Cannabis product recalls could cost your business hundreds of thousands of dollars if you aren’t careful. Here are five tips to help avoid this issue.
As the cannabis industry grows with regulations and standards, the rise in expensive cannabis product recalls is something every canna-business must take seriously.
It’s never fun to think about product recalls, but precise planning, rigorous standards, and swift action can prevent an incident from crippling your business.
Keep reading to learn how expensive product recalls can be. You’ll also learn five tips you can implement today to protect yourself and your business.
The cost of cannabis product recalls
Cannabis, like any other consumable product, is subject to product recall laws – even though it’s still federally illegal. When a business discovers one of its products is unsafe or potentially dangerous, it must immediately issue a voluntary recall. Those who don’t could receive substantial fines or face other legal troubles.
The maximum fine allowable under the law for a product recall in the U.S. is $100,000 for a single incident. In addition, penalties of up to $15 million for recurring violations are possible, along with five years imprisonment for criminal acts where the responsible party is found to have knowingly distributed tainted products.
Cannabis recall insurance is something businesses can and should have, but you shouldn’t rely on the insurance too heavily if a marijuana product recall becomes necessary.
How to avoid a cannabis product recall (five tips)
These five strategies can help you prevent a cannabis recall—or mitigate the damage a recall could have on your business.
1. Know your enemies
Since 2015, cannabis product recalls have taken place due to the following issues:
- Lead found in tinctures
- Rot or mold found in cannabis
- Illness or side effects reported from consuming the product
- Cannabis cultivated with banned pesticides
- Unsafe chemicals used during the growing process
Newer products, like cannabis beverages, have also received warnings or penalties for violating FDA regulations. Researching these incidents can help your new or established grow facility stay compliant and inspection-ready.
2. Maintain the highest standards
Product recalls bring more than just penalties or fines. Your reputation could be at stake if a product makes someone sick. Therefore, setting and maintaining the highest standards is essential.
Complex formulas, especially for edible cannabis products, are the primary culprit for recalls. You should test each ingredient individually and rigorously adhere to individual shelf life and stability standards.
3. Frequently test and monitor products during growth stages
You must send your cannabis products to an accredited third-party testing lab, but you can save your business time and money by testing them in-house first.
For example, the GemmaCert Essential can:
- Test for the purity and potency of cannabis and hemp products
- Monitor water levels to prevent mold
- Identify optimal harvest times to prevent rot
Constant in-house monitoring can boost your bottom line by improving profit predictability, too.
4. Set up an accessible complaint system
If an issue does arise, your vendors and customers should be able to get in touch with you quickly. Establishing an accessible pipeline to provide feedback on your products isn’t just an excellent way to enhance them—it also mitigates the risk of a widespread product recall.
Even a 24 hours difference could prevent a tainted product from being distributed to a broader audience, which could save you thousands of dollars.
5. Have a recall strategy in place
Mitigating the damage of a cannabis product recall starts (and ends) with swift, precise action.
Your cannabis product recall strategy should include:
- Specific standards and definitions that determine the scope of any recall
- The employee (or staff members) who will take the lead on a product recall
- Immediate procedures to determine where and how much product you distributed
- A swift plan to help you identify customers who purchased tainted products and how you will contact them (multiple forms of contact is best)
- How you’ll appropriately quarantine and dispose of contaminated products
- A process to determine the financial ramifications of any cannabis product recall, and you’ll execute this plan
Many states, especially those with an established cannabis industry, require extensive product recalls as part of their business plan. Some newer states, though, have vague requirements. A cannabis lawyer can help you build the right plan for your business and location
Learn more about how GemmaCert’s patented technology can incease safety and boost profitability for your business today.