Tag Archives: communication

It’s High Time for the Cannabis Industry to Pay Attention to Contact Compliance

By Daniel Blynn
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Communicating with consumers through the telephone—either by text messages or by calls—is a great way to engage with them. Indeed, a recent analysis of text messaging trends reveals that most consumers check their cell phones more than 20 times a day, with almost 20% saying they check it more than 50 times.1 Text messages have a nearly five-times higher open rate than email, and the average consumer has 96 unread emails in his inbox compared to about one unread text message at any given time.2 In short, used properly, text messaging is an effective medium to reach consumers. And cannabis companies have embraced texting with open arms, especially given that other forms of advertising currently are off limits to the industry.

But with the utility of text messaging consumers comes substantial risk. Cannabis companies are frequent targets of private litigation arising out of their texting practices. Over the past two years, dozens of class action lawsuits alleging unlawful text messages have been filed against cannabis companies, including well-known multistate operators and less recognizable ones. Most of these cases are ongoing and may rightfully be considered “bet the company” litigations. For example, a pending case against cannabis delivery company Eaze Solutions, Inc. alleges that unsolicited text messages were sent to 52,104 individuals.3 Assuming each putative class member received just one text from Eaze, the statutory damages exposure ranges between $26 million and $78 million. The court twice has rejected proposed class settlements of $1.75 million and, later, $3.5 million as being too low. Given the potential exposure, before cannabis companies click the send button on a text message, they need to ensure that they’re abiding by the law.

At the federal level, the Telephone Consumer Protection Act (TCPA) regulates all types of text messages, telemarketing and transactional/informational alike. Generally speaking, the TCPA governs how text messages are sent (i.e., manually versus automatically dialed), and how calls are conducted and voicemail messages delivered (live representative versus “artificial or prerecorded voice”).4 The TCPA also contains do not call rules applicable to marketing messages. The TCPA is enforced by the Federal Communications Commission (FCC) and, notably, through private lawsuits, including class actions. Under the TCPA, a private plaintiff can seek statutory damages of $500 for each unsolicited autodialed text message (or unsolicited call that utilizes an artificial or prerecorded voice or delivers a prerecorded message). If a solicitation text is sent to a telephone number registered on the National Do Not Call Registry or the cannabis seller’s own internal do not call list, the statutory damages are “up to” $500 per call or text. In all cases, statutory damages may be trebled to $1,500 if the TCPA violation was committed either knowingly or willfully.

These rules fit atop myriad state telemarketing and do-not-call laws, which may be more restrictive than the TCPA.

While I could fill up this entire website with the various calling and texting issues with which sellers generally struggle under the TCPA—such as the use of artificial or prerecorded voices and prerecorded messages, how to handle reassigned numbers, revocation of consent issues, etc.—this article focuses on the basic rules governing how cannabis companies can text consumers, and what types of consent they need to do so under the Act.

Overview of TCPA’s Consent Rules

Under the TCPA, a seller is required to have a consumer’s “prior express consent” in order to send an autodialed non-marketing text message to a cell phone; The consent rule for autodialed marketing text messages to cell phones are different in that they require “prior express written consent” (EWC). No consent is needed in order to manually send a text message (and note that “manually” does not necessarily mean that an individual must dial all ten digits and click send from a standard smartphone).

“Prior express consent” is a lower level form of consent and generally exists where a consumer voluntarily has provided her telephone number to the seller.

“Prior express written consent,” on the other hand, is a heightened consent standard requiring a written agreement bearing (1) the signature of the person called (either traditional “wet” signature or an electronic/digital one) that clearly authorizes the seller to deliver or cause to be delivered to the consumer telemarketing messages; and (2) the telephone number to which the signatory authorizes such telemarketing messages to be delivered. If the seller utilizes an autodialer to send a marketing text message to a cell phone, then the written agreement with the consumer must also clearly and conspicuously disclose both that (a) the text may be sent using an autodialer, and (b) the consumer is not required to provide his consent as a condition of purchasing any goods or services. This EWC to be contacted must have been provided by the consumer before the text is sent. Unlike the lower standard for prior express consent, the mere provision of a cell phone number to the seller does not constitute the required EWC to be contacted at that number via an autodialer marketing purposes.

Confusing enough? Don’t worry, a table summarizing the current TCPA consent rules is below:

What Type of Text Are You Sending?

Generally, the type of consumer consent that is needed to send a text message is a function of the type of text and how it is being sent. “Telephone solicitations” are subject to more restrictions than purely informational or transactional text messages. The TCPA defines “telephone solicitation” to be “the initiation of a [text] message for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services.”

