California Cannabis Supply Chain Contracts: Recalls

California’s cannabis regime is set up to separate every point in the supply chain into different license types: cultivation, manufacturing, distribution, testing and retail sales, to name a few. Except for a few vertically integrated companies, virtually all cannabis businesses must rely on other companies in the supply chain to get products from farm to consumer.

To that end, our California cannabis attorneys regularly draft “supply chain” agreements, which is a broad term that includes cannabis contracts such as purchase agreements, distribution agreements, manufacturing agreements, supply agreements, license agreements, and so on. We have been publishing a series of posts identifying common issues with cannabis supply chain contracts in California and will continue to do so in the coming months. If you haven’t already read earlier articles on this topic, I suggest you start with the following:

Today, I want to discuss recall provisions. Product recalls occur when the maker or seller of a cannabis good asks downstream sellers or consumers to return the product, usually after discovery of some defect or safety hazard. For example, a manufacturer of a cannabis vaporizer may initiate a recall in the event that it learns that the vaporizer battery can overheat and burn

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