Business
Why are Canadian cannabis products recalled for incorrect labels?
Since the Canadian government legalized adult-use cannabis in late 2018, cannabis product recalls have been issued 42 times.
Some of those recalls have addressed serious product defects, like potential contamination or leaky packaging.
However, most cannabis product recalls involved a far more mundane issue: 29 of them – or 69% – have involved labeling problems, according to Health Canada’s recall database.
Four-and-a-half years after Canadian adult-use sales started, the persistence of cannabis recalls for incorrect labeling raises a question for the regulated industry: Why does this keep happening?
Recalls, even for minor issues, can damage the reputations of cannabis companies and the regulated industry as a whole.
At a time when the accuracy of cannabis label claims is already under scrutiny amid reports of inflated THC claims, recalls for erroneous labels may matter more than ever.
Sherry Boodram, CEO and co-founder of Toronto-based CannDelta Consulting and a former senior inspector for Health Canada, told MJBizDaily that Canada’s “over-regulated” cannabis industry is trying to survive “a challenging economic period.”
“That includes reducing staff to streamline their business while still having to complete a large amount of paperwork that’s required to fulfill their regulatory obligations,” Boodram said.
“Despite companies having a robust quality-assurance program, which they are required to have, to avoid or limit potential manufacturing errors, at the end of the day the quality assurance and control teams are overworked, which can unfortunately cause human errors.”
Human error
The most recent recall, pre-roll multipacks from Ontario cultivator Medz Cannabis, is a straightforward example of Canadian cannabis recalls for labeling issues: The THC and CBD levels printed on the packaging were lower than the actual values in the product.
Neither Medz nor Health Canada received any complaints or adverse-reaction reports about the recalled products.
Other labeling errors that have led to cannabis recalls include:
- Not printing a mandatory warning message.
- A typo in which one one cannabinoid was incorrectly listed as another.
- Unlabeled product containers inside properly labeled exterior packaging.
- An incorrect description of a product’s intended use.
In Boodram’s experience, human error is the most common cause behind cannabis label errors.
“Mistakes can happen really at any point during the labeling process,” she said.
“It could occur during data entry, through proofreading, or even at the printing stage,” Boodram continued.
“The cannabis regulations outline very specific and nuanced packaging and labeling requirements, which means that a significant amount of oversight and review – and also checkpoints – (are) needed to ensure that the labels are compliant.”
Quality assurance expert Anuraga Mandava, chief consultant with Calgary-based Qualium Consulting, said potential errors that could lead to mislabeled cannabis include mistakes with decimal points or percentage signs, or wrongly applying information from one batch of cannabis to a different batch.
The process moves “at a fast pace; you have to get through multiple steps,” Mandava said.
“One person is wearing multiple hats – just because the cannabis industry is running on pennies right now – so there is a lot of rush to get the product out through the door,” she added.
“It’s a human thing. Mistakes happen.”
What’s at stake
Many labeling-related cannabis recalls don’t involve any adverse reaction reports, suggesting that mislabeling hasn’t posed a widespread public health issue.
In some cannabis recalls, the amount of THC listed on the label is higher than the actual amount, and weaker-than-expected cannabis is unlikely to pose a health risk to recreational consumers.
“But from the producer’s perspective, we know that the cannabis industry is still being heavily scrutinized by the public,” cannabis consultant Boodram said.
“That creates a larger negative public perception of the industry as a whole — in addition to the negative perception and mistrust, probably, of the producer themselves,” she continued.
Labeling recalls can also hurt the producer’s business-to-business relationships, especially if they’re recurring, Boodram noted.
“It shows that there could be a lack of quality control or reliability in their process, which could impact their overall relationship and even relationships with provincial (cannabis wholesale) boards and their vendors,” she said.
Qualium Consulting’s Mandava noted: “Everything runs on brand image and reputation, especially in the cannabis industry.”
Recalls, even for something as simple as a missing percentage sign or decimal point on a label, “give a bad impression that, ‘These guys don’t have everything buttoned up.’”
Best practices
CannDelta’s Boodram advises cannabis companies to “regularly review their internal processes, including their labeling process, to make sure that there are enough checkpoints in place” to prevent labeling errors from happening.
“That includes assessing if they have the right team in place to (operate) those checkpoints, that are qualified and experienced enough to be able to detect deficiencies or errors.”
Having enough workers can also help prevent human error related to stress and burnout, Boodram added.
“Sometimes you need a second set of eyes, especially with the labels. There’s so much information and nuance in that label that you need to check for,” Boodram added.
“You really can’t have one person checking it, you need to have multiple people to make sure that the first person didn’t miss something.”
Boodram said staff training on standard operating procedures also plays an important role.
Quality assurance expert Mandava said enterprise resource planning (ERP) software can help automate the labeling process.
However, she noted that ERP software can be expensive.
Like Boodram, Mandava recommended appropriate standard operating procedures backed up by checklists and redundancies.
“You have one person adding the information, and another person reviewing it, and another person confirming it,” she said.
Source: https://mjbizdaily.com/why-canadian-cannabis-products-are-recalled-for-incorrect-labels/
New Mexico regulators fined a cannabis operator nearly $300,000 and revoked its license after the company allegedly created fake reports in the state’s traceability software.
The New Mexico Cannabis Control Division (CCD) accused marijuana manufacturer and retailer Golden Roots of 11 violations, according to Albuquerque Business First.
Golden Roots operates the The Cannabis Revolution Dispensary.
