How to Prepare and Protect Your Cannabis Brand from Product Liability Lawsuits

As many in the cannabis industry know, one of the rallying cries of the cannabis decriminalization and legalization movement has been that cannabis (marijuana) use is not as harmful as was once believed, and in fact is largely safe and can even be therapeutic for some. While therapeutic properties of cannabis have positively impacted many, we are also learning that cannabis use may not be entirely harmless for all populations all the time. Amid the ongoing expansion of the cannabis industry, there is a growing concern that the health risks associated with cannabis use, particularly high-potency THC products, are being overlooked.

As concerns and reports of actual harms grow, and new data emerges, product liability lawsuits become an increasing threat to cannabis brands. Cannabis brands and their employees, including retail associates, must stay informed about the latest research and consider new ways of avoiding product liability claims.

Understanding Product Liability in the Cannabis Industry

Product liability refers to a manufacturer or seller’s responsibility for any harm caused by their products. In the case of cannabis, this could include health issues resulting from consumption of cannabis products, whether from contaminants, improper labeling, or even the psychoactive effects of the product itself.

Cannabis companies can face product liability lawsuits on several grounds:

• Design defects: Claims that the product is inherently dangerous when manufactured and used for its intended purposes, due to its high THC potency, for instance.
• Manufacturing defects: Issues during production, such as contamination with pesticides, mold, or other harmful substances.
• Failure to warn: Inadequate warnings or lack of proper instructions regarding potential side effects or risks of use.

Historically, product liability has been a major concern for industries such as tobacco, pharmaceuticals, and food, all of which have seen massive lawsuits for health-related issues. Cannabis companies have thus far largely been spared from such lawsuits, partly because the research has not existed to link cannabis products to harms.

As cannabis laws have relaxed, cannabis products have become more potent, and cannabis use has become more mainstream, the effects of cannabis on various populations can be better studied. This is beneficial for understanding the medicinal value of various cannabinoids but is also fueling a growing body of scientific research regarding harms caused by cannabis use.

The Rising Use of High-Potency THC Products

One area of particular concern is the proliferation of high-potency THC products, such as concentrated oils, waxes, and edibles. THC, or delta-9-tetrahydrocannabinol, is the psychoactive component of cannabis responsible for the “high” that users experience. Over the years, the THC content in cannabis products has skyrocketed. Flower smoked in the 1960s and 70s typically contained THC concentrations of around 2-5%, while flower today typically clocks in around 20-30% THC. Concentrate products such as vape pens and waxes for dabs can contain THC levels as high as 90%. At the same time, CBD content, which can temper some of the effects of THC, has decreased.

A growing body of research highlights that high-THC, low-CBD products may carry more risks than initially understood. For instance, a study published in The Lancet Psychiatry in 2019 found that daily cannabis use was associated with increased odds of psychotic disorder compared with never users, and daily use of high-potency products increased the odds of psychosis by nearly five times. This study and others are beginning to be written about in high-profile publications such as The New York Times.

Vulnerable and High-Risk Populations

Cannabis brands should take into account scientific research showing that certain populations are more vulnerable to the adverse effects of cannabis use. These especially include adolescents,  young adults, people prone to cannabis hyperemesis syndrome, and people with pre-existing mental health conditions.

Cannabis companies may face lawsuits if these high-risk populations experience harm after using their products, especially if they did not receive clear warnings about the potential dangers. Cannabis brands should ensure that they and their employees understand which populations might be most susceptible to harms from using their products, and consider including clear warnings on labels, packaging, and educational materials. Cannabis retailers should strongly consider educating their budtenders on potential harms and high-risk populations, as dispensaries are also being implicated in failure to warn suits.

What Cannabis Brands Can Do

To protect themselves from the growing threat of product liability lawsuits, cannabis brands need to take proactive steps. These include:

• Clear labeling and warnings: Ensure that products have clear and accurate information about THC potency, dosage instructions, and potential risks. Special warnings for vulnerable populations, such as individuals with mental health conditions, should be strongly considered. Advertising, websites, and other promotional materials may also be updated with appropriate warnings.
• Third-party testing and quality control: Regular testing for contaminants and consistency in THC levels can help ensure that products meet safety standards and reduce the risk of harmful side effects.
• Educating consumers: Brands should take an active role in educating consumers and retail associates about the potential risks of cannabis use, particularly high-potency products. This can be done through marketing campaigns, partnerships with health organizations, and in-store education initiatives.

In addition, companies should consider obtaining product liability insurance, and if a policy is already in place, be sure to understand its coverage and limitations.

In short, the time to act is now: brands that take steps to ensure product safety, provide proper warnings, and educate consumers will be better positioned to protect themselves from costly legal battles in the future.

Holon Law Partners has 100+ years of experience combined guiding clients through complex cases and legal intricacies. Our approach is empathetic, customized, and client-centered with a focus on you and your unique business needs. To schedule a consultation with us, call our team at (866) 372-0726 or email us at: info@holonlaw.com.