Cannabis product recallYesterday, the Washington State Liquor and Cannabis Board (“Board”) adopted emergency rules to (finally) address recalls of defective and dangerous marijuana and marijuana products. The rules are fairly short and there are some ambiguities in them, but this is a start towards ensuring consumer safety and that Washington’s marijuana marketplace produces and distributes product fit for consumption. As I predicted last month, marijuana product recalls are coming to Washington. The emergency recall rules can be found here.

Under the new emergency rules, recalls can be initiated by both the Board and by licensees under certain circumstances. A full blown recall is required when “cir­cumstances exist that pose a risk to public health and safety.” Factors that will determine a recall situation include evidence that pesticides not approved by the Board were used or are present on marijuana plants or evidence of another condition that poses a risk to public health or safety.

Essentially, there are going to be three types of product recalls or withdrawals from here on out:

1. Exempt market withdrawals;

2. Licensee-initiated recalls; and

3. Board investigation-initiated recalls.

Pursuant to an exempt market withdrawal, which won’t be subject to the more comprehensive recall steps set forth in these rules, [a] licensee may withdraw from the market marijuana, usable marijuana, marijuana concentrates, or marijuana-infused products by its own determination for reasons that do not pose a risk to public health and safety such as for aesthetic reasons or other similar defi­ciencies in product or packaging.

The Board does not define “aesthetic reasons,” which begs the question as to whether a licensee can ask for a market withdrawal if it doesn’t like another licensee’s packaging, or if these market withdrawals can only be undertaken by the producer or processor of the product. Clearly, pulling a product for faulty labeling and packaging speaks for itself because that product has inherent shortcomings that affect consumers. Note though, exempt market withdrawals are at the licensee’s discretion and they deal only with product that does not “pose a risk to public health and safety.”

For more serious product defects that do threaten public health and safety, the Board is going to allow licensees to do their own product recalls. If the licensee opts to do this recall, the licensee must do the following:

Immediately notify the local Board enforcement officer and secure, isolate, and prevent the distribution of all marijuana, usable marijuana, marijuana concentrates, or marijuana-infused products that may have been exposed to the condition warranting the recall. The licensee is prohibited from destroying any affected prod­uct prior to notifying the Board and coordinating with the local Board officer on destruction activities.

If the Board determines the cannabis licensee “fails to engage in re­call efforts that meet the urgency of the risk to public health and safety, the Board may seek a board-directed recall.”

Which brings us to Board investigated/initiated recalls. If Board enforcement investigates a marijuana operation and believes that a recall should be instituted to protect public health and safety, enforcement will make such a recommendation to the Board and will request a recall. “If the Board issues a recall, the [enforcement division] notifies the affected licensee that is the source of the issue giving rise to a re­call.”

Finally, the Board will force licensees to undertake a recall plan. We previously wrote how all marijuana businesses should have their recall plans in place, regardless of whether state law fails to mandate them. Now that Washington has a state law essentially mandating one, there can be no excuses:

An affected licensee must develop a recall plan in a timely manner that sets the procedures for the recall of affected product. If the affected licensee distributed affected product to con­sumers or to retailers, the affected licensee must immediately notify all licensees that received affected product, and issue a press re­ lease and other appropriate public notification to inform consumers of the recall and identifying information about the affected product re­called.

The new recall rules require all recall plans contain, at minimum, the following:

  1. Designation of a member of the licensee’s staff who serves as the licensee’s recall coordinator;
  2. Procedures for identifying and isolating product to prevent or minimize its distribution to consumers;
  3. Procedures to retrieve and destroy product; and
  4. A communications plan to notify those affected by the recall, including how the affected licensee will notify other licensees in pos­session of product subject to the recall; and the use of press releases and other appropriate notifica­tions to ensure consumers are notified of the recall and affected product information if the affected product was distributed to consum­ers.

The affec­ted licensee must also “ensure recall procedures are conducted to maximize recall of affected product and minimize risks to public health and safety.”

The rules make no mention of re-purposing tainted product. We take this to mean that destruction of the product appears to be the only option, with the Board deciding if and when the recall has been effective and when it will end. If a licensee fails to follow a mandated recall plan or to adhere to these recall standards, the Board will do a directed recall on its own. Regarding the reputational risk and fall-out from recalls, the Board will also maintain a recall web page on its website “of all current and closed recalls of record.” You do not want your cannabis business to be on this list!

We expect recalls to really start heating up in Washington. Just ask Colorado.

 

 

 

  • MrDavidBrown

    Canada has a robust regulatory system. Look north!