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Hey everybody, its February!! I think we can accept that January was the basically the 13th month of 2020 and move on with our lives. And speaking of moving on, we are ready to conclude our series on Proposition 65 which you can catch up on here, here and here.
It’s been a long series but it’s important that we take a closer look at these types of legislation to ensure that they are serving the purpose for which they were intended. It is also important that we ensure that the rules pertaining to specific substances or compounds are not unnecessarily or unreasonably harsh simply because, well, that’s what we do.
Unfair Treatment
In the case of cannabis, we have seen unnecessary and unreasonably harsh legislation not only at the state and federal level but at the global level as well. The legislation does not accurately reflect cannabis as a substance nor its millennia long history in the development of the human species. It has in fact destroyed countless opportunities for development in multiple sectors of industry as well as destroying countless human lives in the misguided and almost completely failed war of drugs. But that is all for our series on Reefer Madness. For right now let’s take a long last look at Prop 65.
So, as we discussed last week, the type of regulation regarding the inclusion of THC to the list of chemical compounds governed by Proposition 65, however misguided it might be, requires a framework for enforcement of the legislation in order for it to be effective.
So how will this work for Prop 65? Bounty hunters. That’s right, bounty hunters. Their targets are non-compliant companies, the tools of their trade are law-suits and the payout is potentially huge. And if people can’t see how this practice is deeply flawed then I am not sure what to say about all of that.
How Does It Work?
So, here is how it works, Prop 65 empowers “any individual or organization acting in the public interest to sue a business for violation.” But what does that mean practically? It means that any person who suspects that a company is in violation of Prop 65 can file a suit against said company.
The company is then issued a 60-day warning letter. During this period the company has the right to answer the accusation. The burden of proof, however, is on the company so they are the ones who have to disprove the claims.
In the case of THC, the defendant would be required to prove that the amount of THC in their products is non-toxic. Since this is impossible due to the fact that there is NO safe-harbor or non-toxic amount of THC that is recognized in the scientific or medical communities.
The Bounty
What do these bounty hunters have to gain? The “bounty” they are hunting for is a percentage of the payout from the target company that the bounty hunters are suing. The burden of proof is on the companies and there the potential costs for them to prove their innocence are huge. They have to run tests and studies, they have hire chemical experts to give testimony as to the safety of their products. All of these things cost money and none of them are cheap. The bounty hunters know this and they know that most companies will look to pay a settlement in order to avoid a protracted and devastatingly costly legal process.
None of this has anything to do with genuine and legitimate concern for public safety. This is basically extortion or a “shakedown” as some have put it, others have more bluntly called it blackmail. You can make your own judgement but it has been estimated that approximately 95% of the bounty hunters are in it just for the money with zero regard for public interest of safety.
The Shakedown
This is all so wrong on so many levels that it’s hard to know where to begin. Any random person can file a suit against any company claiming that the company is in violation of the Prop 65 based on nothing more than a suspicion or a feeling. Once the complaint is filed and the 60 day notice is released the company will have to invest the time and the money to actively prove its innocence in order to avoid further legal action.
At this point most companies prefer to pay an out of court settlement to stop the proceedings. The bounty hunters then typically receive 10-20% of the payout. It has been estimated that bounty hunters earned collectively 2.7 million dollars in 2019 alone. Another 24 million went to their attorneys. In short, it has become a cottage industry built on bad faith and greed.
Conclusion
So that’s what is going on with Prop 65 and it is not pretty. The cannabis industry is seen as being a cash rich industry which means that there will potentially be a lot of activity in the world of Prop 65 bounty hunting in the coming months. The thing that has become absolutely clear is that the Proposition and its enforcement are clearly broken and in dire need of fixing.
We will keep you up to date as to how things progress. But for now enjoy our fully compliant CBD products and have a great weekend.