visits. The newly scanned ID is compared to the ID document on file to confirm it’s a match, and the user can then enter the dispensary and make cannabis purchases.

There are risks associated with either channel.

With the online channel, self-reported information provides virtually no actual proof of age and is unlikely to withstand any type of regulatory scrutiny. The in-store channel is a bit stronger because of the visual inspection of the ID document, but this avenue still lacks definitive proof because these documents can be so easily manipulated or even purchased off the dark web.

If someone provides an ID purporting to be John Smith at 123 Main Street and 21 years of age, how does the budtender know the ID is authentic? Unfortunately, there are so many security features embedded within today’s driver’s licenses, ID cards and passports, that it’s virtually impossible for untrained people to delineate between legitimate and fake IDs.

What Are The Implications Of Mismanaged Age Verification?

There are a number of potential repercussions of mismanaged age verification in the cannabis industry, all of which could hinder the growth of its legalization. Consider the current wave of legislation impacting the e-cigarette and vaping industry. As of September 2019, electronic cigarette users in New York are no longer able to buy such flavors as cotton candy under a new state ban approved by the Department of Health.

On a broader scale, Trump administration officials, alarmed by new data showing a huge jump in vaping by young people, are moving to ban most flavored e-cigarettes, a major development that could result in sweeping changes in the sprawling market. The cannabis industry should absolutely be shaking in its boots.

While many e-cigarette and vaping companies seemingly market their products to younger consumers, the cannabis industry is likely to be embroiled in a similar controversy. The repercussions for mismanaged age verification include hefty fines and brand damage (if local media get a hold of the story). If there’s enough bad press, then many jurisdictions may be forced to outlaw the sale of cannabis within their city or township.

What Can Be Done To Ensure Cannabis Consumers Are The Age They Claim To Be?

Thankfully, our ever-evolving technology market can offer an incredibly accurate and safe means of age verification to not only protect suppliers from scrutiny, but the industry altogether. For example, face-based biometric verification can offer a viable alternative to current methods of age verification.

When combined with advanced technologies, like artificial intelligence and certified liveness detection, these methods can provide powerful disincentive for underage customers using a parent’s ID or a fake ID. In order to assess the validity of the ID, these types of solutions can capture ID documents, extract the data to assess their authenticity, and then use computer vision, machine learning and AI together to verify IDs in real time.
This type of methodology provides a much more comprehensive means validating a consumer’s age and goes further than just your general check box or quick glance at a government-issued ID. This is just one example of a potential solution to a sweeping issue in the industry and a giant step up from the methods being used currently. Many highly-regulated industries — like banking and online gaming — are also resorting to face-based authentication to meet intense regulatory demands, so the cannabis industry is not alone in its struggles.

It’s clearly time to evolve beyond self-reported age verification. This is integral for online sales, but also vitally important at in-store dispensaries, as most budtenders are not fully equipped to identify fake IDs. Dispensaries need to pay attention to the current e-cigarette and vaping climate, and take every measure to stay above the fray, and this starts with reliable age verification. The good news is there are already proven methods, used by other industries, that can provide a much higher level of age verification assurance that can better withstand regulatory and jurisdictional scrutiny.

Photo by Javier Hasse.

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: Jumio Robert E. PriggeCannabis News Markets General Best of Benzinga

 

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