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PROP 65 – CALIFORNIA’S ADDITION OF THC AND THE UNREFINED NATURE OF DISPENSARY BUSINESSES

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In 1986, California enacted the Safe Drinking Water and Toxic Enforcement Act of 1986, more commonly known as Proposition 65, with the intent of better assisting consumers identify products that could have harmful affects on their body. The goal of Prop 65 is to isolate products which have chemicals and ingredients known to cause cancer or birth defects or other reproductive harm and t provide warnings to consumers of these effects.

Prop 65 has come a long way since its enactment in November of 1986 from just a few chemicals to now over 800 chemicals, many of which are found in most common consumer goods such as coffee and plastics. The statute holds not just the manufacturer of the product liable, but the supplier, distributor, and retailer of these products liable too, creating a decades-long wave of lawsuits against businesses operating in California regardless of whether any actual consumer was harmed using it. The statute calls for penalties up to $2,500 per day for each violation.

The Act requires that businesses (Manufacturers, suppliers, retailers . . .) provide a “clear and reasonable” warning before knowingly and intentionally exposing anyone to a listed chemical, unless the business can show that the anticipated exposure levels will not pose a significant risk of cancer or reproductive harm.

A “clear and reasonable” warning must include a statement that the product may result in an exposure to one or more listed chemicals, an accurate and specific description of the product and any necessary written warning materials.

This warning has evolved from its previous versions which required only notice that the product could be harmful. After a wave of civil litigation against California businesses by “exposed” consumers, it became common practice for many California businesses to include generic warnings in its facilities, or in the packaging of its product. So generic in fact, that it is well known that most Californians completely ignore the warning, or commonly state that everything causes cancer, forcing the State to implement the now stricter warning requirements.

However, because of the strict penalties held against companies, and a Plaintiff’s attorneys 25% fee collection when acting on behalf of the state, these suits are not going anywhere and will only increase as more and more chemicals are added to the Prop 65 list. To determine the amount of penalties, a trial court will consider (1) the nature and extent of the violation; (2) the number of, and severity of, the violations; (3) the economic effect of the penalty on the violator; (4) whether the violator took good faith measures to comply; (5) the willfulness of the violator’s misconduct; (6) the deterrent effect that the imposition of the penalty would have on both the violator and the regulated community as a whole; and (7) any other factor.

The trend is clear over time:

2013: 352 P65 Settlements for $17,409,756 total.

2014: 663 P65 Settlements for $29,482,280 total.

2015: 583 P65 Settlements for $26,266,261 total.

2016: 760 P65 Settlements for $30,150,111 total.

2017: 688 P65 Settlements for $25,767,500 total.

2018: 829 P65 Settlements for $35,169,924 total.

Of these amounts, 76% is reported to be spent on attorney’s fees for Plaintiff’s counsel, with the large majority of Cases handled by just a handful of opportunistic Plaintiff’s firms.

California regulators listed Delta-9-tetrahydrocannabinol, more commonly known as THC, as a Prop 65 chemical known to cause reproductive toxicity, with all notice requirements in effect January 3, 2021. Additionally, THC is not the only cannabis-related product that has been added to the list: cannabis smoke was also listed as a reproductive toxicant and has been listed as a carcinogen for over a decade. Due to this slight change, all cannabis-related smoking products will need to include the notification requirements as a carcinogen AND now as a reproductive toxin.

As of December 2019, California has seen 1,440 marijuana dispensaries open within its state and the number has drastically increased since then. California has provided to its marijuana shops a strong level of protection, even deeming them an essential business as it relates to the COVID-19 pandemic. Despite this, the continued research and attack on THC=based products continues from both the state and federal level; many of these issues resulting in the informal process by which these business owners operate, and the lack of legal knowledge in the proper notice and ID requirements in these stores. The latest addition of THC to Prop 65 will allow the State government, as well as hungry Plaintiff’s attorney to continue their attack on these types of shops if their exists a failure to properly notice these ingredients in their products. The Maximum Allowable Dose level for these products is if any product contains more than .3% THC, even if the test is an anomaly and not repeatable.

If you operate a business that uses as an ingredient, in any of its products, a chemical on Prop 65’s banned chemicals list, or simply don’t know if your product contains any chemicals on this list; you must contact an attorney knowledgeable in the field of toxic torts and prop 65 to determine if you business has fallen into the exceptions to Prop 65’s strict warning requirements, and to accurately determine if the levels of exposure caused by your product create an obligation to warn at all.