Consumer Protection Through Third Party Testing In Cannabis Industry

“When consumers purchase a Toyota, they are not simply purchasing a car, truck, or van. They are placing their trust in our company.” – Akio Toyoda

We buy products throughout our lives. We consume products to make our lives easier and better, from brushing our teeth in the morning to resting on a mattress at night. There is a connection between products and end-users, as well as between end-users and businesses.

Businesses should always focus on finding means to gain the trust of the community in the products and the brand. Internal testing, as well as third-party certification, are the means to have quality control and offer safe products to the public.

Products are required to be safe when used according to directions in the labeling, or in the customary or expected way. Businesses are legally responsible for ensuring that a marketed product is safe when consumed.

Businesses must use quality control measures to ensure products:

  • meet mandatory levels of safety;
  • will not cause harm when used in a reasonable manner, including reasonable misuse.

Today not only do we get locally available products but also products from all over the world at our doorsteps. The growth of international supply chains and e-commerce has opened up a global marketplace for products.

Market monitoring and enforcement systems, which were initially designed to work at a national or local level, faced new hurdles as a result of the global marketplace. While technological advancements assist consumers, they also introduce new threats, exposing flaws in existing consumer protection frameworks that must be addressed.

With advancing, technology new products have emerged. For instance, the cannabis industry has seen an increase in the interest of consumers in cannabis-based products. Markets all over the world are flooded with cannabis-based products like hemp seeds, hemp oil, CBD oil, CBD-based cosmetics to name a few. Interest is growing but consumers are still not completely protected in this niche market. The booming cannabis industry is an unprecedented one.

India and Its Consumers

Consumer spending across India amounted to over 21.6 trillion rupees as of January 2020. India is expected to become the third-largest consumer market by 2030.

India is a middle-income developing economy. Growth in the economy has resulted in an increase in the purchasing power of the middle class, which is the largest segment of the population. This has called for the protection of the consumers and the promotion of responsible consumer movement in the country.

The Indian government protects its consumers through various legislations like the Prevention of Food Adulteration Act, 1954, The Essential Commodities Act, 1955, Bureau of Standards Act, 1986, Consumer Protection Act, 2019, among others.

With a handful of cannabis-based companies emerging in India, the government has to speed up the process of regularization of the products. With government certifications or some form of testing of the products, the consumers would have a better understanding of the products and their use.

How to Protect Consumers From Unfair, Restrictive, Deceptive, and Exploitative Practices of Manufacturers and Suppliers?

Governance – The overall responsibility for creating safe markets for consumers falls on the shoulders of the authorities. Strong and effective governance is essential to lay the groundwork for a product safety system with independent oversight that prioritizes consumer safety. This requires the establishment of clear regulations and norms for the development of safe products, as well as enough instruments and resources for market surveillance and enforcement.

International Guidance – In all areas of the regulatory structure, international guidance can provide a model for governments on how to approach concerns of consumer protection and product safety. For example, the United Nations Guidelines for Consumer Protection (UNGCP) provide guidance to governments and businesses, stating that consumers should have the right to access non-hazardous products and urging the Member States to “adopt or enact legislation to ensure that consumers have access to non-hazardous products.”

Taking Action When Unsafe Products Are Found – When unsafe products are identified, swift and appropriate action must be taken to minimize the risks to consumers.

Improve Safety of Products Before Reaching The Consumers – To reduce the risk of consumer harm there is a need to improve product safety before they reach the market. There is a need for clearer rules and guidance on how to develop safe products.

It is important that proper testing and controls are in place before products get to market. Detailed test methods could make testing easier by giving businesses clear and uniform instructions on how to test their own products.

Independent third-party audits and certifications could lend legitimacy to this strategy. When independent testing is required, public authorities must have sufficient authority and resources. This could include things like conducting border checks on imported goods and responding to emergencies.

What Is Third-party Testing?

When a manufacturer sends its product to an independent, unaffiliated testing company, which tests the components of the product, and ensures what is mentioned in the label is actually inside the product as well, it’s known as third-party testing. It is to check the integrity of the product. 

It allows for the third-party company to catch any inaccuracies before the product is sold. When a product carries a certification it signifies that it has been inspected for its standard by a third party unassociated with the product and the manufacturer.

Third-party testing/certification helps the manufacturers to avoid frauds, identify the root cause of quality issues, minimize defects, improve efficiency and reduce costs associated with quality issues.

Key benefits of third party certification –

  •         Safety of the products;
  •         Enhanced Customer Satisfaction;
  •         Reduced Rejections;
  •         Legal compliance to product safety;
  •         Organizational Productivity and Goodwill;
  •         Credibility among the customer.

How Important Is Third-party Testing in the Cannabis Industry – Cannabis and Its Products?

Cannabis products are mostly for the improvement of one’s health, food products, cosmetics, and lifestyle. When it comes to products that are to be ingested, a thorough and deep understanding of the ingredients and quality standards is a must.

Although standardization in the cannabis industry is yet to be achieved. Lack of regulations and knowledge leaves the consumer unaware of the product quality and the standards mentioned thereafter. They don’t know what is in the products that they are buying or which brand to trust.

Third-party testing should be encouraged in the cannabis industry. With cannabis and its regulations still lying in grey areas, there should be an over-emphasis on third-party testing. It’s crucial and empowering for customers to know that their brands take an extra effort in offering transparency and scientific verification regarding the contents of the products they make.

What Are the Views of Regulators in the USA and UK?

Improved national and international cooperation and coordination between governments and consumer protection agencies is a top goal for facilitating change, achieving consistency, and ensuring consumer protection in the global economy.

The Food and Drug Administration (FDA) in the United States has issued multiple warning letters to companies that promote unapproved drugs that reportedly contain cannabidiol (CBD). FDA examined the chemical composition of cannabis compounds in several of the products as part of these actions, and many of them were found not to contain the quantities of CBD that they claimed to contain.

Scientists in Florida believe that due to lack of regulations and mandatory statutory checks of cannabis products some of the products out in the market could have harmful substances and put the consumers’ health at risk. Companies found with discrepancies about the potency labeling practices might soon be found in non-compliance with the legal requirements. 

As CBD products have been in the market for years, the Food Standards Agency in the UK had hoped that individual companies would come forward with product information. However, because none of them submitted sufficient documentation, the regulator is now requiring them to do so – or threatening to remove them from the market. That’s a major incentive for corporations trying to get a piece of the multibillion-pound CBD sector in the UK.

Independent third-party testing is required in the cannabis industry due to the long chain of production. In the cannabis industry independent third-party testing means a company not affiliated with the cultivator, the manufacturer, the consumer, or the brand, and ultimately has no vested interest in the outcome of the testing.

Be it cannabis-based products or any product, if there is no transparency of the ingredients, there is no authenticity and longevity for the rapidly growing cannabis industry.

Pallavi S. Maheshwari
Pallavi S. Maheshwari
Advocate working towards social upliftment and sustainable development. Here to gather knowledge and write.

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