On the other end of the spectrum lie pure informational or transactional text messages. These are communications designed to provide information, rather than promote products and services (in the case of informational calls), and to “facilitate, complete, or confirm a commercial transaction that the recipient has previously agreed to enter into” (in the case of transactional calls). For example, customer satisfaction survey texts and texts to confirm orders and deliveries are informational and transactional, respectively.

Finally, the TCPA also covers a third category of text messages—“dual purpose” texts. These are texts with either a customer service or informational component as well as a marketing one. Because courts and the FCC take an expansive view of what constitutes telemarketing, dual purpose texts are treated as pure marketing messages and subject to the more rigorous standards to obtain the requisite level of consumer consent.

Common examples of texts that cannabis companies send and the corresponding level of consent needed are as follows: 

  • Autodialed Text Messages: Under the TCPA, an autodialer is defined to be equipment, which has the capacity to store or produce telephone numbers to be called using a random or sequential number generator, and to dial such numbers without a requisite level of human involvement. However, there currently is a “significant fog of uncertainty” as to what is and is not an autodialer, with different courts reaching conflicting decisions as to, for example, whether simply dialing from a curated list of targeted telephone numbers constitutes autodialing, or whether the numbers on that list must have been randomly or sequentially generated in order for a platform to constitute an autodialer.
  • While proceedings are ongoing at the FCC to clarify the autodialer definition, the Supreme Court recently agreed to decide the autodialer issue during its next term in a TCPA case filed against Facebook; a decision is expected by May or June 2021. Notably, in mid-September 2020, the Department of Justice filed a “friend of the court” brief taking the industry-favorable position that a platform itself must randomly or sequentially generate the telephone numbers that it texts to be considered an autodialer under the statute.
  • Texts sent by autodialer (whether the autodialing functionality is actually used to send the text or not) require consent from the recipient. Note that this rule generally applies to both individual and business cell phone numbers. As long as the text is not a solicitation message, then consent may be obtained orally. Alternatively, if a consumer provides his cellular telephone number to you via an online lead form or during the checkout process, then this should be sufficient to constitute “prior express consent” to receive autodialed non-solicitation texts, such as order confirmations or delivery updates. The key to obtaining prior express consent, however, is that the consumer provide you with his telephone number voluntarily.
  • However, EWC is required to send a text for marketing purposes using an autodialer. The EWC requirements are described above and examples of EWC are below.
  • Note that, under the TCPA, the seller has the burden of demonstrating that it had the requisite level of consent to send the text in question. Thus, cannabis companies should maintain records evidencing such consent. A good rule of thumb is to maintain such records for a period of five years from the date of text, which covers the TCPA’s statute of limitations and the limitations periods under most state telemarketing laws.
  • Manually-Dialed Text Messages: If a cannabis company manually sends text messages—e., using a device that does not have the capacity to autodial—then no special consent is needed. However, even for manually-dialed texts, applicable do not call lists must be checked.
  • Texts to Numbers on Do Not Call Lists: The TCPA also prohibits companies from sending marketing texts to consumers whose telephone numbers are registered on either the National Do Not Call Registry or the seller’s own internal do not call list, unless an exemption applies, such as calls with the consumer’s EWC or to consumers with whom the seller has an “established business relationship.”5 The TCPA’s do not call rules are agnostic to how a telephone number is dialed, whether it be manually or by automated means. Be sure to scrub against relevant do not call lists.

Best Practices for Obtaining Proper Consent

As noted above, for autodialed non-marketing text messages to cell phones, the lower level of simple “prior express consent” is required. Prior express consent is deemed to exist by virtue of a consumer having provided his telephone number to a cannabis company, either orally or in writing.

EWC for autodialed solicitation text messages, however, requires more. First, specific disclosures must be made “clearly and conspicuously” to the consumer. Specifically, a consumer should be advised and agree that, by providing his telephone number to the cannabis company, he is agreeing (1) to receive potentially autodialed (2) marketing text messages, and (3) that he is not required to provide his consent as a condition of making a purchase. This disclosure should not be placed beneath a submission button on a lead form or checkout page (unless an unchecked check box is utilized to demonstrate that the consumer has reviewed and accepted the disclosure); it needs to be unavoidable. The disclosure should be presented in readable, crisp font, both in size and in color, that contrasts against its background. For example, the following disclosures likely would pass muster to demonstrate EWC:

As you may now appreciate, the TCPA is a minefield (and this article just scratches the surface). However, with planning and a good compliance program, the law can be navigated to minimize risk while, at the same time, allowing for communications with cannabis consumers. Remember, an ounce of compliance now can lead to a pound of litigation prevention later.


Disclaimer: Using, distributing, possessing, and/or selling marijuana is illegal under existing federal law. Compliance with state law does not guarantee or constitute compliance with federal law. This informational overview is not intended to provide any legal advice or any guidance or assistance in violating federal law.


