The Cannabis Industry’s Tylenol Moment, A Solution Is Complicated and a Wrong Turn Could Be Fatal

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An Open Letter To The Cannabis Industry: 

This is Our Tylenol Moment.  The Solution Is Neither Simple Nor Pleasant. A Wrong Turn Could be Fatal. But What We Have To Do Is Obvious: Stop Selling Vaping Products.

CBE Press has been an advocate of the nascent Cannabis Industry since our launch back in June of 2014, the year that Colorado and Washington began adult-use regulatory programs. Our mission has always been to help legally regulated cannabis licensees prosper by providing information that helps them run their businesses effectively.  The cannabis industry is a family, and we’re thrilled to be a part of that family.  But it’s time for some honest talk among us, which is why we are asserting the following position:

It is time to stop selling products that may be causing the damage widely attributed to vaping, even if those accusations may eventually be proven to be incorrect. Concurrently, all those who also consider themselves a part of this industry and the organizations that represent them must now move quickly to get on the same page before the brand and public trust is damaged permanently.

To do that, it’s also time for all the industry associations and advocacy organizations to stop competing with one another and to rally together instead. All Cannabis Industry players, public or private, grower, processor, retailer or ancillary business, need to get actively involved in helping to create a trusted brand and industry. Consumer safety has to be an uncompromisable basic premise of our industry.  

The risk:benefit ratio of the vape crisis. Regardless of how attractive it is to ignore the situation, the risk is too big.

The vape crisis that has hit both the E-cigarette and Cannabis Industries over the last several months is an unprecedented consumer safety event.  We can think about how nice it would be to dodge a bullet, but what is the risk?  We can see the unraveling of years of hard work, perseverance and large sums of capital. We can also see industry-wide revenues grind to a halt. 

Let’s look at what has already happened to our industry. As of this week, Massachusetts has banned all vape products (nicotine and THC). New York, Michigan and Washington have banned all flavored vape products.  Colorado marijuana regulators are finalizing a ban on certain additives in cannabis vape products — but with people getting sick and dying, why are they waiting until January 1, 2020?

But wait, there’s more.  On Thursday, October 3rd, the Cabinet Secretary of the New Mexico Department of Health, Kathyleen M. Kunkel, issued an ORDER requiring licensees that sell vape products to include a disclaimer on their package.  As a matter of practicality, all licensed providers must pull all product off the shelves until they are in compliance.  How harsh is the warning? Judge for yourself:

“WARNING: Vaping cannabis derived products containing tetrahydrocannabinol (THC) has been associated with cases of severe lung injury, leading to difficulty breathing, hospitalization, and even death.”

The next day, the FDA issued the following, “Statement on consumer warning to stop using THC vaping products amid ongoing investigation into lung illnesses”. 

In short, the regulatory community appears to be mobilizing to ban or restrict vape products nationwide. CBE applauds that action.  People are getting sick and dying from an unknown cause and the only thing that we seem to know for sure is that vape products are the common thread. Is there an option?

1982:  The Original Tylenol Moment. 

Many of the folks chasing the “Green Rush” have no knowledge of one of the largest consumer safety threats ever. A few bottles of Tylenol were found to contain lethal poison. That not only threatened sales of Tylenol, but all other brands made by Tylenol’s parents, Johnson & Johnson.  For those who don’t know what I am talking about, here is a quick update and link to Wikipedia, which explains why “Tylenol Moment” has become short-hand for “a crisis situation that is solved when an organization decides to bite the bullet and protect their consumers and the integrity of their brand even at the risk of losing millions of dollars of revenue.”

Excerpted from Wikipedia, The Chicago Tylenol Murders were a series of poisoning deaths resulting from tampering in the area in 1982. The victims had all taken Tylenol-branded acetaminophen capsules that had been laced with potassium cyanide.[1]A total of seven people died in the original poisonings, with several more deaths in subsequent copy cat crimes.

No suspect was ever charged or convicted of the poisonings. New York City resident James William Lewis was convicted of extortion for sending a letter to Johnson that took credit for the deaths and demanded $1 million to stop them, but evidence tying him to the actual poisoning never emerged.

