Does Prop 65 Affect Your Business?

INTRODUCTION- PROP 65 PROBABLY IMPACTS YOUR BUSINESS

Formally named the “Safe Drinking Water and Toxic Enforcement Act of 1986”, Prop 65 requires businesses to provide warnings to Californians about significant exposures to chemicals that cause cancer, birth defects, or other reproductive harm. Failure to comply can subject a business to severe fines and civil judgments.

Since its enactment over 30 years ago, Prop 65’s list of harmful chemicals has grown to over 900. Among the chemicals included on the list (referred to in this article as “carcinogens”) are 3 that are present in nearly every cannabis product available on the California market: tetrahydrocannbinol (THC), cannabis/ marijuana smoke, and beta-myrcene (β-myrcene).

If you manufacture products that will be sold to Californians or market products to Californians containing THC, CBD, β-myrcene, and/or that produce cannabis[1] or hemp smoke, then Prop 65 applies to you. In fact, for the reasons I will discuss in this article, Prop 65 also affects all hemp and cannabidiol (CBD) products in California.

WHAT DOES PROP 65 REQUIRE?

Prop 65 does not prohibit the sale of products that contain carcinogens. Rather, companies are obligated to provide “clear and reasonable” warnings if they choose to sell these products in California. The warnings are slightly different, depending on whether the Carcinogen is known to cause cancer or reproductive problems (or both), and whether the warning is the full or short version. For purposes of illustration, here is the full warning:

WARNING: Consuming this product can expose you to chemicals including [name of one or more chemicals], which is [are] known to the State of California to cause cancer and birth defects or other reproductive harm. For more information go to www.P65Warnings.ca.gov/food.

PROP 65 ENFORCEMENT

A fairly unique feature of Prop 65 is that it can be enforced in lawsuits filed by either government officials or private citizens. In effect, regulation of Prop 65 is given over to private citizens when the government decides not to take action. A company can be subject to monetary sanctions of up to $2500 per day plus attorney fees, which can exceed the amount of the fine. For these reasons, Prop 65 is a well-stocked pond for motivated plaintiffs’ lawyers, who can troll the market for violators using the Harmful Chemicals List as a pole. It is not my intent to address Prop 65 procedural issues in this article. If your business is subject to a Prop 65 claim you should immediately discuss it with a lawyer. Instead, I’m going to focus on how it impacts the cannabis industry, including marijuana, hemp, THC, and CBD products.

PROP 65 IMPLICATES CANNABIS, HEMP, AND CBD

This may come as a surprise, but Prop 65 has implicated many (most) cannabis and hemp/CBD products for several years. This is because β-myrcene, the most abundant terpene in cannabis (it makes up 50% or more of the terpene concentrations in most strains of marijuana and hemp), has been listed as a cancer-causing carcinogen on the Prop 65 list since March 2015. Its time spent on the list has run concurrently with the rise of the hemp and CBD health industry. How many hemp/CBD products sold in California do you see bearing the official warning notice for β-myrcene? How many adult-use cannabis products carry the Prop 65 warning?

Last week, two more cannabis chemicals were added to the list. The California Developmental and Reproductive Toxicant Identification Committee (DRTIC), a committee that evaluates chemicals to determine whether to include them as carcinogens on the Prop 65 list, met on December 11. It reviewed a number of studies on “cannabis (marijuana) smoke” and “THC” (notably, all of the THC studies were only of marijuana smoke) as summarized in a report by the comprehensively named California Office of Environmental Health Hazard Assessment’s (OEHHA) Reproductive and Cancer Hazard Assessment Branch. At the meeting, the DRTIC voted 8-1 to include both “THC” and “cannabis (marijuana) smoke” on the list. “Marijuana smoke” is already on the list for cancer; it made the list this time for reproductive harm.

The DRTIC was persuaded of the carcinogenic effect of THC and cannabis (marijuana) smoke on reproduction by an October 2019 report entitled, “Evidence on the Developmental Toxicity of Cannabis (Marijuana) Smoke and ∆-9 THC” (Report). The Report is 441 pages. It summarizes a number of broad-ranging studies conducted during the past several decades. A blow by blow takedown of the studies, from the use of faulty methods, to the conflation of smoked cannabis with THC, to the fact that most studies were inconclusive, is well beyond the scope of this article. If you have an interest in cannabis policy, I encourage you to review it. I think you’ll find that most of the studies on which the DRTIC relied do not support its finding.

Between β-myrcene, THC, and cannabis (marijuana) smoke, it is difficult to imagine a cannabis or hemp product for which a warning label is not required. In fact, Prop 65 will affect all CBD businesses that operate in and/or whose products are sold into California. This is because the DRTIC has not established a “safe harbor” amount of THC that it deems to be non-toxic. All hemp and CBD products contain THC, including products formulated with CBD isolate, which contains trace amounts. Since the DRTIC contends that any exposure to THC can cause reproductive harm, its warning applies to products that contain it, even if only in trace amounts.

What Next?

Products containing THC and cannabis (marijuana) smoke are subject to a 1-year grace period. During that year, businesses should assess whether their products require a warning. The OEHHA may implement a “safe harbor” provision that would exempt products from bearing the warning under certain circumstances, such as when they contain THC levels within a predetermined limit that is considered safe. Without a safe harbor provision, individual businesses will be forced to make their own determinations as to whether a safe harbor limit applies to their products and, if so, what it is. In the meantime, products containing β-myrcene are currently subject to Prop 65 and must bear the warning. Failure to do so could place your company in legal jeopardy.

If you have any questions regarding Prop 65 contact the cannabis attorneys at Kight Law Office by clicking here.

[1] In this article, and depending on the context, I use the term “cannabis” in a general botanical sense to include both hemp and marijuana and also in a specific legal sense to refer to forms of cannabis with delta-9 THC levels in excess of 0.3%, (ie, marijuana), since “cannabis” is the legal term of art used in the California code to refer to what is federally known as marijuana.

December 16, 2019

Rod Kight is an attorney who represents lawful cannabis businesses. He speaks at cannabis conferences across the country, drafts and presents cannabis legislation to foreign governments, is regularly quoted on cannabis matters in the media, and maintains the Kight on Cannabis legal blog, where he discusses legal issues affecting the cannabis industry. You can contact him here.