References

  1. Zipwhip, 2020 State of Texting, at 4 (2020).
  2. Id. at 11.
  3. See Lloyd v. Eaze Solutions, Inc., No. 3:18-cv-05176 (N.D. Cal.).
  4. Although the TCPA utilizes the term “calls,” courts have found the statute applies with the same force to text messages. This article focuses on text messaging but most of the principles extend to calls as well.
  5. There are two types of “established business relationships” (EBRs) under the TCPA: (1) inquiry EBRs and (2) transactional EBRs. Pursuant to a transactional EBR, a seller may text a consumer whose telephone number is listed on the National Do Not Call Registry for up to 18 months after the consumer’s last purchase, delivery, or payment—i.e., from the date of the seller’s last transaction with the former customer—unless the consumer asks the seller to stop calling him. In that case, the seller must honor the do not call request by placing the consumer’s telephone number on its own internal do not call list. Under an inquiry EBR, the seller may text a consumer who has inquired about its products or services, but only for up to three months. Again, if the consumer asks the seller to stop calling within that three-month timeframe, it must honor the request and add the consumer’s telephone number to its internal do not call list. Telephone numbers on the seller’s internal do not call list should remain on that list indefinitely or until the consumer subsequently provides her prior express written consent (or explicitly asks to be removed from the internal do not call list); a new EBR will not override an internal do not call request. Indeed, as to the latter, the Federal Trade Commission and several state attorneys general made this point clear in their briefing in a recent TCPA and Telemarketing Sales Rule litigation then-pending in Illinois federal court; the practical reason for the rule is that a consumer may wish to do business with a seller yet not receive telemarketing calls.
The Brand Marketing Byte

The Hottest U.S. Cannabis Retail Brands Right Now

By Cannabis Industry Journal Staff
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The Brand Marketing Byte showcases highlights from Pioneer Intelligence’s Cannabis Brand Marketing Snapshots, featuring data-led case studies covering marketing and business development activities of U.S. licensed cannabis companies.

In this week’s Byte, we’re taking a look at the hottest retail U.S. cannabis brands right now. Using a scoring methodology that factors in a wide variety of data sets, Pioneer’s algorithm tracks brand awareness, audience growth and engagement. Using more than 80,000 relevant data points per week, they analyze business activity across social media, earned media and web-related activities.

The brands listed below have the strongest marketing performance indicators, according to Pioneer Intelligence, which includes web activity. Here are a few insights that explain why some of these companies made the cut:

  1. Cookies comes in at the eighth spot on July’s list. The brand does a lot of promotional content on their business development activity, which helps them make the news almost every week. This time around, they announced the debut of a new chain of Sativa-focused dispensaries under the brand name Lemonnade.
  2. Terrapin Care Station took the fifteenth spot in July’s list. Terrapin made headlines this month with their expansion in Michigan. Their newest brick-and-mortar location is the first medical cultivation facility to open in Grand Rapids, Michigan.
  3. Surterra Wellness had a podium finish in July, becoming the third hottest U.S. cannabis retail brand. Back in early July, they received a lot of press for launching its line of tinctures in Texas.

Here are the top 15 hottest U.S. cannabis retail brands for July 2020:

  1. Viola
  2. Stiiizy
  3. Surterra Wellness
  4. Dosist
  5. Grassroots
  6. GrowHealthy
  7. Liberty
  8. Cookies
  9. Serra
  10. gLeaf
  11. Caliva
  12. Sunday Goods
  13. Harvest
  14. Connected Cannabis Co.
  15. Terrapin Care Station

Gen Z Marketing Dos and Don’ts in the Cannabis Industry

By Alexis Krisay
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Gen Z is currently at about 40% of consumers, and this segment will be rapidly growing in the coming years. Most researchers and media define this generation as those who were born between the mid to late 1990s and early 2010s. In the United States alone, Gen Z consumers have an estimated $143 billion in buying power. Businesses that aren’t putting enough marketing strategies toward Gen Z need to reevaluate and switch gears, stat! Start laying the groundwork for your company’s success in the coming years. Kickstart your targeted Gen Z marketing strategies now. Every industry is different, but there are a few key do’s and don’ts to follow when communicating with Gen Z buyers. In the cannabis field, it is especially important to only market to those who can legally indulge.

Do Make Genuine Connections Online

Gen Z is our first truly digital generation. They’ve grown up using social media and the internet. As digital natives, they’re quick to recognize inauthentic communication methods. Whether it’s unnatural comments or trying to cover up negative testimonials, the younger crowd can always spot brands trying to be something they are not. Instead, practice total transparency with followers and friends to ensure that there is never a lack of brand accountability and authenticity. Within the cannabis industry, businesses can use their social media platforms to educate, build relationships and easily refute longstanding cannabis stereotypes that are so common in older generations.

