Marijuana Business Magazine - April 2018

Also, keep it simple and straightforward. “In the first communication with media, we would recommend keeping comments broad and direct, avoiding language that feels defensive,”Gordon said. For example, in most cases the execu- tive should avoid blaming overly zealous regulators for the recall. Public Versus Private Companies It is especially important to work with legal counsel if the company is publicly traded, Vasquez said “There needs to be strict adherence to compliance, and the company has a responsibility not only to the public that may be consuming their product, but also the added layer of shareholders and regulators,”Vasquez said. That said, the company’s ownership structure shouldn’t matter when respond- ing to a recall, Freese said. Regardless of whether the company is public or private, the most important thing is protecting the safety of consumers first, she said. “Second is minimizing liability to the company. There’s plenty of attorneys who scour the news looking for class-action suits,” she said – a situation that can lead to costly legal bills. A public company does have greater investor/shareholder considerations than a private company, she noted, adding that she has never seen a private company ignore a public liability. Unique Features of Marijuana Recalls It’s important to know why recalls in the marijuana industry differ from those in more mainstream industries. It will help you craft a plan. For starters, marijuana companies – and the industry in general – have more at stake. “Executives in more mature industries don’t need to be legitimized or to prove their product or service,”Vasquez said. Even Wall Street investment bank- ers who have entered the cannabis field need to be counseled on how to navigate responding to a recall, she said. “There are so many restrictions even in the way one tweets in this industry,”Vasquez noted. For example, social media messages about marijuana could be viewed as advertis- ing – something certain social media platforms frown upon. Dealing with a marijuana product recall is more challenging than recalls in other industries, Freese said. “Cannabis companies have the added burden of the naysayers and prohibition- ists immediately jumping out to disrupt, cause doubt and spread misinformation. You don’t see that in other industries that have recalls,” she noted. “We are still fight- ing a stigma and federal classification of Schedule 1 drug.That is not a considera- tion with non-cannabis clients.” ◆ RECALLING RECENT RECALLS T he North American marijuana industry is littered with recent product recalls: • In January, Denver-based Bronnor Corp. voluntarily recalled cannabis vaporizer pens over concerns about possible ethanol contamination. • Last November, Colorado cannabis regulators recalled 50 varieties of medical marijuana, edibles and concen- trates from a Colorado Springs-based company, Tree of Wellness, after the Colorado Department of Agriculture discovered a banned pesticide. • Last July, a Denver marijuana business, Buddies Well- ness, voluntarily recalled MMJ found with powdery mil- dew and mite contamination. The contaminants were found during a Denver Department of Public Health and Environment investigation. • In early 2017, a Mesa, Arizona, dispensary, Flourish Can- nabis, voluntarily recalledmarijuana-infused pasta sauce, hot sauce, honey Dijonmustard and Sriracha because of a packaging issue. Health officials in Coconino County, however, said the recall occurred because the products weren’t tested for pathogens. • In 2015, Health Canada recalled medical marijuana in Ontario fromPeace Natural Project because the level of THC was higher than listed. A third-party test showed it could be as high as 13.7%, while the label claimed it was 9.07%. Recalls can even have reverberations in the corner office. In March 2017, Organigram – a major Canadian MMJ cultiva- tor – changed CEOs two days after announcing it could not find the source of the pesticide contamination that forced the company to recall tainted cannabis and revamp its oper- ating procedures. Of course, you will never know exactly when and why a product will be recalled. But you can’t let that stop you from having a plan in place. “The entire reason a recall plan is needed is there is no time to stop and consider the best course of action,” said Karen Freese, principal of Freese Branding + Consultancy in San Francisco. “It’s a reaction to how the business will be impacted or where the product is in the supply chain or what attorney should be called. You have to act immediately.” – John Rebchook 66 • Marijuana Business Magazine • April 2018