It’s hard to keep up with the regulations for California marijuana businesses. But breaking the rules means fines, lawsuits, or possibly losing your license.
One more rule you now have to follow is including a cannabis health warning label on your products. Starting Jan. 3, 2021, California says all cannabis products need a label about the possible health consequences of marijuana smoke and Tetrahydrocannabinol (THC).
Do You Have Warning Labels on Your Cannabis Products Yet?
If you have questions or need advice about how to comply with California cannabis regulations, talk with California marijuana business lawyer Jessica McElfresh. You can schedule a consultation by reaching out online or calling (858) 756-7107.
California passed Proposition 65 in 1986. It requires businesses to warn consumers about exposure to chemicals that can cause cancer, congenital disabilities, or other reproductive issues.
Prop 65 also requires the state to publish a list of these chemicals. California updates the list regularly, and it was recently updated in December 2020. The list is available online and includes more than 900 chemicals.
You have two options for cannabis warning labels. You can use a short or longer, standard warning. The short-form warning is for smaller products with less room for additional words. It starts with a black exclamation point in a yellow triangle and doesn’t have to include the specific chemical name.
There are other rules, too, like the font size and location. The notice can go directly on your packaging or where consumers will see it. Above all, it should be obvious. Don’t try to hide it.
The California Attorney General’s Office and city or district attorneys enforce Prop 65. You can be fined up to $2,500 per violation per day.
Do You Have Warning Labels?
If you sell cannabis products in California, you must meet this label requirement. It’s possible you already do. California added cannabis smoke to the list in 2009 and THC in 2018.
Manufacturers of hemp-derived CBD products might not realize they need a warning label. If you own a business creating hemp-based products, you should warn about THC.
Complying means updating your packaging soon. Immediately, you could add a sticker to your packaging. McElfresh Law will help you review your options. If you’re interested in stickers, you need to buy ones that fully comply with the law. Not all of them do.
Are You a Retailer?
Properly labeling cannabis products is the manufacturer’s responsibility. But retailers can run into trouble too. If you own a store, we recommend talking with a lawyer about how to protect yourself.
You can put up a prominent warning for customers. You also can update your contracts with vendors. An indemnification clause in your supplier agreements can help if a plaintiff names you in a lawsuit.
Lawsuits Are the Real Worry
Marijuana businesses can be less worried about regulators this year than with possible lawsuits.
Some attorneys hope to find cannabis businesses out of compliance. Why? Because they can start a claim and demand an out-of-court settlement. A claim begins with filing a 60-day Notice of Violation with the Attorney General.
There are already lawyers who do the same to other companies with Prop 65 label requirements. They intentionally track down businesses with products lacking warnings. Cannabis is a new industry to take advantage of.
Your best option is to follow the law. But if you’re struggling to get all your products labeled, prepare for litigation. If someone sues your business, you face the question of whether to fight or settle. Often, you can save money by settling quickly. It solves the problem, but not entirely. It can still cause civil fines and damage your reputation. Fighting bad faith lawsuits, though, can be time-consuming and expensive.
Once you receive notice of a violation, talk with a lawyer right away. After someone files a notice, the burden shifts to you to prove several things. It can be difficult to respond. McElfresh Law will help you obey the law and decide your best option to address the claim.
Do You Need Help?
Jessica McElfresh is ready to help any cannabis and hemp business. She has years of experience in the cannabis industry and routinely helps ventures get off the ground and grow. Give McElfresh Law a call at (858) 756-7107 or use the online form to set up a consultation.