Don’t Try Too Hard to Be Relatable

One way to make genuine connections is to engage with, create and share memes and other trends on social media. Although this is an excellent method for increased interactions, there is also plenty of room for error, so caution is the guiding principle. If not executed correctly, a post about a meme could easily make brands look unprofessional, or behind the times as they’ve missed the actual joke. These techniques can make business accounts seem like they are trying too hard to fit in, and will ultimately cause Gen Z to hit the “unfollow” button. Instead, focus on topics that closely align with the brand’s image and find creative ways to make content relate to exciting and funny trending ideas about cannabis.

Do Care About Social Issues and Responsibility

Focus on creating high quality, exciting videos and vibrant pictures that highlight cannabisResearch has shown that Gen Z sincerely cares about social issues and responsibilities. These beliefs don’t only apply just to their personal lives, but also to their buying habits and which businesses they want to support. These beliefs provide an excellent opportunity for brands to stake out common ground with Gen Z and support a variety of causes at the same time. Many of these consumers seem to care about topics like the environment, equality, hunger and homelessness. Do note that it’s essential to review and analyze these issues before making statements or posting about them on social media. For the cannabis industry, many businesses tend to raise awareness about medical matters, social equity and community-oriented programs.

Don’t Post the Same Content Repeatedly

After getting into the social media game, it can be tough to figure out how often to post. As much as those aspects do play an essential role in overall engagements, it’s also crucial to pay attention to the type of content that makes it into followers’ feeds. All photos and videos should be related, yet unique. Posting the same marketing content over and over is going to bore Gen Z, and make business accounts look less aesthetically pleasing. Instead, focus on creating high quality, exciting videos and vibrant pictures that highlight cannabis, and then vary your post types.

Navigating Gen Z communication and marketing tactics are going to be pivotal in just a few years, making it critical for businesses to rework their marketing strategies as soon as possible. If cannabis brands can capture the essence of authenticity and social responsibility in their communication methods, while avoiding posting repetitive content, they should be able to reach legal Gen Z-ers seamlessly.

Priorities During the Pandemic: How to Run a Lab Under COVID-19

By Dr. Peter Krause, Udo Lampe
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During the COVID-19 pandemic, most testing laboratories have been classified as relevant for the system or as carrying out essential activities for national governments. Therefore, it is crucial to maintain activities and optimally assess the changes that are occurring, framed within the spread of the SARS-CoV-2 virus. Analytica Alimentaria GmbH, a testing laboratory with its headquarters in Berlin, Germany and a branch office in Almeria, Spain, decided to focus its management on the analysis of events and the options available, at the legal and employment level, to ensure continuity of activities and reducing, as much as possible, the damage for the parties involved: employees and company. Accredited by the International Accreditation Service (IAS) to ISO/IEC 17025:2017, Analytica Alimentaria GmbH is required to implement risk-based thinking to identify, assess and treat risks and opportunities for the laboratory. Since March 12, 2020 a crisis committee was established, formed by the six members of the company’s management, covering general management, human resources, direction of production, finance and IT. The committee meets every day and it intends to:

  • Minimize the risks of contagion
  • Be able to continue providing the service required by our clients
  • ensure that the company as a whole will survive the economic impact of the crisis
  • Take measures that are within the legality of both countries where the laboratory operates (Spain and Germany),
  • Manage internal and external communication related to the crisis

To achieve correct decision making, daily meetings of the committee were established, to review the situations that were presented day after day and the actions that should be carried out. Each decision was analysed in a prioritized, objective, collaborative and global way.

The basis of the lab’s action plan was a well-developed risk assessment. In addition to the risk of getting a droplet or smear/contact infection with the coronavirus SARS-CoV-2 (risk I) by contact with other people, psychological stress caused by changing working conditions (home office), contact options and information channels were also identified (risk II).

As a result of the risk assessment, the conclusion was that a mix of various measures is the best form of prevention:

  • Keep distance
  • Avoid “super spreader” events
  • Personal hygiene
  • Regular communication between managers and personnel about the current situation and possible scenarios

The risk assessment took both areas into account. The following assessment was developed together with an external specialist and focused on risk I:

Risk I Assessment Protective measures / hygiene plan
Organisation
Working hours and break arrangements High Limit the gathering of people and ensure a minimum distance:

  • Relocated work, break and mealtimes
  • Create fixed groups of shift-working staff
  • Time gap of 20 min. between the shifts
  • Enable home office wherever it is possible
Third party access Moderate Few but “well-known” visitors:

  • Reduce the number of visits and keep internal contacts to a minimum
  • Ensure the contact chain
  • Inform visitors about the internal rules and obtain written consent
Dealing with

suspected cases

High Isolation and immediate leave of the company:

