How to Handle a Marijuana Recall

The potential for a marijuana recall exists as the marketplace has already experienced the following marijuana recalls:

• Green Cross | location: Colorado | recall date 10/30/15
• Gaia’s Garden | location: Colorado | recall date 11/03/15
• Mountain High Suckers | location: Colorado | recall date 12/30/15

The above recalls were all due to banned pesticide chemicals being used in the production process.
Based on the above incidents it begs to ask the question does your business know how to handle a marijuana recall?

The marijuana business insurance application process requires you to address if you have a marijuana recall plan which needs to be in order to be eligible for products liability. As a refresher marijuana product liability insurance provides protection in the event that someone gets injured as a result of consumption of a cannabis product. You can be held liable, even without knowledge of any defect in the product, from a lawsuit of someone getting sick or injured. Anyone in the supply chain (grower, extractor, dispensary, lab) will be at risk from a lawsuit whether or not it was known the product was defective and will be held liable.

According to the Consumer Product Safety Commission (CPSC), a consumer product recall is the removal of a product that does not comply with legislation, or poses an unacceptable risk to the health and safety of consumers or users from distribution, sales, or use by a consumer.

Having an effective and efficient marijuana recall plan will:

• Protect your customer from bodily injury and property damage;
• Comply with federal and/or state regulatory requirements;
• Protect your business assets.

The CPSC provides information that is helpful for manufacturers and retailers in implementing a consumer product recall. On the this web page select the hyperlink “Download the Handbook”. This document will help your marijuana business understand your obligations and responsibilities under the Consumer Product Safety Act. It applies to you if you manufacture, import, distribute, or retail consumer products.

Your marijuana recall plan should be created well in advance and should describe in detail your recall procedures, including a breakdown of specific employee and outside expert responsibilities. By the time your company finds itself in the eye of the storm, it will be too late. While every recall plan is different, there are several broad components that are universally applicable that should be included within your recall plan.

• Corporate organizational structure: Beyond a visual and descriptive organization chart, this section should clearly map out all supply chain operations, including raw and component material or nished product suppliers, processors (sterilization, packaging, labeling, etc.), distribution centers, wholesalers, retailers, users, and consumer consignees.
• Definition and responsibilities of the recall management team: This section should include a clear outline of the specific authority and responsibilities of each individual, department, and affiliate. The plan should also include contact information for each member of the recall management team and backup personnel.
• Fact gathering: This section should explain the process for gathering information about the defective product. Fact gathering is essential for determining the following, which will help determine the parameters of a recall:
  • Root Cause: Determine the cause of the product defect, which will shed light on a solution, as well as future prevention strategies.
  • Product Inventory: Define the process for determining how to get affected product back (i.e. through product retrieval or returns), as well as how to determine where affected product is in the supply chain so you can halt and control movement. At the same time, you need to assess current levels of non-affected product that can be utilized for fulfillment remedy.
• Health significance: This section should provide the procedure for determining the actual or potential hazards posed by the recalled product in order to develop an appropriate recall strategy that addresses the type and level of notification and correction or removal required.
• Regulatory agency notification: This section should designate personnel responsible for, the means of, and the timing for providing the appropriate regulatory agency with necessary information to classify, monitor, and terminate the recall.
• Recall communication: This section should outline when and how to appropriately inform affected parties and answer questions from the distribution chain, the media, and consumers. This section should detail who is responsible for communicating with third-party advocates, supply chain partners, consumers, government officials, the media, and the public.
• Closing out a recall: This section should clearly define your company’s policy and procedures for closing out a recall.

Note because the FDA has jurisdiction over most foods and all cosmetics, drugs, and medical devices one of the most useful documents to reference as you develop your marijuana recall plan can be found here.

I specialize in marijuana business insurance, having an effective and efficient marijuana recall plan will:

• Protect your customer from bodily injury and property damage;
• Comply with federal and/or state regulatory requirements;
• Protect your business assets.

If you’re interested in discussing marijuana product liability insurance or would like to receive a quote please call me at (503)-922-4847 or select “Request a Quote” below.

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