J & J, at great cost to the company, took all Tylenol products off the shelves worldwide until they could develop a solution. The incidents led to reforms in the packaging of substances and to federal anti-tampering laws. The actions of Johnson & Johnson to reduce deaths and warn the public of poisoning risks have been widely praised as an exemplary public relations response to such a crisis.[2]

As Time Magazine reported back in 2014: “J&J emerged as another victim of the crime and one that put customer safety above profit. It even issued national warnings urging the public not to take Tylenol and established a hotline for worried customers to call.

“Tylenol relatively quickly reestablished its brand, recovering the entire market share it lost during the cyanide scare. Though things could have gone very differently, the episode’s most lasting legacy has been in the annals of public relations, not poison control: the case has since become a model for effective corporate crisis management.”

Today — Right Now:  The Cannabis Industry’s Tylenol Moment.

The essential first step in solving any problem is defining it correctly.  So, let’s get real.  This isn’t a minor situation we’re confronting.  This isn’t a petty annoyance that will just go away.  Here’s the harsh reality as of October 15, conducted by The Center for Disease Control that spans almost all states, involves over a thousand patients, and involves a wide variety of brands and substances and e-cigarette, or vaping, products:

  • 1,479* lung injury cases associated with e-cigarette use, or vaping, have been reported to CDC from the District of Columbia and all states except for Alaska.
  • Thirty-three deaths have been confirmed in 24 states. More deaths are under investigation.
  • To date, national and state data suggest that products containing THC, particularly those obtained off the street or from other informal sources (e.g., friends, family members, or illicit dealers), are linked to most of the cases and play a major role in the outbreak.

The Risk Is Compounded by the Fact That The Situation Is Ongoing, While So Much Remains Unknown and the Frequency of Cases is Increasing.

As new cases are being reported, it becomes even more difficult to determine the cause or causes of this outbreak. But one thing is clear: the link to vaping is formidable. All patients have a reported history of e-cigarette product use, or vaping, and no consistent evidence of an infectious cause has been discovered. The specific chemical exposure(s) causing lung injuries associated with e-cigarette use, or vaping, remains unknown at this time. And thus the risk continues.

In fact, there is so much that is unknown that the CDC reports includes a “What We Don’t Know” section.  Take note:   

  • At this time, FDA and CDC have not identified the cause or causes of the lung injuries in these cases, and the only commonality among all cases is that patients report the use of e-cigarette, or vaping, products.
  • No one compound or ingredient has emerged as the cause of these illnesses to date; and it may be that there is more than one cause of this outbreak. Many different substances and product sources are still under investigation. The specific chemical exposure(s) causing lung injuries associated with e-cigarette product use, or vaping, remains unknown at this time.

The lack of knowledge doesn’t decrease risk. It increases risk. Accordingly, the CDC recommends that people should not:

  • Use e-cigarette, or vaping, products that contain THC.
  • Buy any type of e-cigarette, or vaping, products, particularly those containing THC, off the street.
  • Modify or add any substances to e-cigarette, or vaping, products that are not intended by the manufacturer, including products purchased through retail establishments.

The gist of the medical recommendations is that because the specific cause or causes of lung injury are not yet known, the only way to assure that people are not at risk while the investigation continues is to consider refraining from use of all e-cigarette and vaping products.  

What If Cannabis Vaping Products Sold at Dispensaries Were Found to be Not at Fault?  Unfortunately, the Reality is Not So Good.

What the CDC fails to mention in their “off the streets” comment is that additives and fillers have been in products sold by regulated cannabis licensees for years.  According to industry sources with whom we’ve been talking, that is still the case, and products that include fillers and additives  are still being sold by licensed retailers. This problem isn’t new, and dates back to at least 2014, when we found a vaporizer online from O.penVape (one of the cannabis industry’s major vaping brands)  that contained 462.36 mg of Cannabidiol B Cannabis Oil and 197.97 mg of PEG (polyethylene glycol), which is a known carcinogen when heated.   

