Cannabis and Hemp-Derived Products Subject to New Prop. 65 Warning Requirements in California

February 22, 2021 Articles
Cannabis Business Times

California’s regulatory framework for cannabis and hemp-derived products, including CBD, continues to evolve, most recently via updated Proposition 65 warning requirements that came into full effect Jan. 3, 2021. As of that date, anyone offering for sale cannabis and hemp-derived products in California must provide an appropriate warning in accordance with the current regulations, with limited exceptions.

Noncompliance with the new regulations may result in government or private prosecution, with potential penalties of up to $2,500 per day for an alleged violation.

Proposition 65 Warning Requirement

California’s Safe Drinking Water and Toxic Enforcement Act of 1986, commonly known as Prop. 65, requires the state of California to maintain an updated list of chemicals known to the state to cause cancer or reproductive toxicity.

Persons or companies who offer products for sale in California containing Proposition 65-listed chemicals must provide a “clear and reasonable” warning to the consumer (with limited exceptions) or face the prospect of penalties. Businesses usually choose to apply either the standard or “short form” default warnings provided in the Proposition 65 regulations, as these are deemed presumptively “clear and reasonable,” whereas any other warning language runs the risk of being challenged as noncompliant.

Prior Proposition 65 Requirement Limited to Smokable Cannabis

“Marijuana smoke” was added to the Proposition 65 list in 2009 solely as a cancer-causing agent. After that date, a cancer-specific warning was required for all smokable cannabis. In addition, if a cannabis product contained other Proposition 65 listed chemicals—such as certain heavy metals or pesticides—warnings for those chemicals were also applicable.

However, THC was not a listed Proposition 65 chemical. As such, no warning was required for non-smokable cannabis products, including edibles or hemp-derived CBD products, unless those products contained other listed chemicals.

Until recently.

New Chemical Listings Expand Warning Requirement, Including to Hemp-Derived CBD

On Jan. 3, 2020, the state of California agency that oversees Proposition 65 (the Office of Environmental Health Hazard Assessment, known as OEHHA) updated the Proposition 65 list to add “cannabis (marijuana) smoke” as a reproductive toxin causing developmental harm (in addition to the prior listing as a cancer-causing agent) and add Δ9-tetrahydrocannabinol (Δ9-THC) as a reproductive toxin causing developmental harm.

The one-year grace period to provide adequate warnings based on these new listings expired on Jan. 3, 2021.

As such, to avoid a potential claim of a Proposition 65 violation:

  • persons offering for sale smokable marijuana should now be providing appropriate warnings that address both cancer and reproductive/developmental harm, and
  • persons offering for sale any THC-containing products—including, but not limited to, edibles/concentrates/vapes and hemp-derived CBD products—should now be providing an appropriate reproductive harm warning.

It is important to note that the warning requirement applies to any products offered for sale as of Jan. 3, 2021, not just products manufactured or distributed to retailers after that date. Any items “on the shelf” (either physically or online) after Jan. 3, 2021 are subject to the newly applicable Proposition 65 warning requirements, regardless of packaging dates. Products sold online generally require online warnings at the website point-of-sale, in addition to warnings on the product itself.

The “Safe Harbor” Exemption for Low Levels of Exposure: Not So Safe

Proposition 65 does provide an exemption from the warning requirement if a business can demonstrate that the exposures caused by its product create “no significant risk” (if the chemical is listed as a carcinogen) or cause “no observable effect” (if the chemical is listed as a reproductive toxicant). However, it is very difficult for businesses to take advantage of this exemption in a cost-effective manner.

Even where OEHHA has set numeric “safe harbor” thresholds for listed chemicals, those thresholds only identify the volume of chemical per day that is considered safe for a person to be exposed to. Determining how that safe harbor number applies to use of a product containing the chemical requires a product-specific exposure analysis by a toxicologist or other qualified expert.

An exposure analysis involves a number of complex factors, including the route of exposure (e.g., inhalation, skin contact, eating/drinking) and the amount of product to which the range of potential customers is exposed on a daily basis.

For products subject to Proposition 65 because of the marijuana smoke or THC listings, this analysis is even more difficult, as neither chemical has an OEHHA-approved safe harbor threshold. As such, the toxicologist or other expert would need to propose such a threshold themselves, based on a review of the totality of available scientific evidence, as the starting point in their analysis.

Not surprisingly, exposure assessments are expensive and time-consuming. In addition, they often result in a determination that a warning is, in fact, required. Finally, even where the assessment would support use of the safe harbor exemption, the cost of defending use of the exemption in potential litigation with a governmental or private enforcer often outweighs the cost and burden of providing a warning.

Impact of New Requirements: Potential Legal Enforcement and Penalties

Persons violating the new Proposition 65 requirements could face enforcement actions by the California Attorney General, district attorneys or (in cities with populations of over 750,000) city attorneys. Importantly, even if government enforcement does not occur, penalties may also be sought by private “citizen” enforcers of Proposition 65, who are very active across California. In addition to seeking recovery of up to $2,500 per day of an alleged violation, enforcers may also seek recovery of their attorneys’ fees in prosecuting the action.

Citizen enforcers must serve a notice of the alleged violation at least 60 days prior to initiating an enforcement action in court. Anyone receiving such a notice should promptly seek advice from an attorney experienced with Proposition 65, with the goals of promptly:

  • identifying and enforcing any potential right to defense and indemnification from another party in the chain of distribution for the product at issue;
  • determining whether a viable defense to the Proposition 65 claim may exist: for example, businesses employing under ten persons are exempt from providing warnings (although such a business may have indemnified a party in the chain of distribution that is not exempt);
  • if appropriate, negotiating a prompt settlement with the citizen enforcer, before the enforcer incurs attorneys’ fees to initiate a court proceeding at the expiration of the 60-day notice period.

For these reasons, anyone offering for sale cannabis and hemp-derived products in California should ensure they are implementing Proposition 65 warnings in accordance with the current listings and regulations, absent a strong technical and legal basis for asserting that an exemption applies.