By Marshall Ogen, Vice President, Business Strategy – CannabisBPO
Two Cannabis companies face a possible class action lawsuit over marketing practices, specifically text messages. Yes, a text, or more than 200 texts in this case, will significantly drain the time, money and resources of two on-the-rise cannabis companies.
The seminal hour has arrived for the cannabis ecosystem to buy an ounce of prevention, by employing the services of a strong internal legal and compliance team or work with experienced partners well versed in contact centers, compliance, and cannabis.
Tilt Holdings, a company specializing in cannabis technology, and their subsidiary Baker Technologies, who provides online ordering, customer loyalty, messaging and analytics for dispensaries in the U.S. and Canada, are accused of violating the federal Telephone Consumer Protection Act (TCPA) by transmitting unconsented to telemarketing texts that included content such as, “TUESDAY MEGAPROMO – 30% OFF PREORDER W PICK-UP & 20% OFF MEDICAL IN-STORE.”
The reason text messages could be illegal? A fairly simple oversight in an industry beset by ever-changing rules and regulations. The recipient’s “prior express invitation or permission” is required under the TCPA.
Cannabis companies with internal contact centers focused on developing consumer contacts, maintaining relationships, repeat business and getting consumers into their brick and mortar stores, must consider prevention methods.
Marc Roth, a former Federal Trade Commission (FTC) attorney, and a partner at Davis Wright Tremaine specializing in the intersection of cannabis, telemarketing and native advertising, responds, “I do think that [Baker Technologies] did not fully appreciate what the rules are with regard to developing databases and doing consumer reach out, particularly in regard to TCPA, and the risks associated there. When cannabis companies are starting out, and when they want to figure out an effective customer relationship management (CRM) strategy, they need to consider these laws that can have serious repercussions.”
“You do not necessarily have to go out and hire a lawyer, but in our case, in call center work, we’re familiar with the TCPA, in regards to the Tilt Baker text messaging lawsuit,” says Dan Berman, founder and CEO of CannabisBPO, “For us, its basic legal and regulatory hygiene. This is a seminal moment for the cannabis industry. If you’re going to do call center work internally, you’d better have a general counsel who understands telemarketing and call center law, or have a partner like CannabisBPO outsourcing it who understands it.”
“Small to midsize companies are already at a disadvantage. The more regulations there are, the more the scale gets tilted towards big business,” says Peter Pitts. Peter Pitts is an advisory board member to CannabisBPO, a former FDA Associate Commissioner, and currently serves as President of the Center for Medicine in the Public Interest.
Hiring the best CRM team is just the beginning, “Cannabis companies are not contact center companies, and most contact center companies are not dedicated, nor understand the nuances of the cannabis sector. At CannabisBPO, we’ve made a conscious effort to become steeped in the cannabis ecosystem, but we also have 30 years of experience in compliance related to the contact center space, with the assistance of law firms such as Davis Wright Tremaine. We are contact center experts in the cannabis space,” confirms Dan Berman.
Doing business in the cannabis industry is tremendously exciting, but “it is very dangerous from a regulatory perspective. The cannabis industry has set their defenses against the federal government like the Drug Enforcement Administration (DEA), the Food and Drug Administration (FDA), but there are other, equally forceful organizations like the FTC, Federal Communications Commission (FCC), the TCPA, as well as city and state offices that govern contact center practices,” says Pitts, ”You need to hire or retain those types of experts. The more regulations there are, the more the scale gets tilted toward big business, who are scaled up to do this.”
The best method of prevention? Cannabis companies need to start making some choices around their internal or outsourced contact centers. For internal operations, it is imperative to source a compliance officer who has expertise in cannabis-related contact center law in addition to the FDA, and the DEA. According to Dan Berman, “If there is not an internal expert, then they should partner with a lawyer, additionally, they should partner with an independent quality and compliance monitoring organization such as Concentra Solutions, a sister company of CannabisBPO.”
In terms of outsourcing contact center services, make certain you have a provider who is dedicated to the cannabis space. The industry was born of advocates, patients, and customers, and they deserve top tier, white-glove, and customer-engagement like any other industry.
Much as cannabis companies focus on the plant, products, and branding, they must now turn their gaze toward their customer’s journey, and contact center compliance, or face innumerable time and finance draining obstacles.
While this case is still pending, according to Baker Technologies they send text messages “only to customers who have signed up to receive them at dispensaries.” Regardless of the outcome of this case, this a warning shot to the cannabis industry to pay attention to contact center compliance issues.
CannabisBPO is a specialty provider of contact center services for the cannabis industry. With locations in Canada and the US, the company offers outbound and inbound contact center services in a 24/7 setting. The company’s core service channels are text, email, mail, phone, chat and social media for customer service, sales, and technical support projects. CannabisBPO helps cannabis companies drive revenue and mitigate risks. For more information, visit https://cannabisbpo.com. Follow us on Facebook, Instagram, LinkedIn, and Twitter.
Dan Berman, founder, and CEO of CannabisBPO, has created customer relationship management programs for Fortune 100 companies for over 25 years and is now focused on providing solutions for the cannabis industry. He is also the CEO of CannabisBPO’s sister companies, Concentra Solutions and PharmaCentra where he has crafted needle-moving strategies for some of the world’s most recognizable brands across multiple industries.
Peter Pitts is an advisory board member to CannabisBPO and a former FDA Associate Commissioner who’s specific areas of global policy expertise include FDA policy and process, healthcare technology assessment, real-world evidence, social media, pharmacovigilance, abuse-deterrent opioids, biosimilar development, Rx-to-OTC switching, GMP policies, pharmacy education programs, drug safety, Critical Path, personalized medicine, clinical trial transparency, IP protection, FDA reform, drug importation, counterfeiting, genetically modified food issues, food safety and security, recalls, and nutritional labeling.
Marc Roth is a former Federal Trade Commission attorney and is a partner at Davis Wright Tremaine specializing in the intersection of cannabis, telemarketing, and native advertising. CannabisBPO maintains a relationship with Davis Wright Tremaine to provide the full spectrum of compliance services for small and large companies in the cannabis industry.
Marshall Ogen is the VP of Business Strategy for CannabisBPO and has over 25 years of experience in outsourced contact centers, quality assurance, having consulted with many of the world’s most recognizable brands to ensure successful customer engagement activities. He is a strategic advisor to the New Jersey CannaBusiness Association, a member of the National Cannabis Industry Association (NCIA) Marketing and Advertising Committee and the co-chair of the Mid-Atlantic Professional Association of Customer Experience (PACE).