From anxiety to depression, inflammation to pain relief, health and wellness products containing CBD and other cannabis derivatives are part of a fast-growing industry aimed at helping people and animals feel better. In fact, according to a report by Quince Market Insights, the global CBD and cannabis wellness market is expected to reach $2,740 million at the end of this year and projected to grow at a rate of 51% until 2030.
However, unlike most over-the-counter health and wellness supplements, the psychoactive effects of cannabis combined with limited regulation substantially increases the risk of product liability claims. As a result, cannabis businesses that grow, manufacture and sell these types of products need to be prepared for possible product liability issues that can happen at any point along the supply chain or point of sale.
Common cannabis-related product liability legal actions include (but aren’t limited to):
- Product Mislabeling
- Inaccurate Testing
- Defective Products
- Contaminants
- Allergic Reactions
- Unwanted Side Effects (from “one-dose-fits-all” products)
- Medical Claims (promising to diagnose, cure, treat, mitigate, or prevent specific medical conditions)
By nature, cannabis wellness products are considered high risk – an issue that is exacerbated by strict regulations from the Federal Drug Administration. Unfortunately, despite best practices and robust testing protocols, there is always the chance that a product can unknowingly harm someone or their pet, leading to legal challenges that can involve a single consumer claim or a large-scale product recall event. Having the right product liability insurance coverage can help mitigate these risks.
When shopping for product liability insurance, it’s critical to understand the different types of coverages available and what’s right for your business. If you need help determining what type of insurance your cannabis business needs, contact me, Corey Tobin, at ctobin@boltonco.com or 626-703-1556.
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