A class action filed this month in California alleges that Bhang Corporation, a Florida-based medicinal chocolate maker, violated several state and federal laws by claiming that its chocolate products contained much greater amounts of tetrahydrocannabinol (“THC”) and cannabidiol (“CBD”) than they actually did, in order to charge consumers premium prices.
The complaint alleges that plaintiff Charles Ballard purchased Bhang Medicinal Chocolates from 2016 to 2018, which contained allegedly false, deceptive, and/or misleading product labels as to the amounts and/or levels of THC and/or CBD in the products. Independent lab testing commissioned by the plaintiff revealed that the amounts and/or levels of THC and CBD in the chocolate products were substantially less than as stated on the packaging and marketing materials.
The plaintiff alleged that the amounts and/or levels of THC and/or CBD are not only material, but the primary reason consumers purchase THC and/or CBD products such as these. Moreover, he alleged that the defendants knowingly misrepresented the amounts in the products to induce consumers to purchase them. The plaintiff further alleged that but for the false statements, representations, and warranties contained on the Bhang Medicinal Chocolates labels, packaging, and marketing materials, he and the class members would not have bought the chocolates or paid the premium price for the products.
The class action allegations include fraud, negligent misrepresentation and violation of California’s unfair competition and false advertising laws. The plaintiff and the proposed nationwide and California classes are seeking compensatory and punitive damages, prejudgment interest, attorney fees and court orders “to correct, destroy, and change all false and misleading labeling terms relating to defendants’ statements and representations.”
Takeaway: This proposed class action is the latest example in a plethora of recent false advertising class action lawsuits against CBD companies in federal courts in California and across the United States. The action underscores, as we have previously written about, the critical importance for marketers selling CBD products to accurately label, market, and advertise their products. Given that plaintiffs are sending products out to be tested, and because various state laws and the USDA interim final rule now affirmatively require that CBD products be tested, product makers should send their products to a reputable laboratory before marketing the products to consumers.