'Uncharted territory' of marijuana recalls
Product recalls are nothing new, but nothing in the cannabis industry is routine.
Colorado-based Bonsai Cultivation recently announced a voluntary recall of its dry marijuana products, including flower and pre-rolls. A Denver Department of Public Health & Environment investigation found potentially unsafe levels of yeast and mold in samples.
The recall affected 144 retail stores, three cultivation facilities and 11 manufacturing sites in Colorado that received Bonsai Cultivation products.
Product recalls are nothing new, but nothing in the cannabis industry is routine. I checked in with Hilary Bricken, chair of Harris Bricken’s Canna Law Group to find out what to do when a marijuana-related recall becomes necessary. Our conversation is edited for length and clarity.
Higher Law: What does a good lawyer or advisor tell clients in the marijuana industry about handling a client recall?
Hilary Bricken: What I would tell clients is, don’t reinvent the wheel. Borrow from FDA recall protocol as it makes sense, and especially if you’re in the manufacturing industry where products are super innovative, and maybe they don’t have a ton of regulation around them.
Also, build a team, one that handles recalls in the event you pull the trigger. And this needs to be led by people who have acumen and experience in this particular area because there are all kinds of contingencies that cannabis businesses, because they are so green and emerging and nascent, don’t realize. For example, contacting your insurance provider immediately in the event of a recall notice, and also gating and protecting your reputation. That’s probably most significant for these very new companies in trying to establish their market share when consumers are still turning to the illegal market.
Higher Law: Are there a lot of differences among the states in terms of rules for cannabis recalls?
Hilary Bricken: Not really. They’re very strongly geared toward licensees’ choice. Recalls at the state level are reserved exclusively for those very serious health and safety consequences in the estimation and sole discretion of the regulators.
There was a moment where Colorado was issuing recalls like once a month, and that was maybe two or three years ago. Now even the Bonsai recall, it looks like that was initiated by Bonsai itself. And you see the state kind of participating less and less as the market matures, and I think that’s probably what we’re going to continue to see unless it’s something really, really big with palpable, immediate damages, like what people are suffering from with the defective vaping devices. That would probably rise to the level of a state recall if enough people were hurt.
Higher Law: Is licensed cannabis tracked well enough yet to track for recall purposes?
HB: In certain states absolutely. In Washington and Colorado, they’re very drilled down on the track and trace, and the reporting requirements are very intense. In California, I do not think we would have a very effective recall because people are still straddling provisional licensing and annual licensing, and they’re slow to get into track and trace, and track and trace is just starting. So it would probably be a little messier for us.
Higher Law: Is there anything specifically different about product recalls in the cannabis space?
HB: This is just an area that is uncharted territory, and the reason is because we’re not seeing, maybe like we would with other industries, class actions and product liability lawsuits. And that’s partly because it’s federally illegal and it can be difficult to get products insurance and liability insurance in this capacity so plaintiffs lawyers are not super interested. But I think that’s going to change as the industry matures and there will be potential to realize real damages and reparation for damages as time goes on.
This piece was first published by Higher Law, an ALM sister product.
Related: