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Cannabis regulation in California
In some regions of the world, the discussion points about cannabis have extended beyond decriminalizing cannabis-derived products. Regulatory authorities have initiated policies to control the distribution, packaging, and labeling of these products. Medical cannabis has gained wide popularity in the United States, and as expected for a medicinal product, strict labeling and packaging guidelines are needed to ensure safety for patients. Different states have taken logical steps to enact policies to control the labeling of information on legal cannabis.
Cannabis packaging and labeling regulations in the U.S.
In the U.S. cannabis packaging and labeling rules are ever-changing and vital to ensure compliance with state regulations. These rules are under strict surveillance and are peculiar to each state, although there are few points of similarity: Labels and packaging are required to be unambiguous, childproof, and contain no medical claim. In Alaska, the existing packaging rules request that cannabis packages should be opaque, resealable, and child-resistant with a single label affixed to the package. Labels are expected to contain a range of product information including retail store details, store license number, store license number, the estimated amount of delta-9-tetrahydrocannabinol (THC) and statements informing the buyer of the adverse effects and health risks of cannabis.
Section 21a-408-56 of Connecticut’s cannabis regulation clearly defines the guideline for packaging and labeling cannabis products. Licensed producers are required to sell cannabis products in child-resistant unit sizes that contain no more than a one-month supply of cannabis. Information required on the label includes the producers’ details, product serial number, a statement on the laboratory analysis of the product, testing and packaging dates, and a terpenes profile indicating the list of all cannabinoids present in the package. The rules are relatively relaxed in Delaware, where the regulation only requires that the label provides product information capturing strain name, batch number, levels of active ingredients, and a statement reaffirming the user that the products are meant solely for medical purposes.
In California the Department of Public Health’s Manufactured Cannabis Safety Branch is responsible for establishing the standards regulations for the packaging and labeling of cannabis and cannabis-derived products. The regulations describe entirely the labeling checklist for manufactured cannabis, flowers, and flower-only pre-rolls. In 2019, the California Department of Public Health updated the existing labeling and packaging regulations for the state. The new regulation replaced the Emergency Regulations for shared-use manufacturing facilities and implemented the current guidelines of the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA).
As stated in this regulation, labeling requirements for cannabis products apply to two areas on the product: the primary panel and the information panel. The primary panel must be placed on the packaging and displayed in a way buyers can notice the contents easily. Information contained on the primary label should include product identity—a generic or common name that describes the product—and its Universal Symbol—a California symbol printed in black that identifies items containing cannabis and net weight (the weight of the packaged contents) in both metric and U.S. customary units. Primary labels on edible cannabis products are also required to be inscribed with the word “cannabis-infused.”
The informational panel is any part of the label that is not the primary panel. Labeling on the informational panel must contain the manufacturer name and contact information as listed on the license certificate, date of manufacturing/packaging, batch number, a list of all ingredients in descending order by volume, a list of all major allergens present, and the UID number—a unique tracking number issued through Track-and-Trace. Other information on this panel includes the expiration date, details of artificial food coloring if applicable, and the popular government warning statement for cannabis products. Edible products must also contain information on sodium, sugar, carbohydrate, and total fat per serving in milligrams or grams.
Packaging requirements are expected to be tamper-proof, resealable for multi-use products, child-resistant, and must not be appealing to children. In accordance with the new adult-use regulations issued by the California Bureau of Cannabis Control, all retailers are expected to package the sold units in opaque exit bags at the point of dispensing.
New labeling and packaging regulations in California
Recreational cannabis has been decriminalized in California. This means a new set of labeling and packaging rules are expected to take effect in order to standardize product safety for users. On January 3, 2020, California’s Office of Environmental Health Hazard Assessment issued a directive adding cannabis smoke and THC to the list of the chemicals under the Proposition 65 labeling guidelines. The Safe Drinking Water and Toxic Enforcement Act of 1986, better known as Proposition 65, is a state law mandating manufacturers to add special labels for packages containing products considered “reproductive toxins.”
Proposition 65 does not specify a legal, safe limit for substances added on the listing. Consequently, products containing detectable limits—including cannabis products containing less than 0.3 percent, as specified by the 2018 Farm Bill—are required to be labeled with a special warning about the significant reproductive risk posed by the products. The new directive has been publicized, and compliance with the rule is expected to start by January 3, 2021.
Impacts of California labeling and packaging rules on the cannabis industry
By adding THC to the list of substances affected by the Proposition 65 rule, all cannabis and cannabis-derived products containing detectable levels of THC are expected to comply with the new labeling rules by January 2021. As defined by the 2018 Farm Bill, all cannabis products containing less than 0.3 percent THC on a dry weight basis have been legalized for cultivation, sale, distribution, and interstate commerce. The cannabis industry relies heavily on hemp and other cannabis products. In compliance with the new directive, all manufacturers in the industry are mandated to modify their product labels to include information on the significant reproductive risk caused by cannabis smoke and THC.
In essence, this directive increases the ever-growing number of strict regulations that stakeholders in the cannabis industry must comply with. Market projections made in reference to the new regulation suggest that production levels might not be affected; however, consumption rates are expected to decline, especially among high-risk customers, including nursing mothers and females of reproductive age. Under the provisions of Proposition 65, non-compliance with the rule can result in a statutory fine of $2,500 per violation per day. Starting in January 2021, the industry faces significant litigation risk that can adversely affect the projected valuations of the booming California cannabis industry.
Manufacturers of cannabis and cannabis-derived products are expected to implement the new regulation before January 3, 2021, to avoid facing private right of action that can be initiated by private parties or the California Attorney General.