Recalls & Product Holds

You're listening to HempDash Academy — practical compliance education for hemp retailers. Today's lesson: Recalls & Product Holds. What the Texas rules actually require when a product is recalled — who must have recall procedures, what to do when a recall notice reaches your store, and how your own holds differ from a DSHS embargo tag. In this lesson, you will learn: Know that written recall procedures are required at retail — and what they must cover at a minimum. Handle an upstream recall notice: pull, segregate, document, and follow the return or disposal instructions. Tell the three kinds of holds apart — your own hold, a recall, and a department embargo — and act correctly under each. Know what happens after detention: destruction, correction, and the retailer's notice-and-cure right. The short answer. Yes, recall duties reach your store. Under 25 TAC §300.207(a), all facilities engaged in the manufacture, processing, distribution, or retail sale of consumable hemp products must maintain written recall procedures — retail sale is in the list. Your procedures must describe the steps, assign responsibility, and at minimum cover identifying recalled products, immediately removing and segregating them from sale and active inventory, handling their return, holding, or disposal, and notifying the public about any hazards. The fuller recall plan — directly notifying customers of the product, running effectiveness checks, disposing of recalled product — is a separate duty in §300.207(b), and it applies to manufacturers, distributors, and processors, not retailers. Your job is narrower: have written procedures, and when a recall touches a lot you carry, execute them immediately. Who must have what under §300.207. The rule splits recall duties into two layers. Layer one, §300.207(a), is universal: everyone in the chain — including retail — must keep written recall procedures. The minimums are concrete: (1) identification of recalled products; (2) 'immediate removal and segregation of recalled products from sale and active inventory'; (3) return, holding, or disposal of recalled products; and (4) notification to the public about any hazards presented by the product. Note that 'immediate' is the rule's word, not ours — it is the only timing word in the section, and it attaches to getting recalled product off the sales floor. Layer two, §300.207(b), is the recall plan, and its actor list is 'manufacturers, distributors, or processors.' Their plan must include directly notifying the direct consignees of the product — including how to return or dispose of it — notifying the public about hazards, conducting effectiveness checks to verify the recall is carried out, and disposing of recalled product by reprocessing, reworking, diverting to a safe use, or destroying it. Those two layers meet at your receiving door: if the retailer is a direct consignee, the recalling manufacturer, distributor, or processor's recall plan must provide for direct notification, including how to return or dispose of the affected product (§300.207(b)(1)). The chapter doesn't define 'direct consignee.' One item deserves counsel's eyes before you rely on it: (a)(4) puts public-hazard notification in the list that reaches retailers, but the chapter never says what that looks like at store scale. The conservative posture: be ready to post a notice where affected customers will see it, and ask your attorney what your written procedures should promise. When a recall notice reaches your store. Here is what the rule text does not do: it does not script the moment the notice arrives. Chapter 300 contains no acknowledgment duty, no response deadline, and no requirement that a retailer report the recall to DSHS. What it does require is that your own written procedures already exist and already provide for immediate removal and segregation. So the practical playbook below is operating discipline built on §300.207(a) — labeled guidance, not quoted rule: Treat any recall notice — from a manufacturer, distributor, or in the press — as the trigger to execute your written procedures the same day. Identify the affected lot numbers from the notice. Pull every unit whose label batch number matches, from the shelf and the back stock. Segregate them, physically marked, away from sellable inventory. Follow the notice's return or disposal instructions — the sender's recall plan is required to include them. Confirm back to the sender what you pulled and what you did with it. And if a notice is vague about lots, hold everything plausibly covered until it's clarified: a recall you can't scope is a recall you honor broadly. Document all of it. Manufacturers and processors are expressly required to keep 'recalled product information' among their records (§300.203(d)(5)), and chapter records carry a three-year retention clock (§300.203(c)); retailers have their own three-year duty for test results (§300.303(f)). A retail recall log — date, lot, quantity pulled, action taken, final disposition — is guidance rather than a quoted retail rule, but it is the record that proves your procedures are real, and 'efforts to correct the violation' is an express factor in how DSHS sets penalties (§300.606(c)). Three kinds of holds — and the one you must not touch. A 'hold' at retail means three different things, and mixing them up is how stores get hurt. First is the self-imposed hold: your own decision to stop selling something — a COA mismatch surfaces, a recall notice arrives, product looks damaged or tampered with. This one is fully in your control: segregate it, mark it, log why, and decide its fate. The rule ground underneath is §300.303(a): a product that exceeds the acceptable hemp THC level or 'is adulterated in a manner harmful to human consumption must not be sold at retail' — the sale prohibition operates whether or not anyone from Austin ever visits. Second is recall execution — the §300.207(a) machinery above. It's a hold with a defined exit: return, disposal, or documented confirmation that your stock isn't covered. Third is the department's hold, and it is not yours. Under §300.603, DSHS must attach a tag or marking to an article it finds — or has probable cause to believe — is adulterated, misbranded so as to be dangerous or fraudulent, or in violation of specified Health and Safety Code provisions. That tag is a legal boundary: under the parallel statute (HSC §431.048), a detained or embargoed article must not be used, removed, or disposed of without permission from the department or a court. In practice: if an embargo tag appears on product in your store, you do not sell it, move it to the back, return it to the vendor, or discard it without authorization. Ask the inspector what is permitted, get instructions in writing, and leave the product where it is. One more distinction worth knowing: within Chapter 300, recalls are executed by businesses — the chapter gives DSHS detention, embargo, destruction, and penalty tools rather than an in-chapter