That isn’t an isolated instance.  Other fillers that we know have been (and are likely still being) used by both regulated and unregulated entities include Propylene Glycol (PG), terpenes (cannabis and food) and Vitamin E Acetate.  PG and PEG have been shown to break down into carcinogenic substances, including formaldehyde, at temperatures around 450F., which compares to consumers regularly vaping at temperatures exceeding 475F.  Vitamin E oil, on the other hand, turns into acetate, which is known to cause pneumonia and chronic lung illness when introduced into the human respiratory system.

A study  by Nicholas Sullivan, Sytze Elzinga, and Jeffrey C. Raber titled “Determination of Pesticide Residues in Cannabis” that appeared in the 2013 Journal of Toxicology, suggested that the potential of pesticide and chemical residue exposures to cannabis users is substantial and may pose a significant toxicological threat in the absence of adequate regulatory frameworks.

Our sources tell us that it has been a common practice in California for some time that licensed operators have been operating illicit mirror operations. For example, Leafly reported on October 4, that a facility apparently owned by Kushy Punch, a state-licensed California operator (and a National Cannabis Industry Association [NCIA] member), was raided by California Department of Consumer Affairs investigators who found an illegal cannabis product manufacturing operation. Authorities seized a number of finished products, including gummies as well as disposable vaporizers in Kushy Vape packaging. Leafly cites a source that alleged that the illegal manufacturing facility is “using untested black-market oil that is heavy in pesticide.” If true, that’s a scary situation.

As early as 2011, Colorado learned that E. coli and salmonella bacteria were present in many plants and cultivated biomass for sale to medical cannabis patients. The cause was determined to be the presence of the deadly bacteria in worm castings, a soil supplement used to adjust PH levels for a more favorable growing environment. Fortunately, that contamination source was identified early in the game. However, according to sources, that information was not shared nationwide with states that were creating their own supply chain from scratch. Something is inherently wrong if we allow that to characterize our industry.

Let’s not forget that biomass contaminated with bacteria, pesticides or other contaminants could conceivably find their way into regulated infused products that use cannabis oils extracted from that raw material that are ultimately ingested or administered topically, exposing consumers to yet another health threat.

As I said, there is no scientific data studying the long-term effects on the human biosphere of inhaled combusted flower (contaminated or not) or vaporized cannabis products that use a variety of fillers like food or cannabis-based terpenes to adjust the viscosity of the oils used to make them tastier or to enhance the vaporization process. At the end of the day, there are an unlimited number of possible fillers and I doubt they have ever been tested for their effects on human beings when heated and inhaled into the respiratory and cardiovascular system.  That represents another risk to our industry — is it a risk we’re willing to take?

The CDC, the FDA, USDA and other regulators don’t know the answer to these questions (although I would bet that the tobacco industry has years and years of experience and research that would shed light on this and other questions about combusted or heated plant based or flavor additive materials). But, the excuse of “we just didn’t know” doesn’t fly here– remember how many people have fallen ill or have already died. And that doesn’t count the people that were never associated with the casualty counts of this crisis.

All this gives rise to a single question: Where is the science and research that identifies what fillers can be used safely when heated or combusted? Seed to Sale tracking systems, relied on to track legally licensed operators, have their limitations because they were not designed to track illicit operators or regulated manufacturers of infused products that are using additives. And, Quite simply, there is no current guarantee that vaping products are safe for consumers.

The Vaping Crisis Highlights the Need for the Cannabis Industry to establish a real cohesiveness and establish a unified voice.  

Today, the industry lacks the leadership to effectively decide how it is going to deal with this health crisis. The Cannabis Industry is like the NFL, a brand comprised of a collection of companies that are providing a legally regulated consumer packaged good to adult consumers. The individual entities run their own teams and are collectively part of the industry brand. The INDUSTRY BRAND IS SEVERELY AT RISK and it has no Roger Goodell (love him or hate him) speaking on its collective behalf.

And while we are using the NFL analogy, let’s take a step back and recognize who the team owners (industry stakeholders) are in the Cannabis Industry: first and foremost it is the consumers who ultimately make the industry viable and will decide its fate when their safety is ignored or marginalized. Without public trust the promise of billions of dollars in regulated revenues will evaporate in a hurry and revert back to the illicit black market.

