Recalls and Returns for Hemp & CBD: 8 Things You Didn't Know
How to Prepare for and Prevent Product Recalls
It happens all the time in the business of consumer products. An ingredient with elevated lead levels or a simple labeling error can send your product off the shelves and back to your facilities in no time. Clients become concerned, customers are uncertain, and you’re wondering where it all went wrong. Not only does the process of recalling your product take up valuable time, it’s also an extremely costly process.
1. THE STATS
Recalling a product can cost millions, no matter the industry. According to a report by Food and Safety Magazine, the average cost of a food recall is $10 million! This is because the process of a recall involves so much more than just removal from the shelves. Notifying customers, disposal and loss of profits are just some of the monetary costs involved, not to mention the cost of a tarnished brand image.
2. HEMP AND CBD RECALLS
There are many reasons that a product may recalled, but one of the most prevalent examples in the hemp industry is the use of unapproved pesticides (along with increased THC levels). Just because certain pesticides are safe for food, does not make them safe for hemp and cannabis. Contacting your department of agriculture to know what is or is not approved to mitigate this risk. Other common recalls related to hemp and CBD include yeast and mold levels, labeling errors, mis-labeling of allergens, shelf stability and unapproved facilities.
3. REAL LIFE RECALLS IN THE CANNABIS INDUSTRY
Speaking of unapproved pesticides! Let’s talk about Eagle 20 and Myclobuntanil. These pesticides are highly carcinogenic and should not be used on hemp or cannabis (especially if it will be inhaled). The chemicals are highly combustible and can have extremely adverse effects on consumers. While the CDA (Colorado Department of Agriculture) has since banned the use of Eagle 20 on cannabis, it is essential to use approved pesticides on these plants to ensure it is safe for customers and to avoid a recall.
So how can you prevent a recall? Vet your suppliers, test ingredients, ensure approved pesticides are used, use food grade consumables and utilize track and trace systems are just some basic steps outlined.
5. WHEN A PRODUCT IS RECALLED
What really happens when a product is recalled? Sure, it's one thing to take steps to mitigate the risk of a recall, but it still happens. In the event that it does, it’s best to know what to expect and how to prepare for it. Having steps in place before a recall happens can save valuable time and the stress of navigating the process in case recall must occur. And then, practice a recall regularly so you are prepared.
6. BEST PRACTICES FOR RETURNED PRODUCT
Once the recalled product is back to your facility, it is crucial that the proper precautions are taken to ensure that these products aren't redistributed back to the public or potentially contaminating other batches of product. Labeling and quarantining returned product is the best way to ensure that this does not happen. This includes keeping it distinctly separated from other products, labeling it to make sure employees do not mistake it for something else, and thoroughly documenting all information related (quantity, handling and refunds).
7. RECALL IMPACT ON LIABILITY AND INSURANCE
Insurance, the right insurance, is essential considering the potential risks of product recall. While it's necessary to have product liability insurance which allows you to be protected against damages to third parties, it DOES NOT respond to recall costs. The cost of a recall can severely damage, or in cases of smaller institutions, sink your company. Contact your insurance provider to see how you can be protected against potential recall.
8.TECH THAT SIMPLIFIES RECALLS AND SAVES MONEY
Traceability is of the highest importance when it comes to recalls. The ability to trace ingredients back to suppliers and having batch numbers put in place avoids the “any and all” recall possibility. Not only this, but transparency-enabling technology like TagOne can help prevent the instance of a recall altogether. Using disciplined data, tracking transactions, managing documents and inventory, and managing ingredient quality is the kind of “end to end” traceability that will prevent your company from the damages associated with recall.
Ultimately, a recall is something that no institution ever wants to endure, but it is best to be aware and be prepared. The hemp and CBD industries are still maturing and we are all learning together. Intelligent and efficient E2E (end to end) technology is the best way to ensure preparedness and prevention.
Interested in learning more about TagOne's "Seed to sale" technology? Please contact us here: https://www.tagone.com/contact Or call us 609.786.2426
For the full webinar, watch below.