The production and retail sale of marijuana is a new, burgeoning industry that faces numerous issues for those involved in the construction and ownership of marijuana facilities.
The one issue that impacts perhaps all others is federalism: While states have decriminalized marijuana use and production, it remains a federal crime. The consequences flowing from the federal prohibition remain significant, as concerns about violating federal law have impacted banking, insurance, and other basic professional services necessary for marijuana businesses to function.
Design Challenges
Special design issues of the marijuana industry represent another challenge. The decriminalization of marijuana occurred somewhat unexpectedly, and building, fire, and zoning regulators have struggled to identify risks and develop code provisions to ensure public safety.
The typical marijuana business model has three components: a dispensary, where the marijuana is sold; a “grow” facility, where plants are seeded, grown, and harvested; and infusion/production facilities, where THC is extracted for use in edibles and other products. Each component has its own set of risks.
Dispensaries are not unlike many retail storefronts. Because the sale of marijuana is not legal under federal law, many dispensaries operate on a cash basis; patrons cannot use credit cards or write checks. Recognizing the problems created by having a retail outlet that has large amounts of cash on the premises, municipalities have enacted code requirements to mitigate the risks associated with dispensary outlets, including video surveillance and alarms. However, crime remains a significant problem.
Plant-cultivation locations also have safety concerns. The hazards in a “marijuana grow” are different from those in common greenhouses, and communities are now frequently classifying grows as F1 occupancies. The F1 occupancy classification is based on the risks of fumigation operations, carbon dioxide (CO2) enrichment, carbon monoxide risks, maze-like room layouts [exit access], high electric demand, and potential impact on neighboring tenants.
After marijuana is harvested, it is frequently processed to create a concentrated form of tetrahydrocannabinol (THC), the principal psychoactive component of the marijuana plant. The concentrate is then used in oils, vapes, and edibles. There are several different processes used to create concentrate, all of which have some risk:
- Fire and Explosion. Breaking the THC from the plant is accomplished by several different processes, all of which have some degree of hazard. Municipalities have imposed requirements on marijuana-extraction facilities and grow facilities to reduce the risk of fire and explosion. Overloaded electrical wiring has also caused fires in some marijuana grow facilities.
- Worker Safety. At marijuana grow facilities, workers may be subjected to chemical exposure from fertilizers and pesticides. Of particular concern is sulfur and CO2 fumigation. CO2 fumigation to control pests is often at levels above OSHA’s “immediately dangerous to life or health level.” Another fumigant, sulfur dioxide, can create sulfuric acid in the presence of moisture. If inhaled, the acid can burn the respiratory tract. Worker safety, adjacent tenants, and first responders are all potentially at risk.
- Damage to Real Property. The environment created for a grow room can cause damage to structures built for other enterprises. Effective grow rooms operate at temperatures between 75º and 85°F, and with relative humidity [RH] values between 60 and 65 percent. The high levels of RH can lead to condensation on building components. As a result, a poorly designed grow facility can produce an ideal environment for the propagation of biological growth (mold) and an increased likelihood of building-material deterioration. Health issues from poor indoor air quality are also a concern.
- Sanitation. To avoid sanitation issues, grow rooms need floor drains to remove spilled water and nutrient solutions. The drains require traps and screens to catch any plant material or other debris. Water supply lines used for irrigation purposes need backflow preventers to protect the domestic water supply from contamination. Environmental contamination is a common problem for these types of facilities.
- Electrical. Grow facilities have a very high electrical demand due to grow lights, air conditioning units, and other equipment. To meet this demand and avoid power outages, electric utility companies frequently need to upgrade the conductors and/or transformers serving the building to avoid power outages and fires.
- Product Liability. Contamination of the marijuana product is a valid concern and significant risk. Robust humidity can lead to property and product damage from mold on the walls and the structure, and also to the growth of pathogenic organisms on the product. Plants may contain trace amounts of pesticides or mold, potentially exposing the entire chain of distribution—the grower, test lab, and retailer—to product liability suits. At present, adulteration of edibles with other illicit substances is a concern, compounded by inadequate testing for contaminants. Further, the quality and quantity of THC in an edible is not standardized, and consuming multiple servings in a short amount of time can lead to unusual reactions that can trigger unwanted psychological reactions. The risk is not only to the producer, but also to design professionals, predicated on the theories of implied warranty and strict liability.
- Nuisance. The common law of nuisance poses liability concerns. Common-law nuisance is available to private plaintiffs. There are two kinds of nuisance—private and public. Private nuisance is an interference with the use or enjoyment of land that causes injury in relation to an ownership right in that land. A public nuisance is defined as an unlawful act or omission that is so widespread in its effect that it obstructs, damages, or inconveniences the rights of the community. Both claims may be valid. Odor, health risks, traffic, and sanitation are all nuisance issues. Environmental contamination of real property can give rise to liability in nuisance, and a producer and its construction team may also be liable for environmental clean-up under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA).
While there have been significant strides made in the technical aspects of marijuana facility safety, issues regarding legal and business questions appear to be in limbo and will continue to receive only tenuous resolution until the federalism issue is resolved. Overall, while marijuana is a growth industry going forward, the potential liabilities remain.