Marijuana Business Magazine January 2020

Marijuana Business Magazine | January 2020 90 Keeping Your Customers After a Recall Recalls can be expensive for cannabis growers—especially if they cannot persuade their customers to keep buying. Contaminated cannabis plants and products pose a potential safety risk to customers and could jeopardize a company’s license, said Lezli Engelking, founder of The Foundation of Cannabis Unified Standards (FOCUS), a Scottsdale, Arizona-based nonprofit created to develop cannabis-specific standards. “The real concern in this industry right now is brand damage and losing consumer trust—and that goes to not just somebody who is buying flower from a particular cultivator but also their supply chain,” Engelking said. Cultivators conducting recalls are responsible for ensuring that the plants or products with problems are removed from the market and people are adequately compensated, she said. Growers who sell flower or products directly to retailers might ask for the dispensaries to refund customers who bought the product and keep a log so the cultivator can reimburse those expenses. “For a cultivator that’s solely selling wholesale for manufacturing purposes, they would definitely want to have a plan in advance. I would think there would be something in the supplier agreement between the cultivator and the manufacturer that says, in the event that there’s a problem with this product, this is what we’ll do.” Recalls are always costly. You can sometimes make up the lost revenue, but it’s very difficult to get back consumer trust and faith, said Rachna Saini, senior quality and regulatory consultant with Toronto-based Cannabis License Experts. “It’s always good to compensate your clients. That’s the least you can do when there is a recall,” Saini said. Compensation might look like covering the costs to clients—both the original purchase price and remediation expenses. But cultivators might also look at incentives to ensure future sales such as a percentage discount off their next order, she said. – Adrian D. Garcia Cooperation and honesty from the business experiencing a recall helps regulators quickly and efficiently handle the process. Identifying the right people for officials to speak to is also key, Davidson said. For instance, a grow manager, trimmer or the person on staff who oversees testing and sampling might have more relevant information for officials than a company’s executive team because of a hands-on relationship with the product. ELIMINATING THE PROBLEM Cultivators might need to get the approval of government officials before they resume full business operations. “Once all the notifications are done, then we need to decide what to do with the on-hold product,” Lavaux said. “Typically, there would be contaminated product that is on hold under our hold order at the cultivation site. And in the meantime, after the recall they may have received product back from dispensaries and from other businesses.” Cultivators could decide to destroy the product to release the hold order. They might also ask their supply chain and consumers to dispose of the product using the standard methods of removing cannabis merchandise from the market. In many states, this includes placing the product in a secured receptacle or area until the company or a waste hauler can take it to a manned landfill or transformation facility, a composting facility, a digestion facility, a transfer/processing facility and/or a fully permitted chip-and-grind operation. Companies might also try to remediate the product into marijuana concentrate, which would require more testing. “I’m totally of the viewpoint that any contamination should not enter any other process,” said Rachna Saini, senior quality and regulatory consultant with Toronto-based Cannabis License Experts. Saini suggests cultivators designate a secured quarantine area to place recalled products. Companies should keep plants or strains with issues separate from others in the facility. This might look like putting identified plants with issues, as well as those surrounding them, into the secured storage or a quarantine area. “If a cultivator sees a problem, especially if it’s an indoor grow, it’s probably going to be localized to one room. The best scenario would be to lock that room and try to avoid the spread of the problem,” Saini said. “Avoid cross-contamination. Designate staff to handle that contamination. They should have the training in place to avoid going from a dirty, contaminated room to one that has healthy plants.” Lezli Engelking started The Foundation of Cannabis Unified Standards. Courtesy Photo Rachna Saini is a senior quality and regulatory consultant with Toronto- based Cannabis License Experts. Courtesy Photo Readying for a Recall