recall-order power. But the statute the chapter hooks into does contain one: under HSC §431.0495, the commissioner may order a recall and require product moved to approved secure storage at the owner's cost, and §300.702(c) confirms the department may pursue enforcement under HSC Chapters 431 and 443. If an ordered recall ever touches your inventory, that is a call-your-attorney moment, not a routine one. After detention: destruction, correction, and your notice-and-cure right. Detained or embargoed product has three exits. The worst is destruction: the department may ask a court to order a sampled, detained, or embargoed product destroyed if it's found misbranded or adulterated — supervised by an authorized agent, at the claimant's cost, with a possible law-enforcement referral if the THC content meets the controlled-substance definition (§300.604). The second is correction: a court may release the product to the claimant for relabeling or reprocessing under department supervision, where 'the adulteration or misbranding can be corrected by proper labeling or processing' — again at the claimant's cost (§300.605). Third, quietly, is release: the tag comes off product determined to be compliant. Separate from the product's fate is yours. The department may impose administrative penalties for chapter violations (§300.606(a)) — but retailers get an explicit on-ramp first: 'The department must notify a retailer of consumable hemp products of a potential violation and provide the registrant an opportunity to resolve unintentional or negligent violations after being notified by the department' (§300.606(b)). That notice-and-cure provision is why your recall and hold paperwork matters so much. Penalty amounts turn on factors that include the seriousness of the violation, violation history, and 'the efforts to correct the violation' (§300.606(c)). A store that can show a same-day pull, a segregation photo, and a documented return is a store with a cure story. If a notice of violation does arrive, it must state the facts and the recommended penalty, and you have 20 business days from receipt to accept it or request a hearing before the State Office of Administrative Hearings (§300.606(d)–(i)) — another deadline that belongs in your written procedures. Red flags. Treat these as stop signs: Your store has no written recall procedures — §300.207(a) requires them at retail; this is the gap to close this week. A recall notice names your product but nobody can say which lots you received — that's a lot-traceability failure surfacing as a recall failure. Recalled or held product is still physically mixed with sellable stock — the rule's own words are 'immediate removal and segregation'. A supplier says 'just quietly pull it, no paperwork needed' — undocumented recall handling erases your §300.606 correction-efforts story. Anyone touches, moves, sells, or discards product carrying a department tag without written authorization — that violates the embargo itself. Staff impede or argue with an inspection — refusing entry, sampling, records access, or photos is itself a prohibited act (§300.602(3)–(4)). Held product drifts back onto the shelf without a documented reason for release. Here is a real-world example. Tuesday morning, a distributor emails a recall notice: one gummy SKU, lot GX-2026-0311, potential undeclared allergen, 'return for credit; do not destroy.' The store checks its receiving records and finds it took in two lots of that SKU — GX-2026-0311 and GX-2026-0347. Within the hour, every 0311 unit is pulled from the shelf and the back stock, boxed, taped, and marked 'RECALL HOLD — DO NOT SELL,' with a log entry: date, lot, 14 units, reason, action. The 0347 units stay on sale — the notice is lot-scoped, and their batch numbers don't match. The store emails the distributor: 14 units pulled, awaiting return instructions, and asks one question — 'Can you confirm 0347 is not affected?' The distributor confirms in writing; the answer goes in the log. Two weeks later the 0311 units ship back for credit and the log closes with the credit memo number. Total cost: an hour of labor and a shelf gap. Compare the store that 'thinks it sold out' of the recalled lot: it can't prove what it received, can't prove what it pulled, and if that lot later surfaces in a complaint or an inspection, it has no correction story to tell — and correction efforts are an express factor when DSHS sets penalties. Key takeaways. Written recall procedures are required at retail — §300.207(a) reaches 'retail sale,' and the minimums are identification, immediate removal and segregation, return/holding/disposal, and public-hazard notification. The recall plan (direct-consignee notification, effectiveness checks, disposal) is the manufacturer's, distributor's, or processor's duty under §300.207(b) — their notice must tell you how to return or dispose of affected product. Chapter 300 doesn't script the moment a recall notice arrives at a store — your own written procedures do. Conservative playbook: same-day pull by lot, segregate and mark, document, follow the notice's instructions, confirm back. Document every recall and hold action and keep it with your compliance records — three-year retention clocks run under §§300.203(c) and 300.303(f), and correction efforts are a §300.606(c) penalty factor. Your hold and a DSHS embargo tag are different things: your hold is yours to manage; a tagged article must not be used, moved, or disposed of without department or court permission. Retailers have a notice-and-cure right: DSHS must notify you of a potential violation and give you an opportunity to resolve unintentional or negligent violations (§300.606(b)) — and 20 business days to accept or contest a notice of violation. And finally, the checklist: Recall & hold readiness checklist. Written recall procedures exist, name a responsible person, and cover the four §300.207(a) minimums. Staff know the trigger: any recall notice = same-day execution, starting with a lot-number match against shelf and back stock. A marked segregation area (or labeled hold boxes) exists so recalled/held product is physically separated from sale and active inventory. Return, holding, and disposal steps are written down — default is 'follow the notice's instructions and get them in writing'. A hold log is in use: date, lot, quantity, reason, location, disposition, and who decided. Recall and hold records are retained with compliance records on the three-year clock. Everyone knows the embargo rule: product carrying a department tag is not sold, moved, returned, or discarded without written authorization. Held product returns to sale only with a documented release reason (matching COA arrived, lot confirmed unaffected, or written authorization). You've completed this HempDash Academy lesson. Test what you learned below, or see how HempDash can help put it into practice. This recording is educational information, not legal advice — rules change, so verify current requirements with DSHS and your attorney.