Cannabis Beverage Companies Need to be Aware of PFAS in Local Water Supplies

Ethan Feldman

Imagine that a cannabis beverage manufacturer’s plant draws water from a public watershed that is contaminated with a synthetic chemical or chemicals that are classified as probable human carcinogens.  Unbeknownst to the manufacturer, the advertising and labeling for their beverage products include a marketing campaign focused around the phrases “organic” or “all natural.”  This scenario is more than a hypothetical.  Synthetic compounds known as per- and polyfluoroalkyl substances (PFAS) are found in public water supplies across the United States.  There are about 15,000 different chemical compounds that fall under the PFAS umbrella.  The International Agency for Research on Cancer (IARC) has classified certain of these chemicals carcinogenic, as well as possibly carcinogenic to humans.

PFAS are commonly known as ‘forever chemicals’ because of the time it takes for them to degrade.  Not only have PFAS been linked to cancer, but also to immunodeficiencies, reproductive harm, and developmental defects in children.

According to the Centers for Disease Control, exposure to PFAS can occur from eating food packaged in PFAS-containing material, eating food grown or raised near places that used or made PFAS, but, most significantly, from drinking water.  Here is a link to PFAS contamination sites in the United State as of November 28, 2023, and it is estimated that drinking water for 26 million U.S. citizens may be contaminated with PFAS.

PFAS litigation is on the rise.  The past few years have seen many lawsuits filed by attorneys general and private citizens against PFAS manufacturers stemming from public water supply contamination.  Additionally, over the past few years, the Environmental Protection Agency (EPA) has worked to establish uniform permissible PFAS levels as it pertains to public water supplies.

In 2018, the cannabis beverage market was valued at over $900 million, and is projected to grow by 17% until 2033.  The emulsification process used to create cannabis infused beverages involves creating water-soluble cannabinoids that are then mixed into water-based solutions, and the final product can appear in the form of a soda, sparkling water, or juice, to name a few.

The EPA, state and local governments, and plaintiffs’ attorneys are keeping a close eye on the evolution of PFAS, and additional litigation is almost certain.  The scenario presented above may potentially lead to not only personal injury claims, but also presents a classic situation on which consumer fraud class actions are based.

Cannabis beverage manufacturers must be vigilant in complying with not only state regulations pertaining to cannabis manufacturing, but also must be mindful to appropriately handle PFAS contaminated water the company uses to manufacture cannabis beverages.

FDA Warning Letter Targets Delta-8 THC

Seth Goldberg
Seth A. Goldberg

On December 5, 2023, FDA issued a warning letter to a manufacturer (Hemp XR) of food products, such as gummies, cookies, etc., that contain delta-8 THC.  The warning letter notes that delta-8 THC has not been generally recognized  as safe (GRAS) for use in food, and has not received pre-market approval to be used as a food ingredient, which requires data demonstrating safety.  As a result, FDA warns that the interstate marketing of the food products at issue violates the Food, Drugs and Cosmetics Act.  The warning letter makes similar assertions with respect to the manufacturer’s food products containing CBD. 

FDA notes that its concerns with respect to delta-8 THC include:  “1) Delta-8 THC products have not been evaluated or approved by FDA for safe use and may be marketed in ways that put the public health at risk; 2) FDA has received adverse event reports involving Delta-8 THC containing products; 3) Delta-8 THC has psychoactive and intoxicating effects; 4) FDA is concerned about the processes used to create the concentrations of Delta-8 THC claimed in the marketplace; and 5) FDA is concerned about Delta-8 THC products that may be consumed by children, as some packaging and labeling may appeal to children.”

As I have previously written, manufacturers of products containing delta-8 THC are exploiting an ambiguity in the definition of hemp under the 2018 Farm Bill that they assert legalized chemical substances converted from hemp cannabinoids through chemical processes on the notion that such substances were “derived” from hemp.      

Class Certification For Wage & Hour Claims Against Cannabis Dispensaries Granted by California State Court

A California Superior Court recently granted class certification relative to a class of hundreds of employees against a group of dispensary defendants where the Plaintiffs presented sufficient evidence that the off-the-clock work claims, meal and rest period claims, and reimbursement of necessary business expenses claims predominated over individual inquiries and were typical of the class.  The Court did not rule on the merits of the integrated enterprise, alter ego, or joint employer arguments, nor did the Court agree with the Defendant’s arguments that the claims were not typical because the Plaintiffs were not employed by each Defendant. Nonetheless, the ruling is important for employers in general and cannabis dispensaries in particular.

To read the full text of this article by Seth A. Goldberg and Nick Baltaxe, please visit the Duane  Morris Class Action Defense Blog.

Prepare Workplace Policies for Legalized Cannabis

Kathryn Brown authored the article “Prepare Workplace Policies for Legalized Cannabis,” which was published in the Legal Connections section of Columbus Business First.

