California Cannabis: Where Prop. 65 and Labeling Rules Meet

05 Mar California Cannabis: Where Prop. 65 and Labeling Rules Meet

Our California cannabis attorneys have been getting inundated with packaging and labeling review since each California cannabis licensing agency adopted its final rules in January 2019, and even before that when the rules were under consideration. One thing that many California cannabis companies—and especially cannabis companies from other states who are stakeholders in California—often overlook or gloss over are the requirements of the Safe Drinking Water and Toxic Enforcement Act of 1986 (or “Prop. 65”). It’s been a while since we’ve written about the specific requirements Prop. 65 for California cannabis goods, so we thought it best to look back at the Prop. 65 rules and see how they square with the final cannabis rules.

For some refresher, Prop. 65 is NOT a cannabis-specific law. It was passed long before the Medicinal and Adult-Use Cannabis Regulation and Safety Act (or “MAUCRSA”) and applies broadly to all kinds of goods and other things in California. What’s important for California cannabis companies to know about Prop. 65 is that it requires companies to notify consumers about the presence of certain harmful chemicals in cannabis goods.

Prop. 65 requires the California Office of Environmental Health Hazard Assessment (“OEHHA”), which is part of the California Environmental Protection agency, to publish a list of chemicals known to cause cancer, birth defects, or other types of reproductive harm. The OEHHA’s regulations give California businesses a roadmap for, among other things, how to provide notice to consumers if certain carcinogens or reproductive toxins are present in consumer products (i.e., marijuana). In light of Prop. 65’s requirements, any cannabis licensee needs to ask itself a number of important questions:

Do Prop. 65’s Warning Requirements Even Apply?

The first question cannabis businesses need to ask themselves in a Prop. 65 analysis is whether they’re subject to Prop. 65 at all. There are a short list of exemptions that are applicable to California cannabis products:

• Businesses with fewer than 10 employees and government agencies.
• Situations where a business can demonstrate that “exposure poses no significant risk assuming lifetime exposure at the level in question for substances known to the state to cause cancer, and that the exposure will have no observable effect assuming exposure at one thousand (1000) times the level in question for substances known to the state to cause reproductive toxicity, based on evidence and standards of comparable scientific validity to the evidence and standards which form the scientific basis for the listing of such chemical”. This is a mouthful, requires demonstrable evidence, and places the burden on any defendant in a case to prove.
• According to the California Attorney General, “[e]xposures to listed chemicals that occur naturally in foods” is also an exemption. There is a more detailed discussion of this exemption in the regs.

Are Prop. 65-Type Chemicals Present?

Once California cannabis companies determine that Prop. 65 applies to them, they need to determine what specific chemicals are present in their cannabis goods. The Prop. 65 list now includes more than 1,000 chemicals. In 2009, marijuana smoke was added to the Prop. 65 list of chemicals known to cause cancer. Thus, all cannabis flower is subject to Prop. 65 warnings since all flower produces “marijuana smoke.”

But Prop. 65 doesn’t end there. In most cases, other manufactured cannabis products—such as oils, vape cartridges, and even edibles—contain at least one chemical on OEHHA’s gigantic Prop. 65 list. Because of this, many (if not most) cannabis businesses in California will be subject to Prop. 65 warning requirements. And as noted below, none of the California cannabis agencies regulate or even explain how to comply with Prop. 65.

How to Provide Warnings?

This may be one of the more complicated issues, and this is where the cannabis regulations come in.

As any California cannabis licensee knows, the California Department of Public Health (“CDPH”)—which regulates manufacturers—is the agency which has promulgated explicit packaging and labeling rules in its regulations. Even though these regulations apply to manufacturer licensees, the other two agencies explicitly incorporate them for packaging and labeling. The CDPH regulations don’t explicitly require Prop. 65 compliance, but the CDPH does have FAQs which note that Prop. 65 compliance may be necessary. That said, there are some pretty important aspects of the CDPH regulations to consider when thinking about Prop. 65.

First, the CDPH requires that for any product, an informational panel and primary panel be present and provide certain information (the necessary information changes from product to product). The CDPH is clear, however, that each label can include other information. Typically, we see Prop. 65 warnings somewhere on one of these two labels, though the CDPH doesn’t specifically require it. The reason is probably because section 26501(d) of the OEHHA rules requires that the warning be conspicuously displayed on a package in a way that a consumer would be likely to actually read and understand it. That probably won’t happen if the label is tucked away into a corner on the bottom of the box.

Second, the CDPH has explicit requirements for multi-layered product packaging (CDPH rules 40403). The gist of these rules is that for products with separable layers of packaging, each layer must include different kinds of information (the required information changes based on the product, but for some products all that must be present is a compliant version of the CDPH’s universal symbol).

These regulations raise two important questions: (1) Does a Prop. 65 warning need to be present on each layer of separable packaging? and (2) What does the Prop. 65 warning need to say?

The answer to the first question is probably “no.” In the OEHHA’s final statement of reasons for its regulations, the OEHHA responded to a comment as follows: “These regulations do not require a warning on both the container and the outer packaging, although some businesses may choose to provide both to ensure that the average consumer receives a warning as required by the Act.” Thus, a single warning is probably fine, and our California cannabis attorneys typically see that on the outer layer of the packaging.

The answer to the second question is more complex, but there are a number of options. OEHHA rule 25602(a) says that for consumer products, a warning meets the safe-harbor if it is provided via one of four methods. One of those methods is a “label” compliant with section 25603(a), and the other is an “on-product” warning that complies with section 26503(b). Label is defined as “a display of written, printed, or graphic material that is affixed to a product or its immediate container or wrapper.” The term “on-product”, however, is not defined.

That said, section 25603(a) provides a mechanism for providing full notice by using the triangle, the word “WARNING”, and specific language that identifies the carcinogens and/or reproductive toxicants. It must be on a label as notice above, which can be on the product or its immediate wrapper.  In this case, the label must have one of the following four full warnings which specifically identify the problematic chemicals.

On the other hand, section 25603(b) governs “on-product” warnings. On-product warnings are abbreviated warnings that require only the Prop. 65 symbol, the word “WARNING”, and a short-form warning which does not need to identify all chemicals. While the term “on product” is not defined, the OEHHA’s final statement of reasons says in part:

For purposes of subsection 25603(b), the short-form warning may only be provided on the product, which would include the immediate container (box, packaging) or wrapper for the product, but would not include other types of “labeling” as defined in subsection 25600.1(j).

In other words, it appears that the short-form, on-product warning in section 25603(b) is fine on actual products or their packaging, but not on websites, placards, etc. In that case, the full warnings from 25603(a) are likely required.

The rules also have specific requirements for the text size, the wording, the symbols that must be used, and as noted above, the placement. These rules can be complex for companies to remember, so it is critical for California cannabis companies to consult with experienced regulatory counsel prior to creating packaging or labeling to ensure that they comply with the CDPH regs and Prop. 65. That’s because Prop. 65 is a complex law and there can be many pitfalls—including litigation—for failure to adequately comply.