Cannabis Processing and Manufacturing Operations

Solvents are often used for cannabis extraction. Common chemical solvents include butane, propane, ethanol, and isopropyl alcohol. Butane and propane are flammable gases and present fire and explosion hazards, which could emit toxic fumes and smoke and result in third-party bodily injury and property damage claims. Firefighting water or foam could create contaminated run-off that spreads to nearby storm drains or properties, resulting in environmental cleanup and tort liability.

Handling and storing ethanol and isopropyl alcohol can lead to spills that can migrate outside the building and enter storm drains or floor drains, potentially impacting a downstream municipal wastewater treatment plant. If these chemicals are discharged to surface waters, they could cause fish kills or impact water quality.

Cleaning storage tanks or processing equipment may generate wastewater or sludge treated by an on-site wastewater treatment system or discharged to a publicly owned treatment works (POTW) facility. Occasionally, wastewater and sludge are transported to a non-owned disposal facility. Releases or spills of wastewater could occur during cleaning, transport, or transfer from waste storage areas and create environmental risks. Improper disposal could lead to environmental liability or legal consequences for violating regulatory requirements.

Refrigerants may be used for flash freezing of cannabis. Nitrogen, ammonia, or halocarbons are common refrigerants and may be stored in compressed gas cylinders or pressure vessels, which can leak, presenting toxicity, asphyxiation, or fire and explosion hazards, which can result in bodily injury or property damage claims.

Toxic or hazardous air emissions can be generated at cannabis processing or product manufacturing facilities. Sources of air emissions include solvents use, boilers, vehicles, and power equipment. Lack of controls or permit exceedances can result in violations, fines, or third-party injury claims.

Cannabis has a pungent odor. If odors are not controlled at cannabis facilities, neighbors may file third-party suits. Courts have affirmed that claims based on odors emanating from a facility meet the pollution exclusion in the commercial general liability policy.

Stormwater may come in contact with fueling areas, storage tanks, cleaning chemicals, chemical containers, bulk product storage areas, or wastes and become impacted by petroleum hydrocarbons, particulates, or pollutants. If stormwater is not properly controlled, contained, or pre-treated before discharge into sanitary or storm drainage systems, it can pollute soil and groundwater or discharge pollutants directly into surface waters, impacting human health and aquatic systems.

Manufacturers/processors that extract cannabis oils may also remove significant amounts of plant waxes and fats, which still contain tetrahydrocannabinol (THC) and other cannabinoids and solvents. Other process wastes and byproducts, containers, absorbent materials, and mechanical components from equipment may also be contaminated with solvents and can qualify as hazardous waste. Manufacturers may also collect old vapes, cartridges, and batteries from distributors or retailers for recycling. Electronic waste from vaporizer cartridges and pens is considered hazardous. Mishandling or mismanagement of waste could lead to environmental liability or legal consequences for violating regulatory requirements. Manufacturers may also incur tort liability for the non-owned disposal facilities they send their waste.

To manufacture cannabis-infused food products, topicals, and other products, ingredients such as oils, milk, and citrus products may be transported, stored, and used on-site. Releasing these materials into surface water bodies can result in pollution incidents such as fish kills and impact water quality. Cleanup and natural resource damage claims can result.

Aboveground or underground storage tanks may store oils, solvents, other processing chemicals, or fuels for equipment or fleet vehicles. During loading or fueling operations, leaks or releases from storage tank systems could contaminate soil, groundwater, or surface waters.

Accidental releases during the transportation of fuels, chemicals, products, wastes, or wastewater from a cannabis operation due to improper cargo securement, a loose valve, or vehicle upsets or overturns can result in environmental liability.

Carbon dioxide may be used in the process to extract cannabis plant material. Carbon dioxide is an asphyxiant; therefore, it can present a physical injury hazard if released in an enclosed space.