Cannacurio #91: Diving into violations and recalls in the cannabis industry

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Cannabiz Media has been tracking licensing violations and product safety recalls through its market intelligence platform for nearly a decade. With years of industry data at our disposal, our research team recently attempted to organize and categorize compliance data into a cohesive, easy-to-understand tool: a Violations and Recalls Dashboard.

Our research team has examined nearly 6,500 licensing violations to date and, with input from industry stakeholders, developed a taxonomy to label each violation with one or more labels:

• Security
• inventory
• Checkout
• Operations
• records
• Packaging
• Selling to minors

As our team examined the rules and violations identified in each state, some common trends emerged:

• Track and trace compliance issues were commonly encountered –inventory accounts for almost 10% of the violations in the database.
• In addition to track and trace issues Security And Checkout Violations also accounted for almost 10% of all violations.

• Security This broadly includes the use of cameras, other surveillance systems and employee ID cards.
• Checkout Violations include, for example, non-compliance with advertising restrictions as well as daily and monthly purchase (quantity) limits being exceeded and the sale of cannabis on credit.
• States have different rules regarding advertising and what can be marketed, both inside and outside of the pharmacy. Additionally, violations of purchase limits, either per transaction or per month, were common, while this was more common with medical programs. These were common Checkout Violations identified.

• The biggest type of violation is OperationsThis includes, for example, operating outside the approved scope of the approved license, unauthorized/unlabeled plants and the use of equipment not approved for cannabis production. They account for around a quarter of all violations.
• Selling to minors They account for less than 5% of breaches nationwide, but are one of the most common causes of concern among regulators, lawmakers and law enforcement. Given this importance IIndustry representatives recommended that we create a separate category for sales to minors, as this is a clear part of the FINCEN guidelines.

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Some particularly serious or detailed violations fall into many categories. We have carefully reviewed and manually classified every license violation in our database to ensure that each one fits into one of the categories above. Some regulatory data could not be classified.

The situation is different when it comes to recalls of cannabis products. Compared to violations, there have been far fewer in the last decade. We recorded nearly 200 recalls in seven categories.

As shown in the table, pesticide recalls are the leading problem nationwide, accounting for approximately one-third of all product recalls. Mycological contaminants are second, with a number of new Aspergillus problems emerging across the country. Some states have problems with organic and inorganic contaminants, unlicensed/non-government products, and also untested products.

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Looking at the rankings, the top states for recalls include long-established adult-use markets, with one exception: Ohio. Ohio regulators have issued fifteen recalls since the medical cannabis program began, and licensing for adult use will begin later this year ahead of the first recreational sales. Michigan's presence on the leaderboard, with nearly three dozen recalls since the introduction of medical and adult-use cannabis licensing several years ago, is not shocking. The state has been the scene of several cannabis testing scandals, including a major recall of over 64,000 pounds of product valued at nearly $230 million; in which a legal dispute took place for almost two years.

Between the violations and recalls dashboards, these new visualizations will help expand users' understanding of compliance issues while uncovering potential sales leads. Views illustrating violations at the state and license level can help highlight statewide and national market trends and concerns. Users can focus their search by state or year for deeper insight. Additionally, a license leaderboard displays violations and recalls at the license level, and rollup fields summarize violations by category per license. Dashboard users can filter recall data specifically by status, date and type to refine their analysis and identify compliance issues, issues and markets based on their own focus and search parameters.

This exciting new enhancement will help Cannabiz Media users better understand the current regulatory and compliance challenges facing license holders, while providing the opportunity to reach new customers with potential solutions to significant operational challenges. The Violations and Recalls dashboard complements other recently released visualizations including Trade union and industrial peace agreementsAnd Social Justice Licensing.

Cannabiz Media customers can stay up to date on these and other new licenses through our newsletter, alerts and reporting modules. Subscribe to our newsletter to receive these weekly reports straight to your inbox. Or you can schedule a demo to get more information about how you can access the Cannabis Market Intelligence Platform yourself and dive deeper into this data.

Cannacurio is a Cannabiz Media column featuring insights from the most comprehensive cannabis market intelligence platform. Check out Cannacurio posts and podcasts for the latest updates and information.