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Cannabis Recalled Without Federal Regulation

The product recall by Denver-based marijuana cultivator Bonsai Cultivation reminds us all of the unique regulatory dynamic facing the cannabis industry. In this case, the cultivator – working with state officials – pulled marijuana products off the market because they may contain elevated yeast and mold counts. The recall followed a Denver Department of Public Health & Environment examination of dried marijuana samples.

This series of events is not far off how we would expect a similar matter to play out at a federal level with the FDA – only the federal agency has not provided clear direction and regulatory guidance around cannabis and CBD products. At least not yet.

While the marijuana industry waits for clarity on the FDA’s position related to cannabis, former Commissioner Scott Gottlieb recently said the federal government should regulate state marijuana programs. In his opinion, states “don’t have the capacity to both police what’s being sold in their so-called legal dispensaries as well as shut down the black market.” With that in mind, he shared his vision for a regulatory framework: one in which the FDA and other agencies such as the Drug Enforcement Administration (DEA) “could regulate what’s being sold for the potency, for the manufacturing, for the ingredients, for the claims that are being made.”

But there’s a long way to go before state and federal regulations are aligned.

In the meantime, we’ve written a whitepaper that shares our perspective and opinions on the challenges facing the industry, and what companies involved in the supply chain – from cultivator to retailer – should do to prepare for a cannabis crisis. Here’s a few of our topline thoughts:

  • Conduct a complete risk assessment. Identify the public health, agricultural and business risks you face. Score them based on their likelihood they would happen and the impact they would have on your company if they did. Be honest with yourself during this process. It will help guide your next steps.
  • Follow the risk assessment with scenario-specific crisis planning. Ask yourself what you would do if each incident or crisis happened. Talk about it internally, but also consider the impact on external audiences. How does it impact production? What do you do with product in the market? What would you say to regulators, suppliers, retailers and consumers?
  • Line up third-parties who can offer expert support. Product safety and quality issues, including recalls, are some of the most challenging situations any company faces. There are many factors to consider, including the expectations of regulatory agencies and consumers. Find a trusted partner who can help navigate the current regulatory environment and complex recall landscape.

Because of federal inaction to date, it’s tempting to think that there will be no federal regulatory violations. But take caution. Consequences could be substantial for companies that make a misstep. In fact, any consumer report or evidence of a product on the market, legally or illegally, that causes consumer harm is likely to draw scrutiny and potentially heavy-hitting response from regulators. Just take a look at what Juul is facing as regulators catch up with what had been an unregulated business.

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