CBD-Based Products: How Legal Marijuana is Proving a Drag for California Semi-Truckers
- The year when many states across the US, including California, endorsed the recreational use of cannabis by adults aged 21+. Four years down the line, and the trucking sector is still grappling with this NEW reality.
According to the American Trucking Assns, it was not until recently that the driver turnover at both large and middle commercial fleets dropped below the 90% mark. While that is an impressive stat, the loss of even one trucker could land a blow to an entire fleet.
However, the legalization of cannabis means that the drug will become more accessible, resulting in a higher probability for a trucker to have a lapse in judgment. This situation poses a massive challenge for fleet owners and truckers alike- the same truckers who must abide by federal stipulations.
The Paradox for Truckers: Using Legal Cannabis Vs. Failing THC Drug Tests
Mid last year, the American Trucking Assns CEO Chris Spear admitted that the legalization of pot is making it harder for the sector to recruit drug-free truckers. Mind you; Spear only tackled the tip of the problem. Many other thorny issues are impounding the trucking sector. Key among them is the fact that more and more drivers are failing THC-related drug tests. Surprisingly, a few drivers have failed tests for “harmless” CBD products- gummies, topicals, oils, name them!
Truckers who try out CBD (and any other product in between) are often confident it would return a negative result in a drug test. But according to an expert on CBD, Jason Friedman, the product has variable traces of THC- a constituent of the cannabis plant that makes a user high.
Quick Fact: Semi-truckers mostly use CBD oil to reduce pain and soothe muscles due to long hours of driving.
A failed cannabis test could mean damaging consequences for truckers, such as canceled driving licenses and lost jobs, to name but a few. It could mean a frustrating end to a long-standing trucking career (spanning decades or more!). So who is to blame for all this mess?
CBD-oriented Businesses on the Receiving End of Customers’ Wrath
In the US, CBD oil is legal as long as THC trace levels are below 0.2%. This means that if a trucker were to consume anywhere around 500mg to 2000mg of CBD in 24 hours, it might be JUST enough to result in a positive for marijuana on a drug test. However, this would be a false positive return as the screening would reveal the lowest level of THC (less than 0.2%) and several other cannabinoids. Whether or not CBD-oriented businesses are familiar with these figures is still a mystery.
Most drivers who test positive for marijuana blame the labeling on CBD packets or cans. Others lack information about the trace amounts of THC in CBD oil and related products. In the same vein, unscrupulous business owners trick drivers into purchasing CBD oil, telling them that the amount of cannabis is too low that it won’t show in a drug test.
The Consequences
How do ‘JustCBD’ advertisements contain THC?
How do CBD candy products with ‘NoTHC’ labels land a trucker in hot soup?
Most truckers will CERTAINLY ask such questions and more when flunked by a drug test. They will cry foul. California business which don’t stick to CBD ground rules (labeling, advertisements, and more) should brace themselves to deal with:
Money-intensive Lawsuits
Damaged Reputation
Dented Confidence in CBD Consumer Products
We all know that legal action can have far-reaching repercussions. Firms could potentially lose millions of dollars in lawsuits involving clients. If your business is in the CBD pool, take a refresher. Maybe it’s time to explore what you SHOULD be doing to shield your firm, both in terms of reputation and finances.
What CBD Businesses MUST do to Seal the Loose Ends
There are only a few things that CBD managers dread more than lawsuits. Even petty cases have a way of eating up vast sums of money, tarnishing reputations, and slashing demand for CBD products.
To put things into perspective, US firms pay more than $20 million in litigation fees- an alarming fact that should keep every CEO on their toes.
No matter how large or small your firm is, a user may sue you if they believe your CBD products caused direct harm to their job (in this case, being trucking). Therefore, it’s your responsibility to do everything within your flex to limit the risk against costly legal expenses.
Here, we take a penetrating look at what you can do today to shield your company for tomorrow:
Hire a Refined Lawyer
When sued, a competent lawyer is your safest route to legal contact. Ensure you recruit a lawyer that is well-versed with California laws, especially those regarding CBD consumption. And don’t just settle for any lawyer that pitches their CV impressively. Choosy is the way to go. Explore credible options such as cold calling, professional references, and interviewing through direct referrals.
Watch What You Say
When it comes to your firm’s reputation and image, prevent any public sentiments that may show your character as questionable. The same goes for all your employees. Don’t confront the trucker with defamatory or potentially libelous utterings. Instead, please wait for the law to follow its due course.
Take Out a Product Liability Insurance
Instances of product liability may include misleading claims and false advertising made through your primary marketing strategy. The best way to shield your firm is to fill a product liability insurance. But don’t settle for coverage with too many exclusionary clauses. Instead, seek to work with a specialized marijuana insurance coverage. Make sure it exhaustively covers both the financial risks involved and the different available policies for running a cannabis business.
Protect Your Assets: LLCs Vs. Corporations
As mentioned, the cannabis industry is extremely volatile.
Both corporations and LLCs provide asset protection advantage of limited liability. It means that if your business is subject to a lawsuit, you are NOT individually liable for the debt incurred. They cannot ship your house or car as long as you did not enlist these assets with the business.
The ideal way to shield your assets is to file paperwork for an LLC or a corporation.
But which among these two should you create? It depends on a myriad of factors, but typically LLCs offer double-protection for assets. They protect not only your assets, but also those of the business against personal liability.
The Bottomline: Cannabis Firms Need To Act Now!
While truckers can point fingers at business owners’ negligence in labeling or advertising CBD products, they need to take MASSIVE action from their end. They need to scrutinize CBD products for THC traces to ensure they don’t fail cannabis drug tests. Meanwhile, marijuana companies need to prepare for the inevitability of lawsuits. If your firm is anticipating a lawsuit, be sure to put the above actions under your belt. After all, your budding venture deserves a hassle and legal-free future.
Northstar Financial Consulting Group is the #1 accounting and finance firm in the cannabis space. Thanks to our top-notch financial solutions, you get to focus on your business and leave the aspect of financial planning to us. Our expertise in the Cannabis industry is unrivaled. Mitigating the effects of IRC 208 tax code and crafting strategies to attain a positive cash flow are among our TOP priorities. Why don’t you contact us today to learn more about financial advisory?