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Marketing regulations could violate consumer protections

Consumer Protection Violations Established via Safety Regulation or Warranty Breach

Massachusetts’s consumer protection statute, known as Chapter 93A, has teeth. Any act or practice found to be unfair or deceptive can constitute a violation, entitling a successful claimant to actual damages (or $25), which can be doubled or trebled for willful violations, along with reasonable attorneys’ fees. In addition, liability has been found even in cases where the existence of an actual injury is highly questionable.

Under regulations promulgated by the Massachusetts Attorney General, any act or practice is, as a matter of law, a violation of Chapter 93A if it does not comply with existing “statutes, rules, regulations or other laws, meant for the protection of the public’s health, safety or welfare promulgated by the Commonwealth or any political subdivision thereof” if intended to protect consumers. 940 CMR 3.16(3).

The regulations do allow for preapproval of packaging and labeling by the CCC, which could provide a limited “safe harbor” to businesses that request and obtain it. However, the regulation specifies that the preapproval process is not a substitute for compliance with labeling requirements. It may at least, if employed, provide a defense to claims of willful or knowing violations.

With all of these potential sources of exposure, marijuana establishments should maintain a close watch on all advertising, marketing, branding and promotional activities, which will be critical to managing risk exposure. The only safe bet is that consumer advocates and members of the plaintiffs’ class action bar will be watching for any potential violation of these regulations.