By John Schroyer, Omar Sacirbey and Bart Schaneman
Tainted medical cannabis is suspected in a California cancer patient’s death, Colorado creates a workplace-safety guide, and Ohio is in the market for a seed-to-sale tracking system.
Here’s a closer look at some notable developments in the marijuana industry over the past week.
More liability lawsuits?
The potential for costly lawsuits over defective – and possibly dangerous – products remains an overlooked legal aspect for businesses in the growing cannabis industry.
That threat materialized this week when a California cancer patient’s death was tied to fungus-contaminated medical marijuana and 90-plus MMJ patients in Canada contacted lawyers about a potential class-action suit over pesticide-tainted products.
“I would be shocked if (the California death) didn’t trigger some kind of lawsuit,” said Sean McAllister, a Colorado cannabis industry attorney.
McAllister has experience representing marijuana-related businesses in legal liability, including a high-profile Colorado case. His client, edibles maker Gaia’s Garden, is involved in a civil lawsuit filed by the family of a man who killed his wife and cast the blame on a 10-milligram Gaia’s edible he had ingested.
“(Cannabis businesses) need to be taking measures to make sure their products aren’t contaminated, so people don’t get harmed,” McAllister said. “If they don’t do that, you’re going to spend hundreds of thousands of dollars on lawyers to defend a product liability case all the way to trial.”
More significant, he said, any member of the supply chain of a defective MMJ product could be open to lawsuits.
“It’s not only the manufacturer or the cultivator or the edible product,” McAllister said of potential liability. “It’s also the retailer, and it could be the wholesaler.”
There’s been no clear indication if medical marijuana was directly responsible for the fungal infection that led to the Californian’s death, but a class-action lawsuit could be filed in Canada. And if MMJ producers don’t stress product safety and quality assurance, more legal action could be on the horizon.
Safety made easy
Marijuana businesses looking to improve employee safety and regulatory compliance will no longer have to search for the rules they must follow, thanks to a new guide that one author said offers all those requirements in one document.
“Employers were having a hard time tracking all the regulations they had to follow because they were spread out among different agencies. Now they don’t have to look in all these different places because it’s all in one document.”
While the report was issued for Colorado businesses, it draws from federal and state rules and identifies hazards that marijuana business owners face no matter which state they’re in. “This can be used coast to coast,” Donahue said.
Cultivation sites and extraction facilities face the most hazards because of the equipment, materials and work involved, Donahue said.
The cost of implementing the recommended safety measures varies by facility size, but Donahue believes investments of four digits would be sufficient in most cases.
Investments in safety are not only relatively inexpensive, Donahue said, they can save a business tens of thousands of dollars in fines, as well as such injury-related costs as worker compensation, increased employee insurance premiums and even lawsuits that could stem from on-the-job accidents.
Seedling industry progressing
Ohio’s new medical marijuana industry – signed into law last June – is rolling out at less than a gallop.
But entrepreneurs eager to capitalize on this potentially sizable market can take heart that incremental progress is being made.
This week, for example, the state announced it’s seeking a company to implement its seed-to-sale tracking system. For prospective growers and dispensary operators, such news couldn’t come soon enough.
“From a business perspective, I see these teams of investors, whether they’re looking at dispensaries or cultivation, plowing ahead here,” said Brian Wright, executive director of the Ohio Cannabis Association. “These guys have been working pretty aggressively ever since (legalization of MMJ) was announced.”
Wright added that it’s clear aspiring license owners have the national partners they need to show they’re experienced and ready to grow, as well as local associates with boots on the ground in Ohio.
These wannabe business owners also are finalizing their company teams and are waiting for the state to issue guidelines governing the application process. That guidance for cultivators is expected to be released in May, and processing, testing labs and dispensaries should receive their rules in September.
While Ohio’s market might not be developing as quickly as neighboring Pennsylvania’s, Wright pointed out business owners can use that to their advantage and get their ducks in a row. Prospective MMJ patients are there and eager to get the product “as soon as we can get all these pieces in place,” he added.
John Schroyer can be reached at [email protected]
Omar Sacirbey can be reached at [email protected]
Bart Schaneman can be reached at [email protected]