Nevada cannabis businesses have faced legal threats from consumer lawsuits, but recent federal court actions to halt several class-action lawsuits against cannabis companies might allow companies to breathe a sigh of relief. Consumers have filed numerous lawsuits against cannabis makers to allege that their products do not contain the amount of CBD claimed or that they contain a greater concentration of THC than described. These claims have primarily focused on the marketing practices of distributors and manufacturers of CBD products. However, several lawsuits have been stayed because of the lack of marketing regulations from the U.S. Food and Drug Administration.
Lawsuits Against Cannabis Companies
Plaintiffs’ lawyers across the U.S. have turned their attention to cannabis companies. Over the past year, an increasing number of consumer lawsuits have been filed against cannabis companies because of their marketing practices. The claims in these lawsuits focus on claims that CBD-infused products do not contain the amount of CBD they advertise, do not provide the claimed therapeutic benefits, or contain more THC than advertised. The FDA regulates manufacturers and distributors of CBD-infused products. However, the agency has not issued any regulations about how these companies market their products. Because of the lack of regulations, several federal courts have halted lawsuits against cannabis companies until guidance is provided by the FDA.
What Does the Halting of the Lawsuits Mean?
Since multiple courts have stayed actions against cannabis companies based on their marketing practices, the plaintiffs’ bar may be more hesitant to file these types of lawsuits. This might mean that cannabis companies may see a reduction in the number of lawsuits. However, once the FDA completes its rulemaking process and issues marketing regulations for how cannabis companies advertise their products, lawsuits will likely increase again, depending on what regulations are passed and how they will be enforced.
Cannabis companies should carefully review their marketing practices to protect themselves from litigation in the future. Companies may want to implement sound testing processes to correctly identify the concentrations of CBD and THC in the products they sell. They should also be careful of touting therapeutic benefits for their products that are unsupported by research. A cannabis law attorney might review the marketing efforts of a cannabis company to ensure that they will not expose the business to lawsuits in the future. When the regulations are issued, companies should ensure that their marketing practices strictly adhere to them.