Product Liability Risks Cannabis Companies Must Consider

On Nov. 15, the States Reform Act was introduced into the U.S. House of Representatives, a bill that seeks to remove marijuana from Schedule I status under the Controlled Substances Act. This bill follows several others, including the Marijuana Opportunity Reinvestment and Expungement Act¹ and the Secure and Fair Enforcement Banking Act,² which were previously approved by the House.

There is little doubt that the popularity of cannabis and CBD products is growing, and some lawmakers are now looking to decrease cannabis regulation at the federal level and expand access. Indeed, a 2019 Gallup survey found that 14% of U.S. adults use CBD products,³ and sales of cannabis in the U.S. topped $17 billion in 2020, increasing over 40% from 2019.⁴

However, the U.S. Food and Drug Administration has acknowledged that "there are many unanswered questions about the science, safety, and quality of products containing CBD."⁵

The Centers for Disease Control and Prevention website notes that more research is needed to understand the full impact of marijuana use on the cardiovascular system, to determine if it might lead to higher risk of death, and to understand the effects that marijuana smoking may have on lung cancer and other respiratory diseases like emphysema and COPD.⁶

Moreover, a newly published study in the Canadian Medical Association Journal found that recent cannabis use was associated with increased odds of history of myocardial infarction in young adults, and the magnitude of this association increased among more frequent users of cannabis.⁷

The expanding and profitable cannabis and CBD market, coupled with the unknowns regarding potential side effects and safety, creates risk for product liability litigation in the future. This article looks at the types of product liability actions that the cannabis industry may face, and provides some basic guidance on how to best prepare for, and defend, these potentially costly litigations.

One type of case the cannabis industry may see going forward is failure to warn litigation. These cases often include allegations that a manufacturer did not adequately instruct consumers about a product's risks, side effects or correct use.

Lessons learned from other industries can provide some guidance on how courts may adjudicate these claims. For example, courts have dismissed failure to warn claims relating to alcohol, noting that a manufacturer's duty to warn arises when there is a need to inform consumers of dangers of which they are unaware, and the dangers associated with alcohol consumption are very well known.⁸

While not every side effect will be considered obvious and commonly known, it is certainly possible that the more commonly known side effects of cannabis—e.g., lethargy—may be considered obvious. Nonetheless, it will be important for industry players to make sure their products have labels that both comply with regulatory guidelines and properly disclose the risks associated with use.

In addition to failure to warn claims, the cannabis industry is likely to see manufacturing and design defect claims. Manufacturing defect claims allege that a product is improperly manufactured and departs from its intended design, whereas a design defect case is based on an allegation that a defect is inherent in the design of the product itself.

The cannabis industry could see these cases in a variety of contexts, including cases related to the use of certain chemicals in the agricultural process, and vaping device malfunctions that lead to burns and other injuries. Additionally, if a cannabis product contains a dangerous level of THC that leads to user's injuries, this could also lead to possible manufacturing and design defect claims.

In the 2014 criminal case of People of the State of Colorado v. Richard Kirk, the defendant admitted to murdering his wife after eating a marijuana edible. Richard Kirk's attorneys reported to the Denver County Court that they had been prepared to show that marijuana led to the murder, and that they had an emergency room doctor and other experts ready to testify.⁹

Similarly, in March 2015, a 19-year old man leapt to his death from a balcony after consuming a marijuana-infused cookie. An autopsy report from the incident lists marijuana intoxication as a significant contributing factor in the death.¹⁰

Although not direct examples of filed civil cases, these two situations provide context for how plaintiffs in product liability litigation might claim that marijuana caused them to hurt themselves or others, blaming too high a dose of THC.

A key aspect of almost any product liability case involving cannabis will be the question of causation. Plaintiffs' cases will require expert testimony proving that cannabis is capable of causing the alleged injury (general causation), and that it in fact caused the specific injury (specific causation). Industry defendants should look for ways to challenge these opinions.

In federal court, defendants can assert a Daubert challenge, where the trial judge serves as the gatekeeper to determine whether an expert's evidence is based on scientifically valid reasoning. Likewise, in New York state, courts employ the Frye standard to adjudicate whether the scientific techniques used are generally accepted by other scientists as reliable. If a plaintiff is unable to pass these tests, they will be unable to present expert testimony to the jury.

Therefore, given that the science surrounding the effects of cannabis is still evolving, it will be important to scrutinize expert opinions and methodology. For example a closer look at the Canadian Medical Association paper regarding cannabis use and history of myocardial infarction in young adults shows that the findings were only statistically significant in users who consumed cannabis through smoking—and, importantly, the authors reported that they did not have information on whether the participants in their study began using cannabis before or after having a myocardial infarction.

Since expert challenges present an opportunity for the cannabis industry to defend against new litigations, it will be important to investigate any new allegations to ensure they are based on sound science and a reliable methodology, and to look for ways to push for early adjudication on the question of causation.

Furthermore, while much is yet to be seen about the types of product liability cases that the cannabis industry may face, industry players can take certain basic steps now to potentially mitigate future litigation risks, such as the following:

• Keep an open line of communication with regulators. As the laws and regulations governing the sale and use of cannabis products continues to change, it is important for industry players to engage with regulators. Early engagement may provide companies with the guidance they need to effectively mitigate risks. Moreover, communications relating to labeling may assist with possible preemption arguments in future failure to warn cases. Additionally, it is important to follow the laws and guidelines that govern reporting adverse events to regulatory bodies.
• Keep labels and advertising up to date. Industry players should ensure their product labeling and advertising follows regulatory guidelines and properly discloses all known risks/benefits, ingredients and dosage information. Sales and marketing teams should be educated about this information, and how to accurately communicate it to customers.
• Maintain and document quality control procedures. Clear manufacturing and testing protocols can help manufactures avoid product defects that lead to costly lawsuits. It is also important to properly train staff to follow these protocols. While having clear standard operating procedures is generally helpful in litigation, they can be equally as damaging if company employees are not trained to follow the procedures.
• Stay on top of the science. As noted above, an essential element in any case will be causation, and plaintiffs will have to prove that the cannabis caused their injury. Therefore, industry players should stay current on the science, including potential side effects. Developing expertise internally will not only help a company keep warning information up to date, but will also help them confidently defend their products against meritless claims.

The current federal illegality of marijuana, combined with varying, evolving state laws and the evolving science on cannabis, present challenges for entities faced with a product liability action. In addition to staying current on governing laws, companies will be well served by following court decisions on product liability in this area.