New Prop 65 Label Requirement Effective January 3, 2021

This entry was posted on Friday, December 25th, 2020 and is filed under Cannabis Law, Consumer Protection, Corporate Law.

PROPOSITION 65

Approved in 1986, California Proposition 65 (“Prop 65”) requires the Governor to publish a list  of chemicals known to cause cancer or reproductive harm. The list is revised and republished in light of additional knowledge at least once per year. The list of chemicals can be found here: https://oehha.ca.gov/proposition-65/proposition-65-list

Businesses subject to Prop 65 are required to provide a “clear and reasonable” warning before knowingly and intentionally exposing anyone to a listed chemical, unless the business can show that the anticipated exposure level will not pose a significant risk of cancer or is significantly below levels observed to cause birth defects or other reproductive harm. The requirement to provide warnings takes effect one year after a chemical is added to the list.

DELTA-9 THC, CANNABIS SMOKE, REPRODUCTIVE TOXICITY

Cannabis smoke has been listed as a Prop 65 carcinogen since 2009. However, on January 3, 2020, California’s Office of Environmental Health Hazard Assessment (“OEHHA”) added delta-9 THC and cannabis smoke to the Prop 65 list of chemicals known to cause reproductive toxicity
Cannabis businesses that manufacture, distribute, and sell cannabis products, including hemp-derived CBD products, must ensure that the labels on cannabis and cannabis products provide a clear and reasonable warning to California consumers that the products contain chemicals known to cause cancer or reproductive harm. Thus, the recent addition of delta-9 THC and cannabis smoke the list of chemicals requires all cannabis businesses update their Prop 65 warning to address both cancer AND reproductive harm.

JANUARY 3, 2021

Cannabis businesses have until January 3, 2021 to comply with this new requirement. However, if a product enters the stream of commerce before January 3, 2021 without the required warning and is sold at a retail cannabis business on or after January 3, 2021, then all businesses involved with that product (manufacturers, distributors, retailers) must ensure that the warning be placed somewhere conspicuous so that consumers can see it, such as on the store shelf, on the retailer’s website, and on the receipt. 

Retailers must ensure that all Prop 65 signs placed in conspicuous areas on the premises are updated to include the warning for reproductive harm. Retailers must also ensure to update the warning on the retailer’s website for consumers who place orders through the website. Manufacturers and distributors must ensure that cannabis products include the warning for reproductive harm on the immediate container that holds the product or on the outer packaging, provided it can be clearly and reasonably be seen by the consumer prior to exposure. Warnings may be written in short form if the packaging does not allow space for the long form version.

ENFORCEMENT ACTION

Enforcement actions are typically brought by private litigants. The majority of private litigants are consumers who search for products with the goal of finding products with incorrect or missing labels, to then file a notice of violation and ask for a monetary settlement. Many cannabis businesses have been experiencing an influx of similar cases related to American Disabilities Act (“ADA”) compliance for websites that lack accessibility for the blind and brick-and-mortar premises compliance that lack accessibility for the blind and physically disabled. Most businesses choose to settle with these litigants based on a cost-benefit analysis – the cost of hiring an attorney to litigate the case which can range about $20,000 versus a settlement for $3,000. To avoid these unnecessary expenses, cannabis businesses should take the time to ensure that all of their products are in compliance with the regulations. 

If you have any questions or would like to have your product labels reviewed to ensure compliance with all regulations, please do not hesitate to reach out to a cannabis attorney at Katchko, Vitiello & Karikomi, PC.

By Nellie Niakossary, December 25, 2020