[Special thanks for this guest blog from Wendel Rosen attorney Wendy Manley.]

Those on the forefront of the burgeoning cannabis industry are a bold lot, striking out into the frontier of new, shifting and unanticipated regulations. While these pioneers may have know-how in cultivating, developing and marketing new cannabis products, they likely never imagined the tangle of regulations they would need to manage. Perhaps chief amongst those is the Safe Drinking Water and Toxic Enforcement Act, more commonly known as Proposition 65, or “Prop 65.” Prop 65 is the law behind that sign you’ve seen for more than 30 years in California warning that some thing or place may contain chemicals known to the state to cause cancer or reproductive harm. Many cannabis products, as it turns out, are subject to Prop 65.

Prop 65 requires businesses to provide a warning to Californians of potential exposure to a chemical on the State’s Prop 65 list. Failing to do so leaves a business vulnerable to expensive enforcement action, most of which occurs at the hands of an aggressive citizen contingent (plaintiff’s attorneys) rather than by the state or an agency. While the responsibility for providing the warning rests primarily with the manufacturer, every party in the chain of commerce is potentially liable, including unsuspecting retailers.

Any cannabis business needs to consider whether any listed chemicals in their products could cause an exposure and trigger the warning requirement. Chemicals listed by the state number well over 900, and “marijuana smoke,” not surprisingly, is one of them. As with other consumable products (most notably food), there is a potential for exposure to listed pesticides and metals. A number of cannabis edibles have been stung for cadmium and lead, which appear to have originated in chocolate ingredients. In addition to cannabis products themselves, paraphernalia used for smoking cannabis should also be labeled for exposure to cannabis smoke and possibly other chemicals. More generally, various pthalates and metals such as lead and cadmium seem to be showing up in a vast array of products.

Prop 65 warnings must be “clear and reasonable,” a subjective standard if ever there was one. Fortunately, the regulations provide some specifics for both warning content and the method for transmitting the warning. A warning in conformance with the regulations is deemed “clear and reasonable.”

But – the warning regulations have recently changed, leaving some who previously complied now exposed to litigation. The warning must now state a product “can expose you to chemicals” rather than simply that it “contains chemicals.” It also must name at least one listed chemical for each endpoint (cancer or reproductive toxicity), which requires closer examination of the potential chemicals. The regulations now require a reference to the new Prop 65 webpage and sharply restrict additional information in the warning.

In addition to the specific wording, the regulations include parameters for the appearance of the warning, which vary depending on the product or circumstances. Food warnings, for example, need to be placed in a box, while non-food warnings require a yellow triangle symbol enclosing an exclamation point. Signs posted in designated smoking areas must be 8.5 x 11 inches and contain the warning in 22-point type within a box. And Internet warnings must be provided before purchase. As these examples illustrate, there are a lot of details, and the devil is definitely in those details.

While applying the regulations can be a tedious and nuanced process, those who have weathered the cost and turmoil of an enforcement action understand the risk of taking the matter lightly. The cost of resolving a citizen suit is significant under the best of circumstances. Even if a matter is settled without litigation, defendants must pay the attorneys’ fees of their accusers in addition to penalties, and so typically face paying tens of thousands of dollars without ever mounting a serious defense.

The new warning regulations took effect August 31, 2018. It is high time for everyone in and out of the cannabis industry to carefully review their compliance with Prop 65, and consider getting help with interpreting the regulations for their particular circumstances.

My favorite Megan Mullally quote, and there are many, is her ode to coffee: “I’ll quit coffee. It won’t be easy drinking my Bailey’s straight, but I’ll get used to it. It’ll still be the best part of waking up.”

Wendel Rosen attorney, Wendy Manley, recently wrote about the new labeling requirements for coffee. As she noted, a California court recently determined that coffee must bear a warning under the state’s Safe Drinking Water and Toxic Enforcement Act (aka “Prop 65”) regarding acrylamide, a carcinogen found in low levels in coffee due to the roasting and/or brewing process. As it turns out, things may not be so dire after all, and coffee lovers may soon raise a mug to celebrate California regulators.

On Friday, June 15, the Office of Environmental Health Hazard Assessment (OEHHA) proposed to add a new section of the California Code of Regulation, stating that no significant risk of cancer is presented by drinking coffee. OEHHA is the lead state agency that implements Prop 65 and has the authority to promulgate and amend regulations pertaining to it. Citing to the International Agency for Research on Cancer (IARC) in its press release, OEHHA justified its proposed regulation, in part, on the IARC’s conclusion that drinking coffee does not present a significant risk of cancer. Thus, while acrylamide is designated as a probable human carcinogen, a cup of joe is not considered to be, according to IARC research.

This conclusion isn’t surprising to the coffee industry. In 2016, the cancer agency of the World Health Organization removed coffee from its “possible carcinogen” list, and there have been numerous published studies touting the potential health benefits of drinking coffee over the years.

OEHHA maintains that its proposed regulation will benefit “the health and welfare of California residents by helping to avoid cancer warnings for chemicals in coffee that do not pose a significant cancer risk.” One can’t help but wonder, though, if this regulatory about face is intended to benefit Prop 65, too. As reported in Law360 (a subscription is required), a bipartisan group of members of the U.S. Senate and the U.S. House of Representatives may be looking to undermine labeling requirements on the federal, state and local levels, and in particular, Prop 65, by requiring that labels clearly identify potential cancer risks of products based on the “best available science.”

