Alert: Several Class Action Lawsuits in the CBD Industry

Several recently filed class-action lawsuits targeting CBD companies warrant attention this year, because the outcome could potentially have significant financial repercussions for the industry overall.

Late last year, two lawsuits were filed against industry giant Charlotte’s Web (produced by Colorado’s Stanley Brothers) and California-based CV Sciences. Plaintiffs in both suits allege that the companies—two of the most well-known in the CBD space today—engaged in “false, fraudulent, unfair, deceptive and misleading” marketing of their CBD products by claiming they were akin to supplements such as vitamins.

Two smaller CBD companies, Infinite CBD and Green Roads, are also targets of similar lawsuits. In all of the cases, plaintiffs want the companies to return all of the profits they’ve made selling these products.

A big part of the problem arises from a lack of clarity by the Food and Drug Administration, which currently interprets the relevant statutes to suggest that putting CBD in edible products creates an adulterated product.

This topic is particularly important for our clients who are selling directly to consumers, but all companies in the CBD supply chain should take notice. At Fortis Law Partners, we have a team of marijuana attorneys that have developed strategies to help mitigate this kind of potential risk. And our sister company, Full Velocity Consulting, has a compliance team that is expertly knowledgeable in reviewing marketing materials and packaging to diminish litigation exposure or regulatory action. Contact Henry Baskerville at hbaskerville@fortislawpartners.com for more information.

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