  • Contactless fever measurement (in case of typical symptoms)
  • Leave the company or stay at home
  • If the infection is confirmed, find contact persons (including customers or visitors) and inform them about a possible risk of infection
Contact with other persons
Traffic route from home to work Moderate Avoid public transportation:

  • Take a car, bicycle or go by foot
  • Enable mobile work and teleworking
At work High Always keep a sufficient distance of 2.0 m from people:

  • If minimum distances cannot be maintained, wear protective masks or install physical barriers (acrylic glass)
  • Organize traffic routes so that minimum distances can be maintained (one-way routes, floor markings indicating a distance of 2 m)
  • Use digital meetings instead of physical ones
Sanitary facilities Moderate Remove virus-loaded droplet as often as possible:

  • Provide skin-friendly liquid soaps and towel dispensers
  • Shorten or intensify cleaning intervals
  • Hang out instructions for washing hands at the sink
  • Include instructions for proper hand-disinfection
Canteens, tea kitchens and break rooms High One person per 10 m² = minimum:

  • Reduce the number of chairs per table
  • Informative signs in every room, indicating the maximum number of permitted persons
Ventilation High Diluting or removing bioaerosols (1 µm virus-droplets):

  • Leave as many doors open as possible
  • Regular and documented shock ventilation every 30 minutes or more frequently, depending on the size of window
  • Operate ventilation and air-conditioning systems, since the transmission risk is classified as low here
Use of work equipment Moderate Use tools and work equipment for personal use:

  • Regular cleaning with changing use (PC, hand tools, coffee machine, …)
  • If possible, use gloves when using equipment for a larger number of users
Protective masks Moderate
  • Use of protective masks as an additional measure, indicating that this does not replace keeping distance
  • Recommend wearing masks in commonly used areas and explain that they do not protect yourself, but help to protect others
  • Give clear instructions (written and oral) on how to use a mask correctly and explain the use and purpose of different mask-types
  • Distribute masks freely

A number of guidelines and concrete measures addressing the risks related to health issues are already in place. Those health issues in risk group II are more closely related to the psychological effects of the crisis, however, are also more complex to mitigate. The key strategy is communication and, in particular, actively listening to all employees of the company.

Analytica’s robust company culture, based on values established in coordination with the whole staff, has been of significant help during the crisis. The some 150 staff members are organized by over 22 team coordinators. During the crisis, active communication has been intensified significantly. The crisis management team set up regular alignment meetings with all the coordinators and with individual persons with particular situations. This way, not only was it possible to explain the development of the crisis and the subsequent measures, the conversations with coordinators were also the most important source of information enabling the appropriate decisions. The coordinators, closely aligned and in sync with management, were then able to communicate with their team members with a high degree of confidence. One outcome of the communication was a measure that proved very effective in fortifying trust within the company: all measures and evaluations, as well as a chronological review, are published in a dynamic internal report and are made available, with full transparency, to all staff members. Besides the many individual and group alignment meetings (usually held by video conference), this has been a key measure to establish confidence and security within the company.

On the other hand, the company made a great effort to balance the effect of the general closure of kindergartens and schools in Spain and Germany. Each case where staff members were required to care for children at home was studied individually and agreements were established, adapting shifts and making use of time accounts, to allow childcare at home without significant loss of income.

The success of the measures is shown by the continuous work of both laboratories during the crisis. Besides the personal tragedy of a possible infection, the identified risk to the company has the consequence of a (partial) quarantine due to an infected person in contact with the staff and the consequent loss of work-power which might lead, in extreme cases, to a closure of the laboratory. According to the governmental regulation in Germany, if an infection occurs (confirmed by the health department), contact persons cat. 1 (more than 15 min. contact face to face) are identified and sent to quarantine. Other contact persons, e.g. contact persons cat. 2 (same room without face to face) must be identified quickly with the collaboration of the infected person and notified and, if necessary, sent in quarantine. In this case, there is a confirmed emergency plan that maintains the laboratory’s ability to work, defining replacements and alternative work-flow strategies.

It has been part of our strategy to validate all our measures with the relevant guidance documents made available by the official competent institutions. The German Federal Office for Public Safety and Civil Protection (Bundesamt für Bevölkerungsschutz und Katastrophenhilfe) has published a guide, “Crisis Management in Companies, 9-point Checklist” especially for critical infrastructure companies in the CoVid-19 crisis.

Having been classified as a core business enterprise (Spain) and “relevant to the system” (Germany), we consider it important to use them as a reference to confirm our level of alignment with your proposal for crisis management.

An important effect, relevant to any leader in times of crisis, is that the confirmation of all points of such a checklist provides certain peace of mind regarding the question: Have we done everything we could?

