Handling Recalls in the Cannabis Industry: What You Need to Know

Kim Stuck, CEO and founder of Allay Consulting | Image Credit: © Kim Stuck

Have you ever found a foreign object in your food or felt unwell after eating? Each year in the United States, 1 in 6 people fall ill from food-borne diseases, with 128,000 hospitalizations and 3,000 deaths on average. We've seen large-scale recalls involving listeria in cantaloupes, salmonella in peanut butter, and metal fragments in ground beef. More recently, cannabis products have been recalled due to unhealthy levels of molds, yeasts, pesticides, and heavy metals. It's nearly impossible for a consumable company to avoid experiencing a recall, often through no fault of the manufacturer. The goal is to minimize the chances of a recall and, if one becomes necessary, to follow the proper recall protocol to prevent further complications, such as fines or lawsuits due to negligence.

The Misconception of Immunity in the Cannabis Industry

Many in the cannabis industry believe that recalls are unlikely to happen to them since the Food and Drug Administration (FDA) and many health departments do not actively regulate them. However, this is a dangerous misconception. All companies, whether in the food or cannabis industry, are likely to face at least one recall during their operation. It’s not a matter of if, but when. In some states, local and state health departments are beginning to implement regulations if they haven’t already done so. Additionally, with the anticipated re-scheduling or de-scheduling of cannabis, the FDA is expected to become increasingly involved, likely leading to an increase in recalls.

The real question is, how will your company handle it when it happens? Being proactive now will save your company thousands down the line. With proper preparation, standard operating procedures, and protocols in place, you can greatly minimize the impact of a recall.

Regulatory Oversight and Recall Notifications

To protect consumers, the FDA and local/state regulatory authorities issue recalls notifying the public about contaminated products. These recalls can originate from your product or an external manufacturer, involving in-house manufactured ingredients, externally sourced ingredients, or primary packaging materials. While specifics vary by state, the overall recall process aligns with FDA guidelines. Understanding this process can help you manage a recall more effectively.

The Importance of Testing and Third-Party Verification

Recalls aren't always your company's fault, but that doesn’t mean you won’t bear the brunt of the consequences. This is often due to companies failing to test all products thoroughly before using them. Certificates of Analysis (COAs) from suppliers may not always be accurate especially in the cannabis industry, so it's crucial to conduct your own third-party testing, especially with new vendors. These precautions, though costly, can save you significant expenses in the long run.

Risks with White Label Products

Using white labelers to produce your products adds another layer of risk. If a recall is issued, it’s your brand that will be negatively affected, even if the fault lies with the white labeler. To mitigate this risk, conduct routine third-party food safety audits and ensure that your white label partners are current Good Manufacturing Practices (cGMP) certified. Don’t rely solely on claims of compliance—demand proof of current certifications and third-party audits, or require an audit program with required third party audits every 3-6 months to ensure the safety of your products.

Initial Steps of a Recall

The first step in a recall is determining its necessity. This can be a voluntary recall initiated by your company or a response to a notification from regulatory authorities. Triggers can include consumer complaints, social media posts, hospital visits, or even fatalities. Regardless of the origin, if your product is identified as the common link, you must act swiftly.

Identifying Affected Products

Quickly identifying the affected products is crucial and is sometimes conducted by a regulatory agency. This may involve tracing common ingredients, manufacturing dates, equipment used, staff involved, or packaging materials. Robust traceability systems are vital for this process, enabling you to pinpoint and recall specific products rather than issuing a blanket recall, which can be more damaging. Once the product is identified, all of the contaminated products would be placed under quarantine until next steps are decided or the product is destroyed.

Notification and Product Returns

The next step is to notify all consumers, wholesalers, and distributors who received the affected products. This can involve phone calls, mass emails, social media posts, press releases, and regulatory notifications. Be prepared for product returns, reimbursements, and disposals.

Investigating and Corrective Actions

After managing the recall, you need to investigate the root cause of the issue. This investigation will inform your corrective actions and help prevent future incidents. Implementing a Corrective Action Preventive Action (CAPA) plan is essential to addressing the problem and ensuring it doesn’t recur.

