Prop 65 Warning Requirements for Cannabis, THC and CBD

By Andrea A. Golan

Apr 13, 2020

About Proposition 65

In 1986, California voters approved Proposition 65 (Prop 65), an initiative that enacted the Safe Drinking Water and Toxic Enforcement Act of 1986. A key provision of Prop 65 is that it mandates the Governor to publish a list of chemicals known to the state to cause cancer or reproductive toxicity. This list is "to be revised and republished in light of additional knowledge at least once per year" and is commonly referred to as the "Proposition 65 list."

Products That Contain Δ9 THC or Expose Users to Cannabis Smoke Will Require Proposition 65 Warnings

On January 3, 2020, California’s Office of Environmental Health Hazard Assessment (OEHHA) added delta-9 tetrahydrocannabinol (Δ9 THC) and marijuana (cannabis) smoke to the Prop 65 list of chemicals known as reproductive toxins. Note: Cannabis smoke has been listed as a Prop 65 carcinogen since 2009. This means businesses subject to Prop 65 that manufacture, distribute, or sell any cannabis product, including hemp-derived CBD products that contain trace amounts of Δ9 THC, must provide a “clear and reasonable” warning notifying California consumers that the products contain chemicals known to the State of California to cause cancer or reproductive harm. This new listing requires businesses to amend their cannabis smoke warnings to address both cancer and reproductive toxicity. Of note, the Prop 65 listing does not include a safe harbor level for Δ9 THC, meaning products with any detectable level of THC—including most hemp-derived CBD products—will require Prop 65 warning labels.

Products on the Shelf Must Have Required Warnings on January 3, 2021

Businesses have until January 3, 2021 to comply with this new requirement, but there is an important caveat to this grace period: if your product enters the stream of commerce before January 3, 2021 without the required warning, and is placed on the retail shelf on or after January 3, 2021, your business is at risk of facing a Prop 65 enforcement action. These lawsuits can be brought by private litigants or by government agencies and fines can be up to $2,500 per day per violation. Practically speaking, Prop 65 violations are typically enforced by private litigants, many of whom actively search for violations immediately after the grace period of a newly listed chemical expires. Consequently, Prop 65 warnings should be added to products before the January 3, 2021 effective date. If products do end up on store shelves without the required warnings, you should work with retailers to put warnings in place.

Businesses with Less Than 10 Employees are Not Necessarily Off the Hook

Prop 65 applies to businesses with 10 or more employees, and that includes all businesses in the product supply chain, including out-of-state companies that sell products in California. The manufacturer, producer, packager, importer, supplier or distributor bear primary responsibility for providing the Prop 65 warning. By contrast, applicable regulations place retail sellers in a separate category and impose responsibility for providing the warning only under specific circumstances.

In practical terms, your business may not be off the hook even if it has less than 10 employees. Plaintiffs can bring suit against anyone in the supply chain, and thus circumvent the 10-employee rule, by naming additional parties to the suit. Also, most retailers have strong indemnification provisions in their supply contracts which serve to put the warning requirement back on the supplier.

Breaking Down the Warning Requirements for Cannabis Products

A business that provides a “clear and reasonable” warning prior to exposure to the listed chemical is afforded “safe harbor” protection from alleged Prop 65 violations and enforcement. A warning is “clear and reasonable” when it is prominently displayed in such a manner that it can be seen, read, and understood by the consumer prior to exposure. The regulations provide specific warning content and methods for providing the warning that are considered “clear and reasonable.” A business may use any other warning method or content that is “clear and reasonable,” but to be afforded “safe harbor” the warnings must incorporate the statute’s specified content and warning methods.

A Prop 65 warning can be placed on the immediate container that holds the product or on the outer packaging, provided it can be seen, read, and understood by the consumer prior to exposure. That warning can be either a short-form warning or the standard long-form warning. The abbreviated short-form warning was intended for products where space is limited, but OEHHA does not prohibit its use on larger packaging. OEHHA has indicated it may amend its regulations to prevent the use of the short-form warning where unnecessary, but for now, a business may use either the standard long-form or short-form warning on a product label.

Prop 65 Internet Warnings

A product sold online to a California consumer must also include the Prop 65 warning language. The internet warning is in addition to the warning on or with the product. The regulations require including the warning itself or a clearly marked hyperlink using the word “WARNING” on the product display page, or otherwise prominently displaying the warning to the purchaser before completing the online purchase. Businesses may use the short-form language or a photograph of the warning on a product label.

Prop 65 is complex and makes it difficult for cannabis businesses to successfully navigate regulatory compliance. If not complied with, this could open your business to exposure. Helping the cannabis industry maintain compliant operations is a cornerstone of Vicente Sederberg’s services. Please contact us if you need assistance.

This article is for informational purposes only and not for the purpose of providing legal or tax advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. This material may be considered attorney advertising under certain rules of professional conduct.