Proposition 65 Warnings: What Cannabis Operators Need to Know
WARNING! New Proposition 65 Notice Requirements Coming Soon!
June 14, 2018
With the end of the transition period soon approaching, many licensed cannabis businesses in California are taking a fresh look at their labeling and packaging practices to ensure compliance with the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) and the Readopted Emergency Regulations. Businesses would also be wise to consider Proposition 65, which requires the State of California to maintain and update a list of chemicals that can cause cancer, birth defects, or other reproductive harm, given that “Marijuana smoke” and some common terpenes, including myrcene and isoprene, are on the list.
Cannabis businesses that expose individuals to listed chemicals through their products or operations generally must provide Proposition 65 warnings. Violations can result in steep financial penalties . For example, in May 2018, a licensed medical cannabis dispensary in Santa Rosa agreed to pay $40,000 in fines and civil penalties as part of a Proposition 65 settlement. (The operator mistakenly believed the consumer warnings posted on-site complied with state law.)
On August 30, 2018, new regulations pertaining to Proposition 65 warnings go into effect. The major differences between the current and the new warning regulations are: (1) that the current regulations do not require that the specific listed chemical be identified, whereas the new regulations do, at least for the long-form version of the warning; (2) a change in the appearance of the warning sign, which will now require a yellow (or black-and-white) triangle with an exclamation point; and (3) a clear preference for placing the burden to warn on manufacturers and packagers rather than retail sellers where possible, while also providing a mechanism to allocate legal responsibility for providing such warnings.
Therefore, as cannabis businesses re-examine their labeling and packaging practices, they should keep in mind the new Proposition 65 requirements discussed here.
OVERVIEW OF PROPOSITION 65
California’s Proposition 65, a voter initiative passed in 1986, created the Safe Drinking Water and Toxic Enforcement Act (Health & Safety Code § 25249.5 et seq.), which requires that the seller of a product that contains chemical(s) known by the State of California to cause cancer or reproductive harm must provide a warning to anyone who buys the product, unless there is already a clear and sufficient warning printed on the label or package. Warnings must also be given if there is a possibility of environmental exposure to a chemical on the list of substances that cause cancer or reproductive harm. Penalties for violating Proposition 65’s warning requirement can be as high as $2,500 per day.
The Proposition 65 list can be found at https://oehha.ca.gov/proposition-65/proposition-65-list.
Proposition 65 is enforced by the California Attorney General’s office as well as local district attorneys; however, the law also gives a private right of action to individuals acting in the public interest, who may file a lawsuit alleging that a business is in violation of the law. Many private attorneys are involved in filing these notices, and the attorney fees awarded are usually significant.
The warning required under Proposition 65 must be “reasonably calculated” to be available to an individual prior to exposure, and must clearly communicate that the chemical in question is known to cause cancer or reproductive harm. “Exposure” in this context is defined as: “to cause to ingest, inhale, contact via body surfaces or otherwise come into contact with a listed chemical,” and can occur through use of consumer products as well as through the environment.
For products, the warning must be “prominently placed upon a product’s label or other labeling or displayed at the retail outlet with such conspicuousness, as compared with other words, statements, designs, or devices in the label, labeling or display as to render it likely to be read and understood by an ordinary individual under customary conditions of purchase or use.”
A system of signs, a public advertising system, or any other system that provides clear and reasonable warnings is also sufficient. This could include a warning printed on each customer receipt, or included as part of a membership agreement, if one exists, depending on the circumstances.
For environmental exposure, in addition to the warning methods mentioned above, warnings can also be provided by a mailed or delivered notice to each occupant of the affected area at least once every three months, or via public media announcements targeted to the affected area at least once every three months.
Currently, the consumer product warning for a carcinogen must include the following language:
“WARNING: This product contains a chemical known to the State of California to cause cancer.”
The current environmental exposure warning for a carcinogen must include the following language:
“WARNING: This area contains a chemical known to the State of California to cause cancer.”
The required warnings for chemicals known to cause reproductive harm are identical, except the word “cancer” is replaced with “birth defects or other reproductive harm.”
