News and Best Practices

Be Prepared for Product Recalls

September 20, 2016

Product recalls are an unfortunate possibility for any business, but dispensary owners in particular must be prepared for them. All products are subject to recall, including bud, edibles and other cannabis products.

The goal of product recalls is to notify consumers quickly and keep them safe, healthy and happy, while limiting liability for the business. Recalls can be mandated by state regulating authorities, or a voluntary recall may need to be issued by a vendor that discovers a potential safety issue.

Reasons for product recalls

Many things can trigger the recall of cannabis or cannabis-related products:

  • Use of an unapproved/banned pesticide
  • Discovery of an unsafe substance used in production
  • Finding mold or rot in the product
  • The product itself being deemed unsafe (such as an unsafe rig or vaporizer)
  • Reports of illness or adverse side effects from the product

Some states require dispensaries to submit a product recall plan along with their initial application for a license to operate. If your dispensary already has procedures in place, periodically review them in light of how your business currently operates, as well as to prevent any deficiencies that occurred in any prior recalls. If your business doesn’t have a plan, it’s imperative to develop one before a recall occurs.

Developing a plan of action

Anytime a customer complains or notifies you about an adverse event, you should investigate, document and track the incident. Also, preserve your records in case the situation develops into a lawsuit.

A good plan of action will include the following items:

  • The name of the employee who will be in charge of monitoring any potential issues, documentation and notification
  • Identification of who and what is responsible
  • Processes to immediately test, if lab tests have not been conducted or if retesting is warranted
  • Procedures to determine the total quantity produced or distributed, and when it was produced and received
  • Steps for how to segregate and store any questionable inventory
  • How and when to properly dispose of products not passing requirements
  • A timeline for reporting to relevant regulatory departments
  • A procedure for quickly identifying all purchasers of the product
  • Methods you will use to contact purchasers in the most effective and appropriate manner, including multiple pre-planned approaches like emails, text messages, posting notices in the store and on the website
  • A plan to remedy the situation with customers that includes whether there will be a refund or product exchange issued, and what to tell the consumer about what to do with the product
  • A process to identify and notify all other vendors and persons in the supply chain
  • A procedure for contacting your attorney to draft a notice of voluntary recall that will help limit liability. By the way, you’ll also want your attorney to look over all of your procedures)
  • A plan to handle the financial repercussions of the recall

You should also consider purchasing product recall insurance.

Not handling a product recall correctly can open a dispensary and all businesses and individuals involved to greater risk. This is especially true if a consumer was found to be injured and has suffered damages, and your response was inadequate. Having a plan of action in place will help protect your customers and you.

 

Additional Resources

U.S. Consumer Product Safety Commission’s Recall Guidance Handbook: http://www.cpsc.gov/en/Business–Manufacturing/Recall-Guidance/

 

By: Devon Landis
Dispensary Management Today articles are for informational purposes only and should not be considered legal guidance or advice on dispensary operations. You should contact an attorney or a qualified cannabis consultant for specific compliance and dispensary/retailing advice.
© 2016 CAN Performance Group, LLC. All rights reserved.

 

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