Product Recalls Threaten Cannabis Industry - How Can Business Protect Themselves?

If you haven't seen the headlines, Oregon Liquor Control Commission has issued another marijuana recall for products cultivated by Emerald Wave Estate, LLC. The product, marijuana flower, was transferred to Buds 4 U in Mapleton, Oregon and they then sold the product to 31 customers according to the OLCC tracking system.

The strain was called “Blue Magoo” was found contaminated with Pyrethrins above the allowable levels. The dispensary notified the OLCC when they noticed a positive pesticide result in the tracking system. They immediately removed the product from the shelf and issued a voluntary recall for the tainted product. The possible health impact of consuming marijuana products with unapproved pesticide residues is unknown. Short and long-term health impacts may exist depending on the specific product, duration, frequency, level of exposure, and route of exposure

Defective products cause bodily harm, property damage and production haults. The process of defending litigation or even coming up with a settlement agreement can completely drain a company’s resources. When dealing with cannabis product liability suits, businesses will also have to deal with regulatory compliance, producing and distributing product warnings, recalling products, claim investigation, product testing and additional risk assessment. Where there is a cannabis product liability suit there will be attorneys, experts, and possibly consultants that can all get very expensive very quickly. Lawsuits can range from a single plaintiff seeking damages for personal injuries to class action law suits where a defective product is tied to an entire group of claimants. Even the most standard cannabis product liability claim could financially crush any cannabis business owner that is not prepared with the proper risk management strategy.


In the event your company is sued by someone claiming harm, you will need Product Liability Insurance. This type of coverage pays for your damages and legal expenses, and will also pay for medical fees of those who were harmed.


Summary

While every business owner works to avoid product recalls, they can and do occur. To learn more about how we can protect you and your business from product liability claims, contact Eric Rahn at eric@s2sinsurance.com or schedule a free 15-minute consultation by clicking here.