If 2015 was the year of the marijuana recall, 2016 is going to be the year of marijuana recall response and planning. If your cannabis business does not already have a recall plan in place you are already behind the eight ball as the need to quickly pull cannabis products off the shelf is happening with increasing frequency.
If you’re not familiar with products liability, the most important thing you need to know is that the marijuana industry isn’t immune from it just because marijuana remains federally illegal. And now that you know that, I suggest you read at least some of the following to better grasp how this can impact or even totally derail your marijuana business:
- Inaccurate Marijuana Testing Will Lead to Lawsuits
- California Proposition 65 and Marijuana: Know Your Obligations
- Marijuana Product Recalls: You Can’t Touch This
- Marijuana Retailers: Be Mindful of Products Liability
Just the mere fact that we have written so many articles on the topic of cannabis safety and cannabis product liability ought to tell you how truly important this issue is, and we really are just getting started.
So then what should you as a cannabis business owner do to protect yourself from product related lawsuits and government actions?
Oftentimes, one of the best ways to mitigate against product liability claims is by instituting a product recall. In most industries, recall standards are dictated by either federal or state law or both. But since marijuana is federally illegal, neither the Food and Drug Administration (FDA) nor any other federal agency has rules or guidelines on how to undertake a marijuana recall.
However, since the federal government “tolerates’ only the cannabis regimes of states with robust marijuana regulations, it is not surprising that most states with commercial marijuana laws require their licensed marijuana businesses have a recall plan in place as a condition for receiving state licensing. But few states have much in the way of specifics on what should go into a cannabis business’s recall plan. When our cannabis lawyers draft marijuana licensing applications for our clients, we are careful to make sure that the recall steps we map out in the licensing application recall plan can actually be relatively easily accomplished. A gold-plated grandstanding recall plan may sound great when you are working to secure your cannabis license, but if you can’t execute on or afford that plan, you are going to be in trouble.
In crafting a realistic marijuana product recall plan, you should, at minimum, consider or do the following:
1. Create an overall recall strategy.
2. As part of your recall plan, create definitions and standards for classes of recall and the depth and scope of any given recall. If your state or local laws do not provide basic recall standards for marijuana businesses, check out the FDA’s website under Guidance for Industry: Product Recalls, Including Removals and Corrections.
3. Appoint a recall committee within your company, to be led by experienced personnel capable of evaluating and investigating product complaints to determine if a recall is warranted. This also entails your developing a product complaint form that will be utilized by customers. It is better to learn about product problems early.
4. Develop a complaint receipt and evaluation method to ensure that your product complaint processing and investigations are logical, efficient, and comprehensive. There are few things worse than receiving product safety complaints and then ignoring them until the situation is out of control.
5. Truly ponder what your product complaint investigation will entail. What facts should the recall committee be seeking to determine if a complaint is valid or if a recall is warranted. What should your recall look like, as based on the facts and circumstances and the threat the product poses to consumers and vendors.
6. Create a distribution list so that your recall committee can quickly and easily identify all affected products and product lots for disposition and potentially destruction. The distribution list should also include the names of all affected consumers and vendors, their contact information, and the dates on which the products were sold to them or consumed by them, and it should also include any side effects, injuries, or illnesses resulting from product use. Time is of the essence here. My law firm had a regional food client that inadvertently failed to issue a recall notice to one of many supermarket chains to which it sold its food. This supermarket chain was so angry about having been kept out of the loop that it refused ever to purchase our client’s product again. Then other supermarket chains learned of our client’s mistake and they too ceased all of their purchasing. Needless to say, our client company no longer exists. Don’t let this sort of thing happen to you.
7. Institute a method of stock recovery so all tainted product in inventory is effectively quarantined from sale and distribution.
8. Generate your recall notice and be very careful with your wording in how you alert vendors and consumers to the recall. You want to effectively communicate that a product has been affected and how to deal with that, but you also want to minimize whatever liability your product problems may create for the company. On a case by case basis, consideration should also be given to drafting a press release to help the company’s PR. Regular readers know that we virtually never state that attorney help is required, but for this, attorney assistance is absolutely required!
9. Make sure to as quickly as possible (preferably in advance) to alert your outside advisors (your lawyers, your insurance broker, etc.) regarding your recall.
10. Set out in your recall plan your options for product disposition. Will you destroy a product? Cleanse and then repurpose it? Lay out your options in your plan now so that you are not scrambling to try to figure out your possible options later, when you have no time to do so.
11. Record everything you do. Document every effort you make and record all your communications with consumers and vendors. If there is a legal action later, you will want to be able to show the court that you took all reasonable steps to ensure consumer safety.
In addition to formulating a solid and reliable recall plan, you also might want to consider conducting a mock recall to ensure your recall systems will work when the real deal occurs. Compliance audits can also be a big help in shoring up loose ends on a recall.
Marijuana product recalls are only going to increase in 2016, so get your marijuana product recall in place now.
