How Maesa Ensures CBD Compliance and Prevents Losses upwards of $10,000,000 with Beaconstac

Solving the CBD compliance problem with QR Codes

The CBD industry is still in its nascent stages—and for the same reason—regulatory practices are strict. Compliance is enforced tightly. Each state has legislation that mandates a separate regulatory framework that CBD brands must adhere to.

Compliance often involves producing a CoA (Certificate of Analysis) at the point of sale. In most states, CoAs must be present with the in-store staff of retailers that sell CBD products. Maesa did the same with their retail partners—providing them with CoAs they could keep at hand inside their store premises. Then came the CBD regulations in states like Oregon, New York, and Texas—making it mandatory to have CBD compliance QR Codes on the product packaging itself.

In the case of regulatory compliance QR Codes, users should be able to scan the code and get directed to essential information like the Certificate of Analysis, information on product ingredients like THC levels present (in case of any), percentage of CBD, and more.

As the person heading the team responsible for compliance at Maesa, Claire Bing, VP of Regulatory & Quality, found QR Codes to be the ideal Phygital™ (physical-to-digital) tool that could do the job:

“We decided to deploy QR Codes physically on packaging for states that require access to CoAs on the product itself and for eCommerce compliance purposes on our website. That’s primarily how we’re using Beaconstac now.”

Leveraging Beaconstac’s scalable, enterprise-friendly solution for Maesa’s QR Code needs

With the rising popularity of QR Codes due to COVID, Maesa decided to deploy them on packaging for CBD products. This also included products in states that did not mandate QR Codes specifically: brands had the option to use QR Codes as an alternative to in-store CoAs.

Claire wanted to remove the burden placed on Maesa’s retail partners to produce the necessary regulatory certification in case the need arose. Out of all the QR Code solutions in the market—Beaconstac seemed like the ideal fit for Maesa’s enterprise requirements.

“I was recommended by a friend in the regulatory/compliance space to try out Beaconstac. They had heard about Beaconstac's QR Code platform at a conference and suggested that it would be a solution we could use for the Oregon QR Code compliance requirement.”

As a QR Code platform that emphasizes security and data protection, Beaconstac also met Maesa’s requirements as far as official government privacy compliance was concerned:

“The Beaconstac sales associate we were in communication with provided all the required data protection and privacy compliance documentation. We had our privacy and compliance attorney look at it—it was everything we needed for digital compliance in our industry.”

Exhaustive customization, ease-of-use, and an intuitive dashboard UI

A stand-out feature for Maesa has been the ease of using Beaconstac’s platform as a large enterprise and the intuitive UI of the dashboard. As a beauty incubator that curates product lines for brands from the ground up, Maesa wanted their QR Codes and the encoded content to be aligned with each brand’s unique voice and identity. They have been able to do this with Beaconstac’s extensive mobile-friendly customization suite—both for the design of the QR Codes themselves and the linked content as well.

In addition, the custom templates feature has proven to be beneficial for their digital team. Maesa creates products for beauty brands like TPH by Taraji Henson, Hey Humans, Kristin Ess, and Flower by Drew Barrymore that go to popular retail stores like Walmart, Target, Walgreens, CVS, Duane Reade, Kroger, and Myer. Making custom QR Codes for each of them and organizing the content designs can be a difficult task at the enterprise level. This is where Beaconstac’s custom templates feature helped, according to Claire:

“It’s really easy to use. We don’t have to employ a digital team every time we launch a new product for the brands that we work with. Our in-house team simply uploads brand-wise templates for the QR Code designs and the linked content, and sets rules for the font size and other visual elements.”

For Claire’s artwork team, Beaconstac’s multi-format export functionality stood out:

“Our artwork team likes the ability to download/print the QR Codes and the content designs in multiple formats. Since their work involves layering designs and versioning, they need files in certain formats—and Beaconstac’s export feature helps them a lot in this regard.”

Maesa’s eCommerce team has found the ‘dynamic’ aspects of Beaconstac’s QR Codes to be super-helpful:

“The eCom team has been able to integrate Beaconstac into their platform easily. They’ve also noticed how time-saving and cost-effective dynamic QR Codes are. They can now change the encoded link/landing page/content on the backend without having to update the QR Codes in any manner whatsoever.”

Using Beaconstac’s scannability feature in the testing stages

As one of the few QR Code solutions that provide a real-time measure of whether a QR Code being created is easily scannable or not, Maesa has used Beaconstac in the early stages of the product manufacturing process.

According to Claire, given the necessity of strict adherence to CBD regulation—the lack of which can make a CBD brand liable to litigation—QR Codes are almost built into the product itself.

If a compliance QR Code is not scannable on a product, it is moved to the non-functioning product packaging inventory. Although scannability is tested during production at regular time intervals, Maesa’s manufacturing partners use the scannability measure reliably:

“We have a first-time-right-policy at Maesa. If the QR Codes we deploy on product packaging are not scannable—it gets labeled as ‘non-functioning package defect’—and hits our sell-through rates directly. The real-time scannability measure on the Beaconstac dashboard has been a reliable indicator for us.”

QR Code location tracking for detecting diversion of goods

Although Maesa’s use of QR Codes has been focused on showing CBD compliance, they’ve also been able to use other Beaconstac features like QR Code analytics and tracking.

Claire’s team primarily uses the analytics suite that Beaconstac offers for gauging where scans are coming from based on geographical location. Apart from giving them insights into where consumers are buying their products the most—it tells them if there are any unusual scans at places where they do not sell their products.

“We’re monitoring location data on Beaconstac to see if any scans are coming from places where we don’t have a point-of-sale. This is also helpful for us from a regulatory standpoint. Since some states have a 0% THC regulatory standard which is unachievable (there’s always going to be trace THC), we need to see if there are any scans in those locations.”

Seeing the impact of using enterprise-level QR Code solutions like Beaconstac

With Beaconstac handling Maesa’s QR Code requirements at scale, Claire’s team has been able to get what they were looking for out of an enterprise-ready QR Code platform. Talking about how ensuring CBD compliance makes QR Codes a critical part of the product itself, Maesa has been able to ensure loss prevention of upto $70,000 for every 100,000 units of CBD packaging in production:

“We deploy QR Codes on foldable cartons—the secondary packaging that we use for our CBD products. If the QR Codes are not scannable or do not link to the appropriate CoAs, it hits our KPIs immediately. We place our purchase orders in batches of 100,000. If a QR Code cannot be scanned on a product in a given batch, it’s likely that they’re not scannable for the entire lot. With Beaconstac, we can avoid any failed scans on our products. This translates to loss prevention of $70,000 for every batch.”

Given that there are nearly 15-20 million units in production each year, this leads to a conservative loss prevention estimate of around $10,000,000 each year.

Currently, Claire’s team leverages QR Codes for 8 brands in their roster and is planning to continue working with Beaconstac to expand their use of QR Codes across teams for other use-cases:

“While our primary use-case is compliance, we’re thinking about using Beaconstac’s QR Codes in other contexts. For instance, our social team plans to leverage them at different events. For us, It’s been a wonderful experience working with Beaconstac. It’s been working well for us, and it’s something we don’t want to change.”