California business owners that are in any way involved with putting goods and products in the hands of consumers - know all too well that products liability lawsuits are costly, time consuming, and extremely bad for business. The fallout can ruin a company’s reputation in a matter of days; and many companies never rebound from the damage.
A Costly Misunderstanding
Some cannabis business owners are operating are under a faulty assumption. Since cannabis products for medicinal and recreational uses remain federally illegal, they believe that they are free from FDA oversight and thus immune to product liability lawsuits. This is a misconception that could prove very costly.
It is true that, currently, the FDA’s role in marijuana regulation is limited to clinical and scientific research. Moreover, the FDA specifically states that the agency “has not approved any product containing or derived from botanical marijuana for any indication. This means that the FDA has not found any such product to be safe or effective for the treatment of any disease or condition.”
However, cannabis operators are still subject to product liability lawsuits based on state claims of dangerous, defective, and/or mislabeled products - California included. Therefore, it is prudent for businesses (including retailers, suppliers, distributors, and manufacturers) to recognize and remain mindful that their exposure to these legal claims not only exists, but may become prevalent in this very young industry.
What Can California Cannabis Business Owners Do To Minimize Exposure to Product Liability Lawsuits?
As cannabis operators become subject to the plethora of regulations imposed under California’s newly-enacted MAUCRSA, one important and highly-advisable plan of action that affected businesses can undertake is to establish sufficient product recall plans now, rather than later.
Important Components to a Successful Product Recall Plan
At CKB Vienna LLP, we help businesses develop and craft comprehensive product recall plans that our clients can readily set into motion if ever necessary. You should contact our firm before drafting a product recall plan and even moreso if you are ever faced with a potential claim.
Some very general and basic components that your business should incomporate into any product recall plan include the following:
The creation of a general, overarching strategy
The creation of consistent definitions and classifications of various types of recalls (including scopes and depths)
The formation of a committee - led by a responsible and experienced member of the business - responsible for comprehensively and consistently examining and investigating product complaints. This same committee can then trigger the recall plan if necessary
The creation of an accurate and current distribution list - containing consumer, supplier, and vendor names, contact information, and dates of purchase - that can be accessed easily and quickly
This list is useless and potentially harmful if outdated and/or incomplete
Creation of a list of options for isolating potentially-unsafe products
FIRM INSTRUCTIONS TO CONTACT YOUR LEGAL COUNSEL BEFORE ISSUING ANY STATEMENTS OR RESPONDING TO ANY COMMUNICATIONS REGARDING CLAIMS!!!!!
Recording and documenting everything that you read, hear, see, do, and say from the moment anyone in the business becomes aware of a potential claim
CKB Vienna LLP—Experienced Commercial Law Attorneys and Advisors That Can Help Your Cannabis Business Minimize Your Exposure to Product Liability Claims
Numbers of California cannabis operators are beginning to experience the benefits associated with the growing industry of recreational marijuana. However, as with all business ownership and operation, there are inherent risks when manufacturing, distributing, supplying, selling, and otherwise making products available to public consumers. Therefore, prudent and proactive business owners turn to experienced commercial attorneys to minimize these risks.
For years, CKB Vienna LLP has helped businesses develop product recall plans and protocols. We also have significant experience working with and helping our cannabis-business clients with a number of legal matters specific to the unique cannabis industry. A thorough understanding of the applicable rules and regulations is essential in this continually-changing area of law; and we pride ourselves in staying abreast of all trends and developments. Let us help you plan for the future. Contact us today.
We have offices in Rancho Cucamonga, San Bernardino, and Los Angeles. Contact us by telephone—909.980.1040—or complete our online form.