5 Liability Facts About the CBD & Hemp Industry

It is safe to say that the CBD and hemp industry are currently booming. At the end of 2018, hemp was taken off of the Schedule I substance list and products made from hemp, such as CBD oil, were permitted.  Although there has been significant deregulation, there are still unique issues to consider related to CBD and hemp industry liability that any proprietor or underwriter ought to know.

CBD & Hemp Industry Liability Considerations

First of all, although hemp has been legalized, its close cousin, marijuana has not been in all states.  Marijuana and hemp are both strains of the cannabis plant, but with very different properties.  In short, hemp is not going to get anyone high.  While certain states have legalized marijuana for medical and recreational use, they have done so in defiance of a federal ban on the substance.  So, although CBD and hemp are legal, they remain connected to a dicey legal situation that some investors are reluctant to buy into.

THC Limits

The main difference between hemp and marijuana is the concentration of the chemical THC.  This is the psychoactive ingredient that causes intoxication in marijuana.  While there are traces of it in hemp, they are far too low to have a similar effect.  CBD products are currently prohibited from having more than 0.3% THC.  Responsible producers are able to follow this rule, but a mistake would be a disaster because it would mean in legal terms that CBD dispensaries have sold an illegal drug.  The threshold for error is very low.

Overselling in the Advertisements

Another liability in the CBD and hemp industry: Advertisements.  CBD oil and related products have been over-marketed to the point that some companies have gotten in trouble.  CBD has been marketed as a cancer preventer, a cure-all for COVID-19 and the solution to Alzheimer’s disease.  These are of course preposterous, and the government has prosecuted the responsible parties.  Such oversells paint the entire industry with a scandalous brush.

Injury Liability

Because CBD and hemp are primarily used for medicinal purposes, they face the same standards and regulations that other medications do.  Because the products are ingested or placed upon the skin, the producer becomes responsible for any injury or reaction caused by their product.  And if someone were to become intoxicated through a CBD product, they could sue the company for any damages caused.

Evolving and Varied Regulations

The last difficulty for CBD and hemp businesses is the mishmash of laws and regulations across the United States.  The federal government has its laws, but each state has its own policies as well.  Some require certain health declarations, others have specific recipe laws, and navigating them all can be a hassle.  If a product is going to be sold across state lines, it needs to comply with all of these or face legal consequences.

About CannGen’s Hemp Industry Liability Expertise

For more information about our comprehensive insurance solutions for the cannabis, CBD, and hemp industries, please visit our website at www.canngenins.com or email marketing@canngenins.com.