Practical Advice on How to Avoid a TCPA Suit

By Paul Gipson
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Texting consumers is a very effective means to drive engagement and ultimately sales. Text messages have outpaced emails when looking at conversion and click-thru rates. In fact, 95% of texts are read in ninety seconds or less! While text messages can be a great way to engage with prospects and customers, the FCC’s Telephone Consumer Protection Act (TCPA) is a regulation you need to be mindful of. In fact, the average cost of a TCPA settlement is over $6m dollars, which doesn’t include legal fees or reputational damage.

Over the past few years, there have been about 4,000 TCPA cases filed annually. Take a look at the growth:

Companies are being targeted for various reasons, but there are a few that I’ll cover below along with some advice on how to avoid TCPA suits.

See if you can spot the trend in these cases:

  • Papa Johns: $16.5m settlement due to texting pizza specials to consumers without their consent.
  • Abercrombie & Fitch: $10m settlement due to texting store promotions to consumers without their consent.
  • Rack Room Shoes: $26m settlement for texting their reward program members with various sales without their consent.

Do any of these campaigns sound like something your company is engaged in?

So, you’ve got someone who has signed up for a rewards program, wants to receive deals, or has provided their number to your company for other purposes, but you are concerned about the TCPA (hopefully). Based on my experience working with hundreds of clients at CompliancePoint, here’s where I think you should start. But first…

Quick assumption: Your company is using an automated system to send both informational and promotional texts. Examples include “blast campaigns” (upcoming sale) or “triggered campaigns” (signed up for rewards).

Quick point: Just because the text message says your store is having a sale but doesn’t ask the consumer to buy anything on the message, you may think it’s not considered “telemarketing”. This is wrong. Any plan to sell now or in the future through direct marketing is telemarketing and subject to the TCPA.

Here are my top 5 things to consider:

  1. Obtain consent. This is not achieved by simply having a number provided by the consumer. Instead, the consumer must affirmatively agree to receive promotional calls/texts by automated means. This is done through a clear disclosure and often accompanied by an unchecked checkbox.
  2. Honor opt-outs. This seems obvious right? Provide instructions on how to opt-out and look for other phrases like “stop/quit/cancel”. Opt-outs should occur immediately with most common texting platforms.
  3. Keep records. If you receive a complaint, you want to be able to respond confidently and records help you do that. The key records to maintain are your texting records (the phone numbers you texted, the date/time of the text, and the content of the text), your consent opt-in forms, and opt-out requests from consumers with dates. Ask yourself: what records do you need to prove you had consent, and what records prove you didn’t text a consumer after they opted out.
  4. Only text consumers between the hours of 8AM and 9PM according to their time zone. I always recommend going off address and not phone number due to cellphone mobility. If you text a California number at 8PM, but the phone owner lives in New York, you might get a few complaints.
  5. Monitor compliance with these items. Another one that seems obvious, yet most companies fail to do so, and you see above what happens. I guarantee you’ll find issues with most audits.

Bonus – here is a more comprehensive checklist on how to achieve a Safe-Harbor defense.

This article is not intended to be a scare tactic. The TCPA legal landscape is rampant and consumers are more aware now than ever of their rights. A quick Google search of “Cannabis TCPA” helps to illustrate the fact that this industry, like most, is not immune. However, with proper compliance parameters in place, your company can enjoy the benefits of texting with consumers with peace of mind.

Radojka Barycki picture

Preparing Your Recall Strategies

By Radojka Barycki
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Radojka Barycki picture

A product recall is the removal of a defective product from the market because it can cause harm to the consumer or place the manufacturer at risk of legal action.

Although a recall is not something that companies want to be related to, preparing for it is very critical and it is an important part of crisis management.Product recalls can cost companies million dollars in profit loss and civil damages. The company senior management and employees can also face criminal action, if the investigation shows negligent acts. The company will also face loss of reputation and the trust of its customers.

Although a recall is not something that companies want to be related to, preparing for it is very critical and it is an important part of crisis management.

There are several phases when preparing a recall strategy:

Planning Phase

During the planning phase, a recall plan is developed. A recall plan is the procedure that will be followed by an appointed company’s team during an actual recall. A good recall plan will have the following components:

  • Definitions of the type of products recalls. According to federal regulations, there are three types of recalls. The company should know what type of recall they are performing to understand the risk the consumer is facing.
  • A Recall Team. The recall team is the key stakeholders that are responsible for different processes within the company. A good recall team will be multidisciplinary. A multidisciplinary team is a group of people that have different responsibilities within the manufacturing site (i.e. Receiving Manager, QA Manager, etc.) and/or outside (i.e. Legal Counsel, Public Relations, etc.) 
  • A description of the recall team member’s responsibilities must be outlined. A recall coordinator and a backup should be assigned to ensure that there is one person organizing all activities during the recall. 
  • A Communication Plan. It is important that only the appointed person that has the responsibility of external communications (i.e. media, regulators, customers, key stakeholders, etc.). In addition, there should be only one person appointed to handle all the communication within the team (internal communications.)
  • Documents to be used during the recall are:
    • Communication documents: Letters to customers, regulators and media must be drafted and kept on hand for use during the crisis.
    • Forms that will be used to keep track of product inventory on hand (still in the site), product being returned and product being destroyed.
  • A Traceability Procedure should be in place to ensure that materials used in the manufacturing of the finished good can be traced from the time of the delivery to the facility and throughout the product manufacturing process. In addition, traceability must also be provided for finished goods from the manufacturing site to its first point of distribution. This is known as traceability one step back (materials used) and one step forward (first point of distribution.)