The proposed legislation, H.R. 6022 and S. 3019, would require labeling warnings that are supported by science that is based upon objective scientific practices, which includes findings and data that are reliable and peer reviewed when possible. According to Rep. Adam Kinzinger (R-Ill.), the proposed federal legislation is intended to counter state laws that may cause some products to be “incorrectly labeled with warnings about harms that do not exist.”

To be sure, the fight over coffee and the scope of Prop 65 will not end soon. Public comment on the proposed regulation will be open until August 30, 2018, likely fielding comments for and against the regulation. Should OEHHA’s proposed regulatory change pass, it is also likely that it would be challenged in court. And, given the detractors of Prop 65 both in and outside of California, a challenge to OEHHA’s proposal may be the least concern. Congress rarely agrees on much these days, but they definitely seem jittery over the recent efforts to regulate their morning cup. So, we’ll continue to monitor this potential food fight and keep you posted.  For now, just “sip” back and relax.

[This post was written by Wendel Rosen environmental attorney Wendy Manley.]

Coffee drinkers were pleasantly surprised recently to learn their daily beverage may afford a number of health benefits. The beverage contains antioxidants and nutrients, and may protect against Type 2 diabetes, Parkinson’s, Alzheimer’s and liver cancer. Make that a double latte, please.

            NEWS FLASH:

Warning: coffee contains acrylamide, a chemical known by the State of California to cause cancer.

What just happened?

In short, after eight years of litigation, a California court determined that coffee must bear a warning under the state’s Safe Drinking Water and Toxic Enforcement Act, otherwise known as Proposition 65 or “Prop 65.”

Prop 65 was enacted by voters in 1986 with the objective of eliminating toxic chemicals in consumer products by requiring a warning before exposing a person in California to a chemical listed by the State as causing cancer or reproductive toxicity. If your product contains a listed chemical, it may need a Prop 65 Warning.

While there have been some success stories – trichloroethylene out of correction fluid and lead out of wine bottle caps, jewelry, brass faucets, calcium supplements and ceramic ware, for example – Prop 65 has spawned a cottage industry of citizen enforcers, some of which seek to safeguard human health, others of which are motivated by the reward of penalties and attorney fees.

There are more than 900 chemicals on the Prop 65 List that cause cancer or reproductive toxicity or both. In a few cases, the state has set a “safe harbor” level below which no warning is required. Plaintiffs can initiate an enforcement suit based on a lab test showing the presence of a listed chemical, and the burden falls to the defendant to prove the exposure poses “no significant risk,” which is one excess case of cancer in an exposed population of 100,000 assuming a 70 year lifetime of exposure at that level. The risk assessment needed to establish the no significant risk level (NSRL) is complicated, expensive, and vulnerable to attack in a courtroom. Consequently, the vast majority of cases are settled regardless of the merits of the claim.

Acrylamide was added to the Proposition 65 list in 1990, but not discovered in food until 2002. Since that time, more than 650 Prop 65 claims have been brought for failure to warn about acrylamide in a wide range of food products, including french fries, potato chips, sweet potato chips, vegetable chips, hash browns, bread, bagels, English muffins, breakfast cereals, granola bars, animal crackers, ginger snap cookies, molasses, toasted almonds, black olives, and coffee.

A listed chemical is often times present as an ingredient or contaminant. In many cases, such as lead or cadmium in chocolate or seaweed, it is naturally occurring, and exempt from the Prop 65 warning. Acrylamide is unusual in that it is neither added to coffee nor does it occur naturally – it is created during roasting. Cooking at high temperatures, including frying, roasting and baking, transforms sugars and the amino acid asparagine into acrylamide through the Maillard reaction. Consequently, acrylamide is unavoidable in conventional coffee roasting techniques.

Back to the coffee case. In Council for Education and Research on Toxics v. Starbucks, defendants first argued and lost several defenses based on the NSRL, First Amendment and preemption by federal law. In the second phase of the trial, which concluded in January 2018, defendants argued a rarely utilized defense involving an Alternative Significant Risk Level (ASRL) based on considerations of public health. The regulations provide that “where chemicals in food are produced by cooking necessary to render food palatable or to avoid microbiological contamination,” considerations of public health allow for an ASRL.

The Coffee defendants’ risk assessment calculated an ASRL of 19 micrograms per day, which was an order of magnitude higher than the State’s established NSRL of 0.2 micrograms per day.

To their disappointment, the coffee producers failed to persuade the judge that the ASRL should apply. The court found their expert’s quantitative risk assessment deficient, analytical chemistry methods unacceptable, evidence of health benefits unpersuasive, and the minimum quantity of acrylamide necessary to render the coffee palatable unsubstantiated, among other things. In their objections to the proposed Order, the defendants took issue with a number of the court’s findings and regulatory interpretations. Although the plaintiff immediately filed a motion for permanent injunction, it is widely expected that some or all of the defendants, which total 91, will appeal.

Just as Yogi Berra famously said, it ain’t over till it’s over. If the case is appealed, it will likely be quite some time before we know whether a Prop 65 warning is required for acrylamide in coffee. If a warning is ultimately required, specific warning language may be developed for coffee. Meanwhile, high doses of acrylamide administered to rodents suggests acrylamide may cause cancer in humans, but questions still remain whether one can even drink enough coffee to raise the risk or whether the health benefits more than offset the potential risks.

Food producers investigating acrylamide in their products need to think more broadly, since furfural alcohol is also a Prop 65 chemical generated from the Malliard reaction during cooking. And the Prop 65 plaintiff’s bar knows about it.