Developing a Comprehensive Recall Plan

A thorough recall plan is essential for navigating the complexities of a product recall. This plan should detail every step from identification to resolution and should be revisited and updated regularly. Here are some key components to include:

1. Recall Team and Responsibilities: Designate a recall coordinator and assemble a team responsible for handling various aspects of the recall. This team should include members from quality assurance, regulatory affairs, communications, and legal departments.
2. Notification Procedures: Outline the process for notifying customers, distributors, and regulatory authorities. Include templates for press releases, customer notifications, and internal communications.
3. Product Traceability Systems: Ensure that your traceability system can quickly identify and track affected products; this is more than just tracking tetrahydrocannabinol (THC), but all ingredients in your product. This system should link finished products to their raw materials and suppliers, as well as to the specific production batches.
4. Inventory Management: Develop protocols for managing recalled products, including procedures for quarantine, rework, or disposal. Ensure proper documentation and chain-of-custody tracking for all recalled items.
5. Customer Support: Set up a dedicated hotline or support system to handle customer inquiries and complaints related to the recall. Train customer service representatives to provide accurate information and support to affected consumers.

Preparing for Recalls

While recalls are never ideal, being prepared can make the process smoother. Collaborate with local and state regulatory agencies and establish a robust recall plan. Promote cGMP throughout your facility by becoming certified, utilize an Approved Supplier Program, and maintain a CAPA plan along with Consumer Complaint and Non-Conforming Product procedures. For some guidance regarding recall plans, here is an excellent resource from the Colorado state health department: CDPHE Recall Guidance (1).

Training and Mock Recalls

Regular training and conducting regular mock recalls can significantly enhance your team's preparedness. Conducting these exercises will help identify potential weaknesses in your recall plan and provide opportunities for improvement. It will also ensure that all team members understand their roles and responsibilities during an actual recall.

Legal and Insurance Considerations

Navigating the legal landscape of a recall can be challenging. It's essential to work closely with legal counsel to understand your liabilities and obligations. Additionally, review your insurance policies to ensure coverage for recall-related expenses, such as legal fees, public relations costs, and lost revenue.

Case Studies and Lessons Learned

Learning from others' experiences can provide valuable insights into handling recalls. Study case studies of recalls within the cannabis industry and beyond. Analyze the root causes, actions taken, and outcomes to identify best practices and potential pitfalls. Most recalls that have taken place in the industry are posted on regulatory government websites. Here is a list of examples from Colorado: MED Health and Safety Advisories (2).

Building Consumer Trust

A well-handled recall can enhance your brand's reputation by demonstrating your commitment to consumer safety. Transparent communication and swift action are critical. Engage with your customers through various channels, providing updates and reassurances about the steps you are taking to resolve the issue and prevent future occurrences.

Leveraging Technology

Technology can play a pivotal role in managing recalls. Implementing robust inventory management systems, automated traceability solutions, and real-time monitoring tools can streamline the recall process. Additionally, consider using blockchain or other track and trace technology to enhance transparency and traceability in your supply chain.

Industry Collaboration

Collaboration with industry peers and associations can strengthen your recall readiness. Participate in industry forums, share best practices, and stay informed about regulatory changes. Working together can help elevate industry standards and improve overall consumer safety.

Preventing Future Recalls

Preventing future recalls involves understanding the root cause of the issue and implementing measures to avoid similar problems. This could involve scrutinizing suppliers more rigorously, enhancing product testing protocols, addressing equipment malfunctions, or adjusting sanitation practices.

Recalls are an inevitable aspect of the cannabis industry, but they don’t have to be devastating. By being proactive, developing a comprehensive recall plan, and fostering a culture of compliance and safety, you can manage recalls effectively and protect your brand. Remember, the key to handling a recall is not just reacting to the incident, but also being thoroughly prepared to prevent and manage potential issues.

References

1. https://sbg.colorado.gov/sites/sbg/files/documents/210108%20Recall%20Plan_Guidance.pdf

2. https://sbg.colorado.gov/med/health-and-safety-advisories

About the Author

Kim Stuck is the CEO and founder of Allay Consulting. Direct correspondence to: kim.stuck@allayconsulting.com.