    PlantTag
    A plant tagged with a barcode and date for tracking
  • A description of (or reference to) product quarantine (product hold) procedures that must be followed to ensure that the product that is still at the site do not leave the facility. 
  • Product Destruction The company must outline (or reference) how product will be destroyed during a recall process.

Implementation Phase

There are three processes that need to be followed when implementing the recall plan:

  • Training: The recall team must be trained on their roles and responsibilities. Employees working at the site will be receiving directives from the appointed recall team members. It is also important that they are aware about the recall plan and understand the importance of urgency during the situation.
  • Exercise: It is important that the company doesn’t wait until the incident occurs to ensure that everyone in the team understands their roles and responsibilities during the recall. Therefore, annual testing of the procedure is imperative. This implies creating a “mock recall” situation and providing the information to the team to evaluate if they fully understand their role and responsibilities. This also allows the testing of the traceability protocols and systems that have been put in place by the site. Ensure that the team understands that this is an exercise and not an actual recall. You don’t want the team members going through the emotions that an actual recall gives. However, stress the importance of their participation during this exercise. You do not communicate to customers, media or regulators during a recall exercise. 
  • Execution: This is the actual recall and full implementation of the plan. During the actual recall, you communicate to the regulators, customers and media. The company must also conduct daily recall effectiveness checks by using the forms developed for tracking product inventory, recovery and destruction. 
  • Identify root cause and implement corrective actions. Root cause(s) will be identified during the recall process by analyzing the information resulting from the investigation of the incident. Regulatory agencies will actively participate in the discussion for identifying in the implementation of corrective actions. 

Improvement Phase

The recall team should always meet after the recall exercise or the actual recall incident. The team must evaluate what positive or negative outcomes resulted from the process. If there are gaps identified, these need to be closed, so the process is improved.

Health Canada Issues Voluntary Cannabis Recall Guide

By Marguerite Arnold
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Last month, Health Canada published a Voluntary Recall Guide to help producers not only stay in compliance but run their operations better. While it will certainly prove to be a critically useful guide for Canadian LPs who are now subject to domestic regulations, it is also a highly useful document for others. Namely, newly legalizing U.S. states and even European countries now looking for guidance on how to shape, structure and regulate their own burgeoning domestic cultivation markets either underway now or about to start.

What Is Of Particular Interest?

While it may sound like a no-brainer, the guide lays out, albeit in very broad strokes, the kinds of procedures all licensed producers should be implementing anyway to efficiently run a compliant business.

It could be considered, on one level, a critical start-up business guide for those still looking for guidance in Canada (as well as elsewhere). Domestically, the document is clearly a handy template, if not something to create checklists from, in setting up a vital and at this point, mandatory part of a compliant cultivation facility in Canada.

The guide also covers not only domestically distributed product but that bound for export.

One of the more intriguing aspects of the guide is also how low tech it is. For example, the guide suggests that a license holder responsible for recall notices, plan on quick response methods that include everything from a self-addressed postcard to an email acknowledgement link.

That said, recalls must be reported to the government exclusively via an email address (no mail drop is listed). And suggestions about media outlets to which to submit recall notices are noticeably digitally heavy. Websites and social media platforms are suggested as the first two options of posting a recall. Posters at retailers is listed dead last.

What is also notable, not to mention commendable, is the inclusion of how to include supply chain partners in recall notices, as well as the mandate to do it in the first place.

Also Of Note

Also excellent is the attempt to begin to set a checklist and process about evaluating both the process of the recall itself and further identification of future best practices.Health Canada also expects companies to show proof of follow up efforts to reach non-responders all along the supply chain.

For example, the report suggests that LPs obtain not only feedback from both their supply chain and consumers involved, but elicit information on how such entities and individuals received the information in the first place. Further, the volume of responses (especially from end consumers) or lack thereof should be examined specifically to understand how effective the outreach effort actually was in reaching its target audience.

This is especially important because Health Canada also expects companies to show proof of follow up efforts to reach non-responders all along the supply chain.

Regulatory Reporting Guidelines

One of the reasons that this guide is so useful is that Health Canada also expects to receive full written reports touching upon all of the issues it lays out within 30 days of the recall announcement itself.

