Avoid Costly Cannabis Recalls With These Tips

Those of us working in the cannabis industry remember last year’s recall in Michigan. The cannabis recall was the largest in the state’s history, costing over 400 dispensaries nearly $200 million worth of product. 

But recalls can exact a toll beyond just lost product. In response to recalls, cannabis businesses are faced with costs related to pulling product off shelves, issuing refunds, managing public relations, and paying for possible legal fees. These immediate costs don’t take into account losses in future revenue from a damaged reputation and erosion of trust, which can be crippling for a business. 

Based on lessons learned from the 2021 Michigan recall, these are three things cannabis businesses can do to avoid costly recalls:

  • Manage the product supply chain carefully. Keep a careful eye on each step of the supply chain from growers to contract manufacturers. Even if your business maintains strict manufacturing guidelines, you can’t always count on partner suppliers and contract manufacturers to uphold the same standards.  
  • Ensure proper product testing. Contamination can happen at any point in the production and handling process. A portion of a batch may pass product testing, but that doesn’t necessarily mean the entire batch is safe. Businesses need to take preventive measures and test at different stages of production, as well as test finished products.  
  • Maintain open communication channels with the health department. Each state regulates cannabis differently. Cannabis retailers and testing labs should consider how they can work alongside their state’s health department to put reasonable guidelines in place that protect both consumers and businesses.  

Want to hear more? Read the full article at MJBizDaily. 

Despite mitigation efforts, the reality is that recalls are a risk for any industry, which is why proper insurance is key for peace of mind.  

Searching for the right coverage for your client? Jencap’s dedicated cannabis specialists are experts in the ever-evolving cannabis industry. Contact us today and take advantage of our broad market access and strong carrier relationships. 

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