Insights
Publications

Cannabis Industry, Including CBD Products, Subject to New Proposition 65 Warning Requirements

January 20, 2021 Articles

Updated Proposition 65 warning requirements for cannabis products came into effect on January 3, 2021. As of that date, anyone offering for sale cannabis products in California—including hemp-derived CBD products—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.

Prior Proposition 65 Requirement was Limited to Smokeable Cannabis

California’s Safe Drinking Water and Toxic Enforcement Act of 1986, commonly known as Proposition 65, requires the State of California to maintain an updated list of toxic substances known to the state to cause cancer or reproductive toxicity. Persons or companies who offer products for sale in California containing Proposition 65-listed substances must provide an appropriate warning to the consumer (with limited exceptions), or face the prospect of penalties of up to $2,500 per day. 

“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 smokeable cannabis. In addition, if a cannabis product contained other Proposition 65 listed substances—such as certain heavy metals or pesticides—warnings were applicable. However, THC was not a listed Proposition 65 substance. As such, no warning was required for non-smokeable cannabis products, including hemp-derived CBD products, unless those products contained other listed substances.

New Requirements Expand Proposition 65 Requirements, Including to Hemp-Derived CBD

On January 3, 2020, the State of California agency that oversees Proposition 65 (the Office of Environmental Health Hazard Assessment) updated the Proposition 65 list to (1) add “cannabis (marijuana) smoke” as a reproductive toxin causing developmental harm (in addition to the prior listing as a cancer-causing agent), and (2) 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 January 3, 2021. As such, to avoid a potential claim of a Proposition 65 violation:

  • persons offering for sale smokeable 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 January 3, not just products manufactured or distributed to retailers after that date. Any items “on the shelf” (either physically or online) after January 3, 2021 are subject to the newly applicable Proposition 65 warning requirements, regardless of packaging dates.

Impact of New Requirements – Potential Legal Enforcement and Penalties

Given the heavily-regulated nature of the cannabis industry, 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. However, even if government enforcement does not occur, penalties may also be sought by private “citizen” enforcers of Proposition 65, who are very active across the state. 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 the alleged violator with 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 legal advice from experienced Proposition 65 defense counsel, with the goals of promptly:

  • determining whether a viable defense to the Proposition 65 claim may exist;
  • identifying and enforcing any potential right to defense and indemnification from another party in the chain of distribution for the product at issue;
  • curing any alleged violation, in order to limit the number of days for which penalties may be available;
  • if appropriate, negotiating a prompt settlement with the citizen enforcer, before the enforcer incurs attorneys’ fees to initiate a court proceeding.

Firm Highlights

Publication

How to Guard Against 3 Cannabis Cyber Attack Risks

Cyber attacks are now commonplace. Ransomware attacks, in particular, have skyrocketed in frequency and size. High-profile data breaches have cost businesses in the United States millions of dollars in losses and incalculable reputational harm...

Read More
News

Cannabis Practice Creates Ethical Traps, Conflicts for Lawyers

Ryan Lowther was quoted in the Bloomberg Law article, "Cannabis Practice Creates Ethical Traps, Conflicts for Lawyers."   Read the full article here .

Read More
Publication

California Cannabis Appellation Program

The specific location of a product’s origin is more important with some products than others.  Wine is the classic example, as the dirt and surrounding climate in which grapes are grown can have a...

Read More
Publication

Complying With the TCPA After the Facebook Supreme Court Decision

Many cannabis dispensaries rely heavily on text messaging marketing programs to reach their customers and to create loyalty in an increasingly competitive market. While text messaging programs may be an effective marketing tool, they...

Read More
News

California Cannabis Industry Moving to Market Where Its Product Is Grown

Ashley Roybal-Reid spoke to the North Bay Business Journal about California's new cannabis appellation program.   Read the full article here .  Related Farella publication:  California Cannabis Appellation Program

Read More
News

Chambers USA 2021 Recognizes Farella Braun + Martel Attorneys, Practices

Farella Braun + Martel announces that Chambers USA has recognized 13 lawyers and 6 practice areas in the legal directory’s 2021 edition. Individual Rankings: Tyler Gerking – Insurance: Policyholders Jeffrey Hamilton – Cannabis Law...

Read More
News

Key Cyber Insurance Issues Hitting the Cannabis Industry

Tyler Gerking was quoted in the article "Key Cyber Insurance Issues Hitting the Cannabis Industry." Read the full article here . View full webinar below.

Read More
News

Farella Braun + Martel Ranked in Legal 500 United States 2021

Read More
Publication

Cyber Insurance for the Cannabis Industry

Farella's Shanti Eagle (moderator), Nate Garhart and Tyler Gerking, along with guest speakers Javier Gonzalez and Michael Peters from PL Risk Advisors, discuss "Cyber Insurance for the Cannabis Industry." Cannabis businesses have cyber security...

Read More
Publication

How Changes to California’s Fire Regulations Could Affect North Coast Housing Projects

Both the Board of Forestry and the State Senate are considering changes to state fire regulations that would affect real estate development in California. The first set of changes can be found in the...

Read More