In turn, this is also a clear attempt to begin to start to document quality controls and attempts to correct the same quickly in an industry still plagued by product quality issues, particularly at home, but with an eye to overseas markets.

As such, it will also prove invaluable to other entities, far beyond Canadian LPs involved in the process this document lays out. Namely, it is a good comprehensive, but easy to follow and generally applicable guide for new states (in the case of the US) if not national governments in Europe and beyond who are now starting to look at regulating their own burgeoning industries from the ground up.

Designing Your Continuing Cannabis Education Program

By RJ Starr
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As many states’ medical cannabis programs are already in full swing and several are launching or nearing their one-year or biennial maturation periods, medical cannabis dispensaries and cannabis cultivation and processing facilities should be fine-tuning their Continuing Cannabis Education Program, or CCEP, and be ready for inspection by state agencies.

While states with medical cannabis programs administer them through various agencies such as Department of Medicine/Health, Department of Pharmacy, Department of Commerce, Alcoholic Beverage Control, each has their own minimum requirements for continuing education in the medical cannabis space, and each structures their program in the direction within which that particular regulatory agency leans. Each state’s personality also brings an influential component as well; for example, a state with a highly visible opioid crisis may place greater emphasis on substance abuse training.

Suffice it to say that while there is certainly insight to be gained from knowing your particular state, there are certain elements of an ongoing professional development program that should be considered in each CCEP. This article will explore a few of the elements integral to any successful human capital and professional development plan from a vantage of compliance, and will offer some insight into the exceptional training methodology designed by Midwest Compassion Center and Bloom Medicinals.

There are a number of key considerations in developing a Continuing Cannabis Education Program, and a thoughtful CCEP should be developed specifically to meet the needs of both the organization and its employees. This can be done by a needs assessment consisting of three levels: organizational, occupational, and individual assessments.

  1. Needs assessment and learning objectives. This part of the framework development asks you to consider what kind of training is needed in your organization. Once you have determined the training needed, you can set learning objectives to measure at the end of the training.
    1. Organizational assessment. In this type of needs assessment, we can determine the skills, knowledge and abilities our cannabis dispensaries need in order to meet their strategic objectives. This type of assessment considers things such as changing laws, demographics and technology trends. Overall, this type of assessment looks at how the organization as a whole can handle its weaknesses while promoting strengths.
    2. Occupational (task) assessment. This type of assessment looks at the specific tasks, skills, knowledge and abilities required of our employees to do the jobs necessary within our dispensaries.
    3. Individual assessment. An individual assessment looks at the performance of an individual employee and determines what training should be accomplished for that individual.
  2. Consideration of learning styles. Making sure to teach to a variety of learning styles is important to development of training programs.
  3. Delivery mode. What is the best way to get your message across? Is classroom or web-based training more appropriate, or should one-on-one mentoring be used? Successful training programs should incorporate a variety of delivery methods.
  4. How much money do you have to spend on this training? This does not only include the cost of materials, but the cost of time. Consideration should also be given to the costs associated with not investing in training: CFO asks CEO, “What happens if we invest in developing our people and then they leave us?” CEO: “What happens if we don’t, and they stay?”
  5. Delivery style. Will the training be self-paced or instructor led? What kinds of discussions and interactions can be developed in conjunction with this training? The delivery style must take into account people’s individual learning styles. A balance of lectures, discussions, role-playing, and activities that solidify concepts are considered part of delivery style.
  6. Audience. Who will be part of this training? Do you have a mix of roles, such as accounting people and marketing people? What are the job responsibilities of these individuals, and how can you make the training relevant to their individual jobs? The audience for the training is an important aspect when developing your CCEP. This can allow the training to be better developed to meet the needs and the skills of a particular group of people.
  7. Content. What needs to be taught? How will you sequence the information? The content obviously is an important consideration. Learning objectives and goals for the training should be established and articulated before content is developed.
  8. Timelines. How long will it take to develop the training? Is there a deadline for training to be completed, and if so, what risk analysis can be used to determine the consequences of not meeting that deadline? After content is developed, understanding time constraints is an important aspect. Will the training take one hour or a day to deliver? What is the timeline consideration in terms of when people should take the training?
  9. Communication. How will employees know the training is available to them? Letting people know when and where the training will take place is part of communication.
  10. Measuring effectiveness. How will you know if your training worked? What ways will you use to measure this? The final aspect of developing a training framework is to consider how it will be measured. At the end, how will you know if the trainees learned what they needed to learn?

A thorough review of your state’s rules and regulations should take place quarterly, with one or more specific employees designated to stay abreast of changes. If your regulatory authority has implemented requirements that trainings must be approved in advance, know that as well, and keep your Continuous Cannabis Education Program up-to-date and ready for inspection.