NEW RULES WILL TAKE EFFECT SOON
California’s Office of Environmental Health Hazard Assessment (OEHHA), the agency that oversees Proposition 65 enforcement, issued new warning regulations in late 2016 that will go into effect on August 30, 2018. The new regulations are designed to provide consumers with more specific notice of the chemicals contained in products sold within the state. Between now and August 30, 2018, businesses can choose to continue following the existing regulations or to begin following the new regulations immediately. (For a side-by-side comparison of the current and new reasonable warning regulations, go to https://oehha.ca.gov/media/downloads/crnr/side-sidearticle6.pdf.)
The new regulations place the burden to warn on manufacturers and distributors rather than on retailers, though there are instances when a warning by the retail seller is required. Additionally, as long as the consumer ultimately receives an adequate warning, an arrangement may be reached between a retail seller and a manufacturer, producer, packager, importer, supplier, or distributor to allocate legal responsibility for providing the warning.
Warnings under the new regulations must be provided via signs and/or product labeling as applicable. For warning signs in retail establishments, the new regulations still require the warnings to be prominently displayed with conspicuous signage, so as to render them likely to be read and understood by an ordinary customer. Regarding additions to the warning, the warning may contain supplemental information “only to the extent that it identifies the source of the exposure or provides information on how to avoid or reduce exposure to the identified chemical or chemicals,” and any such supplemental information is not a substitute for the required warning.
The new exposure warning messages must include the following:
(1) A symbol consisting of a black exclamation point in a yellow equilateral triangle with a bold black outline. Where the sign, label or shelf tag for the product is not printed using the color yellow, the symbol may be printed in black and white. The symbol shall be placed to the left of the text of the warning, in a size no smaller than the height of the word “WARNING”.
(2) The word “WARNING” in all capital letters and bold print, and:
(A) For exposures to listed carcinogens, the words, “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. For more information go to www.P65Warnings.ca.gov.”
Alternatively, on-product warnings for products containing a known cancer-causing agent require the symbol required in §25603(a)(1), the word “WARNING” in bold capital letters, and the following words: “Cancer – www.P65Warnings.ca.gov.” The name of the listed chemical is not required to be printed on an on-product warning label.
The major differences between the current and the new “clear and reasonable” warning regulations are: (i) that the current regulations do not require that the specific listed chemical be identified, whereas the new regulations do, but only for the “long-form” version of the warning; (ii) a change in the appearance of the warning sign, which will now require a yellow (or black-and-white) triangle with an exclamation point; and (iii) a clear preference for placing the burden to warn on manufacturers and packagers rather than retail sellers where possible, while also providing a mechanism to allocate legal responsibility for providing such warnings.
EXCEPTIONS
Businesses that employ nine or fewer employees are exempt from the reasonable warning requirement. Notably, marijuana smoke, as well as the terpenes myrcene and isoprene, are included on the Prop. 65 list of cancer-causing substances. Thus, warnings may not be required for edible or topical marijuana products that do not contain myrcene or isoprene, provided they also do not contain another chemical on the Prop. 65 list, such as certain pesticides. A warning still may be required on some marijuana products that can be vaporized, since certain chemicals used in vapor products may be included on this list.
APPLICATION TO CANNABIS BUSINESSES
Marijuana smoke was added to the list of substances known by the State of California to cause cancer in 2009. The OEHHA has a web page stating that Marijuana Smoke is on the Proposition 65 list “because it can cause cancer.” (On the other hand, a 2013 review of medical literature by renowned pulmonologist Dr. Donald Tashkin of UCLA concluded that, “Although marijuana smoke contains a number of carcinogens and cocarcinogens, findings from a limited number of well-designed epidemiological studies do not suggest an increased risk for the development of either lung or upper airway cancer from light or moderate use, although evidence is mixed concerning possible carcinogenic risks of heavy, long-term use.”) This may open the door to revisiting the question of whether “Marijuana smoke” is properly classified as a carcinogen.
In 2014, beta-Myrcene, a terpene commonly found in many types of cannabis as well as in other plants, was added to the list of cancer-causing agents. Isoprene, another terpene, has been on the list since 1996. Although terpenoid testing is not required under State law, not doing so is not a defense against a claim that a particular terpene is present.
