Cannabis packaging companies scrutinized over product claims

State regulators are scrutinizing cannabis packaging businesses over unverified product statements, targeting at least one company over claims that its bags prevented mold.

The crackdown follows a wave of product recalls in at least seven states where cannabis regulators discovered mold in products cleared for sale, underscoring consumer safety concerns.

Promises made on packaging are coming under a microscope as other questions swirl around the reliability of labs and regulators’ power to ensure product labels are trustworthy and accurate.

But the problems market leader Grove Bags encountered over its TerpLoc products in Washington and Colorado show how ancillary companies risk legal action and lost revenue, leaders in the cannabis packaging sector told MJBizDaily.

“There’s quite a few packaging companies that are making these … claims, and the government is starting to come in and enforce them,” said Simon Knobel, co-founder and CEO of Calyx Containers, a Utah-based cannabis packaging business.

“In general, the cannabis packaging industry should know about these laws and what’s going on because there’s potential liability.”

Cannabis packaging claims under the microscope

Grove Bags was forced to pull products from the market and redesign them after drawing scrutiny in Colorado and Washington state over claims that its TerpLoc bags prevent mold.

Companies that make such claims must be registered with the U.S. Environmental Protection Agency and include an EPA establishment number on their products’ labels, said Daniel Schafer, communications administrator for the Washington State Department of Agriculture (WSDA).

According to WSDA’s Sept. 26 order, Grove’s popular TerpLoc bags meet the definition of a “device.” A device is defined as “any instrument or contrivance intended to trap, destroy, control, repel, or mitigate pests, or to destroy, control, repel or mitigate fungi, nematodes, or such other pests,” the WSDA said.

Because TerpLocs did not get an EPA registration, regulators declared the product “misbranded” and ineligible for distribution in Washington until it removed the claims.

Grove Bags destroyed and replaced the products after receiving the notice from the WSDA, company officials told MJBizDaily.

It also removed claims of “Mold Prevention”  from its website and has indicated it will no longer make those claims on product packaging.

Sales of the bags have resumed in both states.

Still, the episode caught Grove off guard.

Taken by surprise over crackdown on cannabis packaging claims

“We were taken a little by surprise,” Grove Chief Financial Officer Dan Jaffe said. “Agencies have very specific guidelines when it comes to certain kinds of language.

“Using words like ‘mold prevention’ triggers alarms for them.”

Jaffe said Grove developed a special-purpose plastic film for cannabis – similar to those used for prepackaged salads that slow ripening of produce – but said that it’s not the bag itself that prevents mold.

“This is a common claim made by people in our industry,” he said.

“We have a film we created specifically for cannabis, but all we are is a plastic bag.”

“If you’re growing and curing properly, you won’t have mold. It’s not the bag that’s doing it.”

Conduct safety testing before making claims

The situation also shows how federal law sometimes regulates cannabis companies despite federal prohibition.

When a manufacturer or packager claims its product prevents mold or resists mildew, it may seem like a marketing message, but such statements can trigger regulator review of the Federal Insecticide, Fungicide, and Rodentcide Act.

FIFRA gives the EPA the authority to issue a Stop Sale, Use or Removal Order when a pesticide or device is found to be in violation.

Darwin Millard, technical director for St. Louis-based compliance service Cannabis Safety & Quality (CSQ), said that companies making claims that their bags prevent mold should be prepared back them up with studies.

“To make a claim such as that, it needs to meet certain federal requirements,” Millard said. “In our industry, we rush to get things to market without doing the appropriate safety testing.”

Grove conducts both third-party and internal studies to ensure what claims it does make are backed up, Jaffe said.

Most of the studies are related to long-term storage as it relates to weight and moisture retention as well as cannabinoid and terpene retention.

“When we do these studies, the flower we put into our bags is in the optimal range for flower that’s ready to be cured,” he said. “We recommend a certain kind of drying and curing process for optimal results.”

“We don’t necessarily test mold prevention, but if mold had shown up, it would have been part of our study.”

Margaret Jackson can be reached at margaret.jackson@mjbizdaily.com.