Product Liability Risks Cannabis Companies Must Consider

• Published date: 20 December 2021
• Subject Matter: Consumer Protection, Cannabis & Hemp, Product Liability & Safety
• Law Firm: Arnold & Porter
• Author: Mr David A. Kerschner and Aaron H. Levine

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...