Industry’s stakeholders and their individual and collective actions will ultimately determine consumer opinion and industry trust if they decide to prioritize consumer safety first. This includes:

  • Licensees (Producers, Processors, Retailers, Lab Testing Services, Delivery Services etc.)
  • Ancillary Businesses (including the manufacturers of extraction and distillation equipment, ingredient suppliers, vape oil cartridge filling machines, packaging companies, vape pen manufactures, insurance underwriters, lawyers etc.)
  • Regulators (including State and Federal regulatory authorities, public health agencies, as well as politicians  as well as the IRS, FDA, local, state and federal political operatives)
  • Capital Markets (including the banking sector, insures, family funds, individual investors, the Canadian & American stock exchanges etc.)
  • State and national cannabis industry associations
  • Science & Academia
  • The National, local and industry press/media

The Consumers Are Not The Only Ones At Risk. Our entire industry is.

It goes without saying that, given the opportunity, Big Tobacco, Big Pharma, the black market, prohibitionists and others who have resisted cannabis legalization will certainly try to capitalize on this crisis to influence policy decisions.

CBE contributor and Public Relations expert Doug Poretz commented on the lack of industry uniformity in his op-ed piece in September, “How Many More Crises Will It Take For The Cannabis Industry To Realize That It Has An Irrational Structure To Run An Effective Public Affairs Campaign?”

The key revenue drivers for the Cannabis Industry are flower, concentrates, infused products in the form of edibles, salves, tinctures etc. Until the vape crisis became public, vape products alone made-up roughly a third of cannabis sales in California according to industry data analytics firm Headset. Combined with edibles and other infused products, we are talking about 40-45% of the revenues generated in regulated markets. BDS Analytics paints a similar revenue exposure risk to the industry as highlighted in this recent New Cannabis Ventures article.

Flower, which dominates regulated market sales, already poses risks due to residuals of pesticides being combusted and inhaled with the smoke generated in an unfiltered delivery system. Sure there are testing requirements at state regulatory agencies and solutions currently available to both licensed and unlicensed operators to eradicate molds or other impurities from finished products. But where are the unified production and manufacturing standards that are sorely needed throughout the regulated states? And where are all of the relevant oversight agencies actively participating in developing and applying those standards state by state or federally?

Is self-regulation really an option in light of the Kushy Punch story and reports that they aren’t the only legal player that has shadow operations in California and possibly replicated in other regulated markets? Do we all remember Sweet Leaf?

What about the for-profit National Association of Cannabis Businesses (NACB) that attempted to make a buck off of self-regulation a few years ago (before its founder, a few high level employees, and the consultants backing it departed or went silent)?

National & state associations as well as numerous advocacy organizations, have been slow to react to the Vaping Crisis that increasingly threatens to derail years of regulated industry development, despite the fact that crisis management best practices demand an immediate response. These associations (some of which are not-for profit and others for profit) have presented differing and competing responses to the Vaping Crisis.

And, in light of the injuries and deaths reported to date, CBE finds the response from at least one industry regulator confusing. When Massachusetts Governor Baker declared that he would ban the sale of all vape products for 4 months ten days ago, Shaleen Title, commissioner of the Massachusetts Cannabis Control Commission and a long-time legalization advocate, sharply criticized the ban. In a tweet Commissioner Title tweeted “[The ban is] purposely pushing people into the illicit market — precisely where the dangerous products are — goes against every principle of public health and harm reduction. It is dangerous, short-sighted, and undermines the benefits of legal regulation.” 

It is dangerous to keep selling products that the top regulatory bodies have identified as a common thread that is killing people and making people ill Commissioner.

Two national cannabis advocacy organizations issued statements in September, The Cannabis Trade Federation (CTF) and Marijuana Policy Project (MPP)CTF has supported Title’s position as well. We have not yet seen a statement from the National Cannabis Roundtable.