Recently, a number of medical cannabis dispensaries throughout the state have received 60-day notices of allegedly violating the clear and reasonable warning requirement. Therefore, cannabis operators should make sure that the proper warnings are in place, since some products (i.e., any cannabis intended for use by combustion or vaporization, as well as any cannabis goods containing myrcene, isoprene, or a pesticide on the Prop. 65 list) could be used in a way that, according to the State of California, might expose the user to a cancer-causing agent. Additionally, retailers that permit smoking or vaporizing on-site should provide a warning for environmental exposure. These warnings must be placed in a location where an average customer is likely to see them. Many pesticides are also on the Prop. 65 list and require a warning as well.
Under the new regulations, which go into effect on August 30, 2018, the burden placed on retailers will be minimized. Retailers of cannabis will not be responsible for providing the required warnings unless: (i) the retailer is responsible for introducing a listed chemical into a product; (ii) the retailer agrees to take on this responsibility; (iii) the retailer is selling the product under a brand or trademark that is owned or licensed by the retailer or an affiliated agency; (iv) the retailer obscured or did not conspicuously display warning labels or signage that were provided; or (v) the retailer has actual knowledge of potential consumer exposure that would require a warning, and there is no manufacturer, producer, packager, importer, supplier, or distributor of the product who is a “person in the course of doing business” and has designated an agent for service of process in California or has a place of business in California. However, retailers are responsible for the placement and maintenance of any warning materials he or she receives from suppliers.
Retailers are explicitly authorized to enter into arrangements with providers of cannabis goods to allocate legal responsibility for providing Prop. 65 warnings. The providers of the packaged products have the option of including the required warning directly on the product label or providing an accompanying written warning to the retailer along with the product. If the latter method is chosen, then the notice must be renewed every six months and the retailer is responsible for the placement and maintenance of the warning materials.
EXAMPLES OF WARNINGS THAT COMPLY WITH NEW REGULATIONS
Below are examples of warnings that comply with the new regulations, which go into effect on August 30, 2018:
WARNING: This product can expose you to marijuana smoke and myrcene, which are known to the State of California to cause cancer. For more information, go to www.P65Warnings.ca.gov.
WARNING: Entering this area can expose you to marijuana smoke. Marijuana smoke is known to the State of California to cause cancer. For more information, go to www.P65Warnings.ca.gov.
The warnings listed above are the full version of the warning, which is required for any signs, labels, and shelf tags that will be used to convey the required warning. As noted above, if an on-product warning is provided, then a short version of the warning may be used:
WARNING: Cancer and reproductive harm – www.P65Warnings.ca.gov.
High-resolution versions of the warning graphics are available for download here: https://www.p65warnings.ca.gov/warning-symbol
PUBLIC AND PRIVATE ENFORCEMENT
As noted, Proposition 65 can be enforced by both a public and private right of action, so individuals can serve businesses who they allege to be in violation of the Act with a 60-Day Notice of Violation and can then file a civil lawsuit against the alleged violator if an agreement to resolve the violation is not reached. A number of cannabis dispensaries have been targeted in this manner over the past years. Apparently, most if not all of these cases resulted in either a settlement or a consent judgment.
Moreover, marijuana smoke and myrcene are not the only substances included on the Prop. 65 list that a cannabis operator might encounter: pesticides such as myclobutanil and carbaryl are also on the Proposition 65 list. A number of cannabis businesses throughout California have received 60-Day Notices for products allegedly containing listed chemicals, such as marijuana smoke, myclobutanil and carbaryl.
Because marijuana smoke, myrcene, and other pesticides which may be found in cannabis products are currently listed as cancer-causing substances by the OEHHA, and because several dispensaries have been targeted over the years for not providing such warnings, it is suggested that operators of licensed California cannabis businesses provide the warnings called for under Proposition 65. Manufacturers, packagers and/or distributors of smokable cannabis products, such as pre-rolled joints, as well as producers of cannabis goods that contain myrcene, such as terpene-enhanced vape cartridges, ought to consider including Proposition 65 warnings on their labels or accompanying their products to the retailers they supply, or start making agreements with retailers as to who will take on the updated responsibilities highlighted by the new regulations.
The above information is provided as a public service. It is not intended as legal advice.
For answers to your legal questions or legal assistance, including Proposition 65 compliance, please contact the Law Offices of Omar Figueroa at (707) 829-0215 or info@omarfigueroa.com to schedule a confidential legal consultation.