On November 7, 2023, Ohio made history when a majority of voters approved Issue 2, a proposed law to control and regulate cannabis for Ohioans 21 and older. In so doing, Ohio became the 24th state to legalize cannabis for adult use without a medical card. Read the full article.

Another Lawsuit Challenging State Regulation of Hemp Synthesized Intoxicants

Seth Goldberg
Seth A. Goldberg

Another lawsuit challenging state regulations that attempt to curb the use of hemp-synthesized intoxicants (HSI) in consumer products was commenced last week.

In a complaint filed in federal court in Alaska on November 2, 2023, AK Industrial Hemp Assoc. et al. v. Alaska Department of Natural Resources, et al, the plaintiffs challenge the constitutionality of Alaska regulations that prohibit the sale in Alakska of hemp products for human consumption that contain delta-9 THC or synthetic cannabidiol.

There are now more than half a dozen lawsuits challenging state regulations that target HSIs, which further demonstrates the need for Congress to make clarifying changes to the definition of hemp in the 2023/24 Farm Bill to correct the loophole that has resulted in the proliferation of these intoxicating and potentially unsafe substances.

On November 17 at 12:00 eastern, Duane Morris will be hosting a webinar about the “loophole” in the definition of hemp in the 2018 Farm Bill that has led to the proliferation of HSIs, including the science behind HSIs; litigation challenging state regulation of HSIs; and the 2023/24 Farm Bill and HSI policy. 

Labor Peace Agreement Mandate Challenged in Federal Court

States legalizing cannabis are increasingly requiring that cannabis licensees enter agreements allowing unions access to their employees for organization activities.  Some states go even further, not only requiring a labor peace agreement (LPA), but that employees agree on the terms of a collective bargaining agreement (CBA) soon after licensure.  As we previously reported, such requirements are especially prevalent along the East Coast, with varying labor requirements imposed by New York, New Jersey, Virginia, Delaware, and Connecticut, as well as California. Continue reading “Labor Peace Agreement Mandate Challenged in Federal Court”

Bankruptcy Court Sides With Cannabis Business (Twice) in Reorg Plan

Lawrence Kotler and Ryan Spengler authored The Legal Intelligencer article, “Bankruptcy Court Sides With Cannabis Business (Twice) in Reorg Plan.”

“In contrast with a majority of bankruptcy courts that routinely dismiss cannabis-related cases for perceived violations of the Controlled Substances Act (CSA), the U.S. Bankruptcy Court for the Central District of California in the recent opinion In re Hacienda, No. 2:22-BK-15163-NB, (Bankr. C.D. Cal. July 11, 2023), refused to conform to the same historical standard. Instead, the Bankruptcy Court struck down the U.S. trustee’s motion to dismiss not once but twice in favor of confirming a marijuana business’ Chapter 11 plan of reorganization.”

Read the full article.

Why Hemp-Synthesized Intoxicants Need Uniform Regs

Dylan Anderson and Seth Goldberg authored the Law360 article “Why Hemp-Synthesized Intoxicants Need Uniform Regs.”

They write, “The next time you find yourself at a gas station loading up for a road trip on your snack or energy drink of choice, you may notice a surprising offering at the counter: products made from cannabis that have an intoxicating effect, but that are not governed under a state’s recreational or medical marijuana laws and regulations.” Read the full article.

Virginia’s Restriction of Hemp Synthesized Intoxicants Upheld by Federal Court

Seth Goldberg
Seth A. Goldberg

On October 30, 2023, in Northern Virginia Hemp and Agriculture LLC, et al., v. The Commonwealth of Virginia, the U.S. District Court for the Eastern District of Virginia  refused to enjoin a Virginia statute, SB 903, aimed at curbing the production and distribution of products containing intoxicating chemical compounds derived from federally lawful hemp (“Hemp Synthesized Intoxicants” or “HSIs”).  SB 903 imposes upon hemp products,  including edibles and smokables, industrial hemp extracts, and any other consumable substance, a limit of no greater than .3% total THC concentration and no more than two milligrams of total THC per package or amount of cannabidiol that is no less than 25 times greater than the amount of total THC per package.

This restriction, referred to as a “Total THC Standard,” is intended to prevent the sale to consumers of ingestible, smokable, and otherwise consumable products that contain intoxicants derived from federally lawful hemp that are the functional equivalent of the delta-9 THC in federally unlawful marijuana. Such products have proliferated since the 2018 Farm Bill because chemical processes can be used to convert the chemicals in hemp into intoxicating compounds like delta-8 THC.

The Court in No. VA Hemp determined that the plaintiffs were unlikely to succeed on the merits of their claims because, among other things, the 2018 Farm Bill did not preempt states from regulating hemp products sold in their states.

 

 

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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