A third, The National Cannabis Industry Association (NCIA), whose website tagline includes, “Advocating for the Responsible Cannabis Industry”, positions itself as the largest industry association. According to the NCIA website, “It is leading the charge to protect legal cannabis businesses, defend our state laws, and advance federal policy reforms.”  But  where is their role in consumer safety mentioned? NCIA is using the Vaping Crisis to call for the descheduling of cannabis and legalizing it at the federal level. The timing of NCIA’s call (which came months after the first reports of injury and deaths) feels trite and opportunistic even though their motivation is surely due to the consumer safety risks posed by the crisis and not their members revenues. 

BTW, Kushy Punch is one of NCIA’s dues paying members. How credible is NCIA’s voice on Capitol Hill in light of California’s investigation of a licensed operator that has an alleged illegal mirror operation moving tainted product to consumers?

Additionally, one wonders whether NCIA has thought through the implications of their Vaping Crisis-motivated call for federal legalization. Sure, de-scheduling and legalizing cannabis will lift the veil that has restricted research for decades. And it will also bring the full weight of the FDA, CDC, The US Department of Agriculture and others into the regulatory mix. However, it is equally possible, and in the most extreme case, that the FDA could insist that the industry take a hiatus until research is available and standards are established, like ones that exist in other industries, to assure consumer safety. At a bare minimum, would the FDA allow for marijuana to be referred to as “Medical Marijuana” or state regulatory bodies to have medical marijuana programs when medicine, according totheir definition must go through the expensive and time consuming clinical trial process, therebyopening the door wide for Big Pharma to step into the game aggressively?

It might also usher the DEA back into the state regulated game to raid anyone selling product not authorized federally.

Anyone that has followed the industry is aware of the limitations prohibition has placed on the emerging industry.

It is logical to call for federal legalization so that all of the power of the US government and its research and oversight departments can bring their knowledge base to the table to protect the cannabis consuming public. Furthermore, federal legalization will surely free-up resources to remove the DEA roadblock to research all of the possible formulations that consumers can benefit from cannabis

All of these issues are inevitable, either way, as evidenced by the tension that exists between state and federal law. Our friends up north got it right having their regulated marijuana system controlled federally. But the Canadians have also faced the stark reality of the threat the black market poses to their nascent cannabis industry as well. And, they are also starting to see evidence of their own Vaping Crisis.

As part of a federal and state coordinated effort to protect the consuming public, standards need to be established that seamlessly place all of the federal, state and local regulators on the same page so they can assure product safety with uniform compliance enforcement

As I mentioned in the title, this is a complicated situation and any moves made by the industry will certainly have ramifications. It would seem prudent for the industry to consider getting on the same page and at bare minimum stop selling all vape product sales until the CDC, FDA or other entities know what is causing consumers to get sick and die.

CBE spoke with Lezli Engelking, Founder of the Foundation of Cannabis Unified Standards (FOCUS), the non-profit international cannabis health and safety organization that has been working for years to establish credible standards for the Cannabis Industry for her thoughts. Here is what Lezli, a lifelong industry advocate (she was a licensed operator in Arizona before founding FOCUS) had to say.

“FOCUS has been warning about this day for 6 years.

A primary concern for the cannabis industry has always been too much regulatory oversight. While contradictory, this concern has coexisted and continued to grow over the last decade, at the same time the cannabis industry pushed states to legalize cannabis. “Self-regulation”, instead of standards, was determined to be the solution, and organizations were developed specifically to self-regulate. Yet now, in the midst of this tragic crisis, they are demanding federal oversight…

In 2016, once FOCUS standards were developed and available for use in the marketplace, FOCUS reached out to industry organizations offering to assist their members and develop working relationships to help move the industry forward.  In 2017, ASTM International became involved with developing internationally harmonized global cannabis standards. ASTM contacted all major industry organizations with invitations and encouragement to collaborate.  In both instances, the cannabis industry instead chose to work on creating their own standards to promote self-regulation.

In other regulated industries, manufacturers are held responsible for the quality and safety of their products. As such, associations in other industries ensure theirmembers bring safe products to market through the implementation of standards.

What the cannabis industry needs more than anything right now, is a unified voice. They need a single, solid, responsible voice that prioritizes the health and safety of its employees, patients, consumers, and the public – as well as the longevity, legitimacy, and sustainability of the legalized cannabis industry as a whole.”

