.Labeling Laments: Packaging and label regulations are a major challenge to the expanding cannabis industry

When California cannabis companies prepare to go to market with a new product, they often run their label designs past a lawyer. And if they don’t, they should. The laws and regulations governing product labels in the state are so numerous and so byzantine that Griffen Thorne, an attorney with the cannabis law firm Harris Bricken, says he’s never seen one that passed muster on the first try.

Some of those companies are large and highly professional, but nevertheless, “I can’t recall a single instance in which I didn’t catch at least a few problems that needed changing,” he wrote recently on the firm’s blog.

And the rules are getting more—not less—complex as time goes on. In January, all cannabis products came under Proposition 65, which requires companies to add warnings to products containing any one of about 1,000 chemicals the state has determined might cause reproductive harm. Cannabis smoke has always been governed by Prop. 65, but now the Office of Environmental Health Hazard Assessment has added THC to the list. For now, at least, that covers all cannabis products, even hemp and CBD products, which, although you can’t get high from them, contain trace amounts of THC. The state sets “safe harbor” standards for covered products that contain only trace amounts of listed chemicals, but has not done so yet for hemp and CBD.

But labeling regulations have been a major challenge for cannabis companies since the passage of the Medicinal and Adult-Use Cannabis Regulation and Safety Act, which codified Prop. 64, the measure that voters passed in 2016 to legalize weed for adult use. The section of the law that covers packaging is long, and such a morass that it can’t be succinctly described. Hence the need for lawyers.

There are rules for manufactured products like vapes and edibles, and separate ones for flower and pre-rolls. And edibles have their own, separate set of rules as well. The law governs everything from the size of typefaces to colors to whether words can be set in a bold font. Labels must include the cannabinoid content, such as the levels of THC. Packages can’t be appealing to children—for example, no use of the word “candy” is allowed—and all packages must bear the cannabis symbol: a pot leaf with an exclamation point next to it, set in a triangle.

With many products, it’s a major challenge just to fit all the required information on the label, never mind conforming to all the insanely detailed design requirements. And of course, the rules mean a lot more work for lawyers. Prop. 65 means more yet: the law enables prosecutors to go after companies that run afoul of the law, but also enables citizens to do so privately. With cannabis and every other product governed by the law, Prop. 65 provides “fertile ground for private plaintiffs who bear a relatively low burden of proof in alleging that exposure occurred,” said attorney Henry Baskerville of Fortis Law Partners. Private citizens who lodge successful complaints collect a quarter of the proceeds of any penalties imposed. “This is low-hanging fruit for lawyers who want to make a quick buck, and don’t want to do a lot of work,” Lara DeCaro, a San Francisco attorney, told MJ Biz Daily last year.

The way the law is written, any company in the supply chain might be liable for labels that don’t comply. That means retailers, for example, can be held responsible for stocking non-compliant products. That has led to what is in effect a form of industry self-governance. But it has also led to companies across the supply chain spending a lot of time and money worrying about labels. And it’s not only a burden for smaller companies, Thorne noted in his blog post. “Mistakes in mockup cannabis labels speak less to sophistication of cannabis businesses,” he wrote, but more to “California’s over-regulation. There are simply too many rules about what must be included, and what is forbidden, on labels.”

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