Heard this from @Reece!
In September 2017, Lee conducted an “independent lab test” on the Candy Apple line at Steep Hill Labs and received a report that claimed the product had “detectable amounts of pesticides including Bifenazate, Etoxazole, Myclobutanil and Trifloxystrobin,” the 22-page complaint states.
That’s awful – sounds like whatever grow Xzibit was using was really bad at their job.
This brings up the question of liability and who is at fault. If Xzibit received lab tested and approved products, would he be at fault for advertising this end product to his fan base? The article did not mention the exact lab results, but if the lab results were falsified and misrepresented to the end client, then it could be argued that the liability falls onto the producer, processor and lab that tested this end product. And not so much on Xzibit himself. Who do you think is at fault here?
I hope nobody has to face a suit like this without Product Liability Insurance. It is excluded General Liability coverage where Cannabis is involved. If you don’t know for sure if you have this kind of insurance coverage, you probably don’t.
I would be happy to answer questions about Product Liability Insurance for the Cannabis Industry.
Reece hi,I would like to team up with underwriters here in southern Africa Nd offer cannabis assurance with your assistance,please could you direct message so that we can talk +27 787973119
Washington
It seems that claims against product liability for the oil and cartridges themselves as well as a professional liability claim against Alvin Nathaniel Joiner AKA Xzibit. I have both types of policies for the business and would love to answer anyone’s questions about why it is important to insure your canna-business so you do not end up like Brass Knuckles.
Hi Washington,
We are currently putting together insurance programs in North America (USA and Canada), we would be happy to assist you with your needs is South Africa. Pleas let us know!
-Dave
Nick,
This all has to be sorted out in court, where rules of evidence come into play. Was it a bad test? Was a non-representative sample sent to the testing company? Were either Xzibit or Brass Knuckles aware of any of the contamination problems? The legal expenses will be high. Another reason to check your policy to see if you have products liability.
R
Wha? No bueno! smh Xzibit 
I am not an expert when it comes to cannabis testig and destruction, BUT I DO KNOW THAT THERE ARE EXTENSIVE REGULATIONS ALREADY ISSUED for California agencies, and at this point, the discussion really should not be speculation off the top of anyone’s head. Where we have rules and regulations that should be the starting point for the discussion. So I am going to contribute what i am aware of to the conversation.
Let’s focus on what would happen in a situation like this in California…high level from the Emergency Regulations
The following sections of the Readopted Emergency Regulations are pertinent:
§ 5304. Testing Arrangements
After taking physical possession of a cannabis goods batch, the distributor shall contact a testing laboratory and arrange for a laboratory employee to come to the distributor’s licensed premises to select a representative sample for laboratory testing.§ 5305. Testing Sample
(a) The distributor shall ensure that the batch size from which the sample is taken meets the requirements of this division.
(b) A distributor or an employee of the distributor shall be physically present to observe the laboratory employee obtain the sample of cannabis goods for testing and shall ensure that the increments are taken from throughout the batch.
(c) The sampling shall be video recorded with the batch number stated at the beginning of the video and a visible time and date indication on the video recording footage. The video recordings shall be maintained for 180 days.
(d) After the sample has been selected, both the distributor and the laboratory employee shall sign and date the chain of custody form pursuant to section 5709 of this division, attesting to the sample selection having occurred.
(e) A distributor shall not assist the laboratory employee nor touch the cannabis goods or the sampling equipment while the laboratory employee is obtaining the sample.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26104 and 26110, Business and Professions Code.
§ 5306. Laboratory Testing Results
(a) A sample “passes” a laboratory test when the sample meets specifications in chapter 6 of this division.
(b) When a batch from a manufactured or harvest batch passes, the cannabis goods may be transported to one or more retailers.
(c) A sample “fails” a laboratory test when the sample does not meet specifications in chapter 6 of this division.
(d) If a failed sample was collected from a batch and the batch could be remediated pursuant to section 5727 of this division, a distributor may transport or arrange for the transportation of the batch to a cultivator or manufacturer for remediation.
(e) A distributor shall destroy a batch that failed laboratory testing and cannot be remediated pursuant to section 5727 of this division.§ 5307. Quality-Assurance Review
When a distributor receives a certificate of analysis stating that the sample meets specifications required by law, the distributor shall ensure the following before transporting the cannabis goods to one or more retailers(a) The certificate of analysis the distributor received from the testing laboratory is the certificate of analysis that corresponds to the batch;
(b) The label on the cannabis goods is consistent with the certificate of analysis regarding cannabinoid content and contaminants required to be listed by law;
(c) The packaging complies with applicable packaging laws including, but not limited to, Business and Professions Code section 26120. Cannabis goods are not required to be labeled or otherwise identified as medicinal products prior to retail sale unless the cannabis goods must be labeled as such pursuant to the requirements prescribed by the State Department of Public Health in regulation;
(d) The packaging is tamper-evident. “Tamper-evident” means a one-time-use seal is affixed to the opening of the package, allowing a person to recognize whether or not the package has been opened;
(e) The weight or count of the cannabis batch comports with that in the track and trace system. A distributor shall use scales as required by the Act; and
(f) All events prior to receipt have been entered into the track and trace system.§ 5308. Insurance Requirements
(a) An applicant for a distributor license shall provide the Bureau with a certificate of insurance that shows the types of insurance coverage and minimum amounts that have been secured as required by this section, and documentation establishing compliance with subsection (d) of this section.
(b) A distributor licensee shall at all times carry and maintain commercial general liability insurance in the aggregate in an amount no less than $2,000,000 and in an amount no less than
$1,000,000 for each loss.
(c) A distributor licensee shall maintain the insurance required in subsection (b) from an insurance company that is:
(1) A non-admitted insurer that meets the requirements of Insurance Code section 1765.1 or 1765.2, and the insurance is placed pursuant to Insurance Code section 1763 and through a surplus line broker licensed under Insurance Code section 1765;
(2) An insurer qualified to do business in California by the Secretary of State and authorized by the Insurance Commissioner to write the liability and property classes of insurance as defined by Insurance Code sections 102, 103, 107, 114, 108, and 120; or
(3) A registered risk retention group compliant with the California Risk Retention Act of 1991. (See California Insurance Code sections 125-140.)
| (d) | Admitted insurers and risk retention groups must show proof of capitalization in the amount of at least $10,000,000. |
|---|---|
| (e) | A distributor licensee shall notify the Bureau in writing within 10 calendar days of a lapse in insurance. |
The following is an excellent article on lab testing - CA Bureau of Cannabis Control Emergency Regulations Impact Chemical Analysis and the Lab
You may also want to read - 5 Signs That Weed is Potentially Contaminated
Finally, the California Bureau of Pesticide Regulation has a page on cannabis located here.
Thank you for sharing your experience Michael, it really puts everything into perspective.
Jordan, once again dropping in with the much needed facts. Thanks for contributing to the conversation! I have awarded you the Community Leaders badge, for continuously leading our community in the right direction. Thank you for your support!
Thank you…all I am doing is what I do every day. Each of us has our own experience and skills and sharing them keeps them sharp.