These same national associations have been fueling the narrative that the illicit black market is the source of dangerous product that consumers should stay away from (that language has also made its way into the CDC statements to date). But what about flower product coming from quasi-legal caregivers in Maine and other states that are not regulated like licensed producer/processors that have reportedly tested positive for dangerous pesticides. Or what about the legally licensed operators who were or are still using fillers identified as potential problems like propylene glycol or vitamin E acetate?

The industry knows that there are still legally regulated players using fillers that may be responsible for the illness including the delivery systems in question, the large majority of which are manufactured overseas in China.

Industry leader, Andy Williams, CEO of Medicine Man Technologies and founding board member of Cannabis Trade Federation, recently declared, “Medicine Man has halted sales of all vape products that contain the chemical additives propylene glycol or vitamin E acetate and discarded its entire inventory of those products.”  That’s industry leadership in very visible action.

On the ancillary business side, Gofire CEO Peter Calfee this week said, “As we wait for conclusive results from the ongoing medical investigations, one thing is abundantly clear: There is no use for dangerous additives in any vaporization products. While other contributing factors to this terrible illness may be uncovered, it is plainly irresponsible for the industry to continue the use of additives that we know can be harmful and are unnecessary. We know this about additives right now. The time to stop using them is right now.”

“As responsible corporate citizens, and conscientious human beings, we cannot sit on our hands and wait for this to play out, hoping not to be implicated,” he said. “The time for this industry to lead has arrived. By inaction, we are all implicated. While many in the industry are stepping up on this issue, we’re calling on everyone to follow this lead by refusing to use additives in products, and to identify other ways to improve safety measures in products.”

In addition to ending the use of additives, Gofire is calling for the industry to take other actions that fortify patient health and elevate the industry, including:

  • Research and insist on quality: Do the hard work of finding better ways to deliver plant-based medicine. This is not easy or inexpensive. But critical research and development must be concluded prior to any product reaching consumers to ensure safety. Presume customers and patients are willing to pay a little extra to ensure their health and safety. 
     
  • Hold each other accountable: Seek out, and then call out, the practices that create the health hazards posed by questionable oils and hardware. Don’t sell inferior product on retail shelves. Don’t use cheap materials or cutting agents in manufacturing processes. Find the right hardware that can match the quality of product.

Brian Kessler CEO of SBL Venture Capital, who has been active in the legal Cannabis industry for the last 7 years, is encouraging the “Industry’ to fund its own independent research. “If stakeholders on all sides, manufacturers, distributors and retailers can come together to get a good understanding of what the actual issues are then we have a fighting chance to help navigate the final directives. Right now flying around the industry and the media are mostly innuendos and conjecture. Let’s take collective steps to get solid research and make good decisions based on science and facts. This will help us in discussions with the FDA, CPS and any other regulatory bodies that might need guidance and direction on legal cannabis.” 

CBE caught up with contributor John A. MacKay, Ph.D., Founder, CEO, Synergistic Technologies Associates, who we have known since we began covering the Cannabis Industry. MacKay, one of the industry’s leading extraction experts after years with NYSE traded Waters Corp., has worked with hundreds if not thousands of cannabis licensees since the regulated industry launched and has had trepidation over the vape formulations being brought to market for years. We asked him, “What are your thoughts about the current news about the sicknesses and deaths that are from vaping and how would you advise the cannabis organizations?”

Mackay told CBE, “This is a time to advocate for solutions and fund the research into the materials these people have ingested and how, as well as the viability of any testing with modern equipment to find out what is in the starting material as well what happens through the processes of inhalation.  This will allow a more fact-based solution to consider moving forward.” He went on, “I have not personally seen any of the data that is being analyzed on the patients or other materials that have been collected.  With all of the vague and conflicting news I have read and listened to, I do know that the chemistry of compounds that can be eaten is not the same as the ones that can be taken into the human body by inhalation. Remember that water is GRAS (Generally Recognized ASafe), but should not be taken into the lung cavities.”.

