Product Liability Cannabis Companies
Oct. 11, 2023 – The cannabis industry is booming. Just recently BDSA, the leading provider of market intelligence for the cannabis industry, announced an update of its cannabis market forecast, revealing the legal United States cannabis market is expected to grow 12% by the end of 2023, reaching a total of $29.6 billion. By 2027, the U.S. is forecast to deliver $45 billion in total legal sales. The total global legal cannabis industry is predicted to reach $36.7 billion in 2023 (with 80% of sales from U.S. markets), growing at a compound annual growth rate (CAGR) of 13% from 2022 to 2027.
But the cannabis industry isn’t the only industry taking off. The kratom industry, which has had its own grey-market battles with state regulation and FDA determinations, has had to deal with the effects of an ever-expanding market as well.
Kratom is an unregulated substance that is derived from the Mitragyna Speciosa tree that is native to Southeast Asia. Although not FDA approved for human consumption, product sellers have advertised Kratom “as a safe legal substance available as an alternative to other opioids”. Research, however, is limited concerning the relative safety of Kratom for the treatment of chronic pain or opioid dependence. Even the label states that the products have not been evaluated by the FDA and are not intended to treat, prevent, cure, or diagnose any illness.
The rapid expansion of recreational drug markets brings them within a well-known risk that is a little more mundane – that of product liability lawsuits.
On August 29, 2023, the estate of Patrick Coyne brought a product liability lawsuit against several defendants including Society Botanicals, Chin 2 Corp, and KSC USA. The Estate claimed that these defendants are all jointly liable as manufactures and or product sellers of Kratom Divine. The customer used Kratom Divine to relieve chronic back pain. The lawsuit alleges the consumer died after taking the Kratom, due to its toxic effects.
In Washington, product liability claims are governed by the Washington Product Liability Act (WPLA). The WPLA defines “manufacturer” as including “a product seller who designs, produces, makes, fabricates, constructs, or remanufactures the relevant product or component part of a product before its sale to a user or consumer.” RCW 7.72.010(2). There are strict liability or product manufacturing cases which means that if the seller is labeled a manufacturer under the definition found under WPLA and RCW 7.72.010(2), then the seller/manufacturer will be held liable at a stricter threshold than just a regular seller.
This is exactly what happened in the Kratom case. Although one company held itself out as a manufacturer under RCW 7.72.010(2), the other two companies involved in the chain of distribution failed to meet their burden in establishing that they are entitled to judgment as a matter of law concerning their liability under RCW 7.72.040(2)(a) and (b).
The important aspect to note is that despite the lack of regulation of Kratom, its legal status does not shield manufactures from product liability suits or FTCA claims. But don’t worry, Gleam Law has plenty of experience dealing with Product Liability claims. Our main litigation partner, Justin Walsh, has taught Products Liability Law at one of the top personal injury law firms in Washington. At Gleam, he even litigated the first cannabis Products Liability case, brought by a Police officer who alleged cannabis companies caused his hospitalization due to lung damage after using one of several cannabis vape cartridges.
Just like Kratom, vaping cannabis exists in a legal gray area and there is little regulation from the FDA. However, we were able to get the case dismissed because of the lack of proof that the claimant’s harm was proximately caused by the negligence of our cannabis company client. There was no proof that there was anything in the cartridge that was not reasonably safe manufactured, that it was not reasonably safe to the ordinary consumer, or that it was in any way defective. Unfortunately for our client, the case was adjudicated three times in two separate courts before the dismissal was final and certain.
Gleam Law has the Product Liability experience to be able to defend you, whether it be cannabis, kratom, CBD, or even more traditional manufactured products.
If you have questions about this issue, or need legal help, give Gleam Law a call or email us at email@example.com.