Online vape retailers, manufacturers, and labeling laboratories are at the center of a proposed class action lawsuit, which claims that consumers were misled into purchasing vape pens containing levels of hemp-derived delta-9 tetrahydrocannabinol (delta-9 THC) that exceed the legal threshold.
The lawsuit, initiated by lead plaintiff Hannah Ledbetter, asserts that she bought delta-8 vape pens from Cloud 9 Online Smoke & Vape LLC under the impression that the product labels accurately represented their contents. This case was brought forth on Tuesday to the US District Court for the Northern District of Georgia.
According to the legal filing, Ledbetter had the purchased vape pens subjected to laboratory analysis, which purportedly revealed that the actual THC content far exceeded the amounts stated on their labels, showing a delta-9 THC concentration higher than the legally allowed limit of 0.3 percent on a dry weight basis.
Backdrop of the Vape Class Action Lawsuit
In recent years, the landscape of the cannabis industry in the United States has witnessed significant changes, particularly with the rise of delta-8 tetrahydrocannabinol (D8 THC) within the commercial hemp sector.
This shift has been largely fueled by the Department of Justice’s (DOJ) willingness to look the other way. This leniency has opened the floodgates for substantial investments, attracting hundreds of millions of dollars and thousands of new consumers to the burgeoning D8 THC market.
Still Illegal…
But the law… it has not changed. But the premise of this class action is that the DOJ’s stance has not altered the legal status of cannabis under the U.S. Code, nor has it invalidated the rights of individuals to seek judicial enforcement of federal laws. Cannabis remains as illegal under the Controlled Substances Act (CSA) as it was at the time of its enactment, emphasizing the unchanged legal landscape despite shifting enforcement priorities. This lawsuit beats the defendants over the head with this fact.
Given this context, this new lawsuit argues that there is a compelling argument for holding those who market their products as medicinal cannabis to stringent production and labeling standards. This is crucial to ensure that such products comply with legal thresholds, particularly the critical limit of 0.3% delta-9 THC (D9 THC) by weight.
Falsely Labeled
Transactions involving cannabis products that exceed this legal limit constitute illegal activities under both state and federal law, warranting the forfeiture of profits derived from such transactions. This legal principle underscores the ongoing lawsuit, where the plaintiff alleges having purchased products that contained higher levels of D9 THC than legally permitted and that were falsely marketed as compliant with federal standards.
D9 THC – Unknowingly Exposed to Illegal Substances
Delta-9 THC is known for its psychoactive properties, typical of marijuana, whereas delta-8 THC, although also psychoactive, is derived from hemp and not classified as a controlled substance at the federal level. The suit emphasizes that while hemp-derived delta-9 THC is permissible in products to a maximum concentration of 0.3% by weight, the products in question allegedly contained illegal levels or forms of delta-9 THC.
So the core of this lawsuit is the defendants of deceiving consumers by marketing products with assurances that they contained less than 0.3% delta-9 THC derived from hemp by dry weight and specific quantities of delta-8 THC or other cannabinoids as indicated on the labels.
Consumer Protection Issue with D9 THC
The lawsuit highlights a significant consumer protection issue, focusing on the misleading marketing and sale of D8 THC vape pens by various defendants, including retailers like Cloud 9 and Xhale City, which operate across multiple states. These entities are accused of falsely representing their products as containing no more than 0.3% hemp-derived D9 THC by weight, a claim purportedly contradicted by subsequent product testing. Such misrepresentations, including inaccurate certificates of analysis (COAs), not only breach the trust between consumers and companies but also pose legal and ethical concerns by potentially exposing consumers to illegal substances unknowingly.
So the plaintiffs reliance on these false representations led to the purchase of products believed to be legally compliant, a decision these lawyers contend would not have been made had the truth about the THC content been disclosed.
RICO Counts
RICO allegations make you think of prosecuting mob bosses. But that is exactly what we have here. The legal action brings forth allegations under the Racketeer Influenced and Corrupt Organizations Act (RICO) and the Georgia state RICO Act.
Under the RICO statute, “racketeering activity” encompasses numerous state and federal crimes, notably including drug-related offenses punishable under federal law. This includes the cultivation and sale of marijuana, which is recognized as racketeering activity. The defendants are said to have colluded, with the aid of their banks, accountants, lawyers, and suppliers, to commit multiple crimes under the Controlled Substances Act (CSA), constituting a breach of 21 U.S.C. § 856 and a conspiracy under 21 U.S.C. § 846 aimed at promoting the illicit D8 vape pen business.
The lawsuit delineates two specific RICO (Racketeer Influenced and Corrupt Organizations Act) classes. The first class includes individuals who purchased D8 vapes from Stiiizy LLC, Savage Enterprises, L&K Distribution, and Cookies through retailers such as Cloud 9, Element, Xhale City, and Xhale Franchise within the four years leading up to the lawsuit’s filing.
The second class mirrors the first in terms of the purchase criteria and timeframe. The vast number of class members renders individual joinder impracticable, underscoring the necessity for a class action approach.
The lawsuit – which also has charges of both negligent and intentional misrepresentation, as well as unjust enrichment – seeks to obtain class action status, along with declaratory and injunctive relief, compensatory damages, disgorgement or rescission of profits, and coverage for attorneys’ fees and legal costs.
- Proof needed to file a class action lawsuit