CBE believes that promises made by politicians to use tax revenues generated by new cannabis regulated programs in their states for purposes other than regulation (and in some cases, laws that commit those revenues to public projects) hamper a state’s abilities to have robust compliance and enforcement programs. Many of the state cannabis regulatory programs are under-funded, understaffed and definitely challenged institutionally with such a limited knowledge base available and limited financial resources to recruit, compensate and employ enough qualified individuals to oversee and enforce their regulatory requirements. And personnel turnover continues to be a key challenge that many faced.

There has been a large number of media inaccuracies that have taken place over the last several months regarding the Vaping Crisis as Kessler rightly points out. Leafly published a piece titled, “How mainstream media botched the vape lung story” this past week. I agree with many of the points author David Bienenstock makes, but I question the source. Leafly is wholly owned by Privateer Holdings, a private equity firm focused on the emerging legal cannabis industry and the lead investor in building Tilray Inc. into one of the dominant Canadian and worldwide cannabis operators. And as the author points out, the word “tainted” is omitted when referring to THC repeatedly. One of the common threads cited by CDC and the FDA during the investigation into Vaping Crisis injuries and deaths is products that include THC, whether we call them tainted or not or whether we cite the equipment being used to heat the oils. So much for the nitpicking.

A couple of weeks ago, CBE published an article by contributor Ian Stewart from Wilson Elsver alerting our readers to the first product liability suit (filed in Washington) related to the vaping crisis. It’s imperative that the industry recognizes a very simple truth. It is not financially feasible for insurers to provide product liability coverage to legal operators or delivery system manufacturer’s or anyone else associated with the cannabis industry if they have to pay out more than the premiums they have collected. 

We all know you can’t register a car without insurance, so how can you run a consumer package good company without liability insurance?  As a result of the Vaping Crisis, premiums are sure to skyrocket and impact the entire industry.  It’s important to note that 95% plus percent of licensed cannabis businesses are small businesses; how can they survive the storm if they are hit with product liability suits without the necessary insurance to cover revenue losses and legal costs? And sadly, many of them will suffer financially in the short term if they place consumer safety first during this crisis.

As I have stated, my thoughts here are motivated by a desire to identify the issues that the cannabis industry must collectively come together to address. CBE strongly supports the movement to have a federally regulated industry if we want to succeed. Over the last 5 years, I have met hundreds of hard-working, dedicated licensed and regulated professionals that are committed to bringing the benefits that the cannabis plant offers to consumers worldwide. Sure, these Cannabis Industry professionals are in the game to make a profit and greed plays a role in any capitalist venture. But I strongly believe that all of the industry’s constituents don’t want to see one more person injured or die due to dangerous product getting into the hands of adults (and inevitably minors) who are going to find a way to consume the plant in its many forms.

The Cannabis Industry brand is rightfully under siege because cannabis products being consumed, whether sold by regulated or illicit market operators, are killing people and making many ill. CBE believes that it is time for the regulated Cannabis Industry to do the right thing and stop selling products that may or may not be causing the damage and for all constituents and the organizations that represent them to move quickly to get on the same page before the brand and public trust is damaged permanently.

CBE urges industry associations and advocacy organizations to stop competing with one another and to rally together so that all Cannabis Industry constituents, whether public or private, can create a trusted brand and industry whose products can be safely consumed by all adults. The industry will eventually get what it wishes for and deserves, federal descheduling and legalization, the population currently supports this.

But if the legal industry doesn’t unite quickly, federal and state regulators will eventually (and in some cases already have) impose the most stringent and oppressive policies available to them, the shuttering of all licensed operations in the US and the failure of thousands of businesses and the corresponding shift back to the dark days of the black market. That would be a disaster.

And I suspect, the prohibitionist who have contributed to the formation of an industry in the US that has a state-based regulatory environment (and the corresponding conflict with federal law) are privately embracing the crisis at the expense of those who have died from cannabis product use.

The solution to the Vape Crisis is complicated, possibly fatal to the industry and its many hard-working professionals. CBE encourages The Cannabis Industry to do the right thing and get together to formulate a cohesive strategy and plan to protect consumers now before it’s too late.

That said, the need for the industry to be proactive and publicly take leadership begs the question, “where to turn?”. And if the industry can’t present a unified front with credible leadership, will the industry void turn this into a fatal event for the industry itself?



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