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There are a host of challenges for cannabis companies with regard to compliance. But let’s go ahead and add one more to the list—your website.

In California for example, cannabis businesses are prohibited from making any false or misleading advertising claims, which extends to the content on your website. This includes any claims interpreted to be based on clinical evidence, as well as any statement comparing your product’s effectiveness to that of other brands or products.

In general, cannabis companies must take greater care to ensure that:

  • nothing on their website is false, untrue, or tends to create a misleading impression
  • information contained on the website is consistent with any labels attached to your products
  • sufficient support exists to validate any health-related statements (CA regulations set a high bar!)
  • you properly display a valid license to operate a commercial cannabis business

If none of the these requirements raises an eyebrow, then how about this: companies that promote other cannabis brands on their website may be liable if those entities are not licensed, or if their license information is not properly displayed (see the recent shot fired at Weedmaps by California’s cannabis czar, and the ensuing legal standoff).

A compliant and effective website is now a necessity for cannabis operators, big or small. It can be one of the most powerful and cost-effective marketing tools in your arsenal.

Along with the cannabis-specific requirements dictated by state regulations, it is also important to make sure the following crucial components are in place:

TERMS OF SERVICE

Terms of Service (sometimes called Terms of Use) are a legally binding agreement between you and the end user of your website. In short, terms of service agreements will set rules that users must agree to in order to use, interact with and benefit from your website.

A well-written terms of service can prevent abuses by setting ground rules that prevent users from harming your company and other users via your website. For instance, in the unfortunate event that a user defames or otherwise uses harmful language via your website, you can ban such users from returning, or terminate a user’s personal account.

You can also use terms of service to inform users that you are the owner of all content contained on your website, and that users should not reproduce or distribute that content without authorization.

Perhaps the most important function of your terms of service is to limit your liability in the instance where your website includes errors, or where users are unintentionally harmed by relying on information contained on your website.

PRIVACY POLICY

A Privacy Policy details your company’s views and procedures regarding information collected from users. Most companies gather, use and even disclose automatically collected data and non-personally-identifying information such as web browser cookies, web beacons, geographical information, user-shared content, and payment information.

California and other states’ laws require all operators of commercial websites or online services using tracking software, or collecting any personally identifiable information, to conspicuously post a privacy policy. Personally identifiable information includes names, addresses, email addresses, telephone numbers, social security numbers, as well as other identifiers that allow a user to be contacted or identified. California also specifically permits website users to request and obtain information from your company concerning any personally-identifying information disclosed to third parties for direct marketing purposes.

A good privacy policy will outline how your company uses collected information internally and externally, and will specify what steps are taken to protect it. This forms a legally binding agreement between you and each user, and can shield you from liability related to misuse of user data.

A website is a powerful tool that needs to be properly honed.

James Marion

More About the Author: James Marion

James Marion is a California attorney specializing in intellectual property and business law.  He is the principal attorney at Law Offices of James P. Marion, Esq., which he founded in San Francisco in 2013 with a goal to bring his specialized services to the cannabis and entertainment spaces, as well as several other industries. Law Offices of James P. Marion, Esq. offers a comprehensive website review and compliance consultation, as well as customized drafting of terms of service and privacy policies.  Take the steps to make sure your website is working for you, not against you.

Visit His Website

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