The majority of the violations are related to the Albuquerque company’s improper use of BioTrack, which has been New Mexico’s track-and-trace vendor since 2015.
The CCD alleges Golden Roots reported marijuana production only two months after it had received its vertically integrated license, according to Albuquerque Business First.
Because cannabis takes longer than two months to be cultivated, the CCD was suspicious of the report.
After inspecting the company’s premises, the CCD alleged Golden Roots reported cultivation, transportation and sales in BioTrack but wasn’t able to provide officers who inspected the site evidence that the operator was cultivating cannabis.
In April, the CCD revoked Golden Roots’ license and issued a $10,000 fine, according to the news outlet.
The company requested a hearing, which the regulator scheduled for Sept. 1.
At the hearing, the CCD testified that the company’s dried-cannabis weights in BioTrack were suspicious because they didn’t seem to accurately reflect how much weight marijuana loses as it dries.
Company employees also poorly accounted for why they were making adjustments in the system of up to 24 pounds of cannabis, making comments such as “bad” or “mistake” in the software, Albuquerque Business First reported.
Golden Roots was fined $298,972.05 – the amount regulators allege the company made selling products that weren’t properly accounted for in BioTrack.
The CCD has been cracking down on cannabis operators accused of selling products procured from out-of-state or not grown legally:
- Regulators alleged in August that Albuquerque dispensary Sawmill Sweet Leaf sold out-of-state products and didn’t have a license for extraction.
- Paradise Exotics Distro lost its license in July after regulators alleged the company sold products made in California.
Golden Roots was the first alleged rulebreaker in New Mexico to be asked to pay a large fine.
Source: https://mjbizdaily.com/new-mexico-cannabis-operator-fined-loses-license-for-alleged-biotrack-fraud/
Four marijuana companies, including a multistate operator, have filed a lawsuit against U.S. Attorney General Merrick Garland in which they allege the federal MJ prohibition under the Controlled Substances Act is no longer constitutional.
According to the complaint, filed Thursday in U.S. District Court in Massachusetts, retailer Canna Provisions, Treevit delivery service CEO Gyasi Sellers, cultivator Wiseacre Farm and MSO Verano Holdings Corp. are all harmed by “the federal government’s unconstitutional ban on cultivating, manufacturing, distributing, or possessing intrastate marijuana.”
Verano is headquartered in Chicago but has operations in Massachusetts; the other three operators are based in Massachusetts.
The lawsuit seeks a ruling that the “Controlled Substances Act is unconstitutional as applied to the intrastate cultivation, manufacture, possession, and distribution of marijuana pursuant to state law.”
The companies want the case to go before the U.S. Supreme Court.
They hired prominent law firm Boies Schiller Flexner to represent them.
The New York-based firm’s principal is David Boies, whose former clients include Microsoft, former presidential candidate Al Gore and Elizabeth Holmes’ disgraced startup Theranos.
Similar challenges to the federal Controlled Substances Act (CSA) have failed.
One such challenge led to a landmark Supreme Court decision in 2005.
In Gonzalez vs. Raich, the highest court in the United States ruled in a 6-3 decision that the commerce clause of the U.S. Constitution gave Congress the power to outlaw marijuana federally, even though state laws allow the cultivation and sale of cannabis.
In the 18 years since that ruling, 23 states and the District of Columbia have legalized adult-use marijuana and the federal government has allowed a multibillion-dollar cannabis industry to thrive.
Since both Congress and the U.S. Department of Justice, currently headed by Garland, have declined to intervene in state-licensed marijuana markets, the key facts that led to the Supreme Court’s 2005 ruling “no longer apply,” Boies said in a statement Thursday.
“The Supreme Court has since made clear that the federal government lacks the authority to regulate purely intrastate commerce,” Boies said.
“Moreover, the facts on which those precedents are based are no longer true.”
Verano President Darren Weiss said in a statement the company is “prepared to bring this case all the way to the Supreme Court in order to align federal law with how Congress has acted for years.”
While the Biden administration’s push to reschedule marijuana would help solve marijuana operators’ federal tax woes, neither rescheduling nor modest Congressional reforms such as the SAFER Banking Act “solve the fundamental issue,” Weiss added.
“The application of the CSA to lawful state-run cannabis business is an unconstitutional overreach on state sovereignty that has led to decades of harm, failed businesses, lost jobs, and unsafe working conditions.”
Alabama regulators are targeting Dec. 1 to award the first batch of medical cannabis business licenses after the agency’s first two attempts were scrapped because of scoring errors and litigation.
The first licenses will be awarded to individual cultivators, delivery providers, processors, dispensaries and state testing labs, according to the Alabama Medical Cannabis Commission (AMCC).
Then, on Dec. 12, the AMCC will award licenses for vertically integrated operations, a designation set primarily for multistate operators.
Licenses are expected to be handed out 28 days after they have been awarded, so MMJ production could begin in early January, according to the Alabama Daily News.
That means MMJ products could be available for patients around early March, an AMCC spokesperson told the media outlet.
Regulators initially awarded 21 business licenses in June, only to void them after applicants alleged inconsistencies with how the applications were scored.
Then, in August, the state awarded 24 different licenses – 19 went to June recipients – only to reverse themselves again and scratch those licenses after spurned applicants filed lawsuits.
A state judge dismissed a lawsuit filed by Chicago-based MSO Verano Holdings Corp., but another lawsuit is pending.
Source: https://mjbizdaily.com/alabama-plans-to-award-medical-cannabis-licenses-dec-1/
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