Georgia Seeks $150 Million in Damages in Federal Lawsuit Against Cannabis Brands

NEW YORK- In a significant legal challenge within the cannabis industry, the state of Georgia has initiated a federal lawsuit against prominent California-based cannabis brands STIIIZY and Cookies, along with several other entities. The suit alleges racketeering activities centered around the sale of marijuana products falsely marketed as legal hemp, with claims for damages amounting to $150 million.

Filed in federal court, the lawsuit accuses these brands and an additional 12 co-conspirators of misrepresenting marijuana products as federally compliant delta-8 hemp goods. This action, according to documents reported by Green Market Report, seeks to address the misleading of consumers, including Georgia residents like Hannah Ledbetter, into purchasing these products under the false pretense that they contain 0.3% delta-9 THC or less, adhering to the federal legal threshold for hemp.

The class action suit outlines a purported scheme involving the importation, manufacturing, distribution, and possession of illegal THC vape pens, labeled misleadingly as hemp products. It further alleges that third-party testing revealed delta-9 THC levels in purchased products significantly above the legal limit, indicating a deliberate attempt to circumvent federal regulations.

Entities implicated in this lawsuit span a broad spectrum, including retail chains, hemp manufacturers, distributors, and testing laboratories in California and Oregon. These organizations are accused of participating in the creation and distribution of falsified certificates of analysis, a tactic allegedly used to obscure the actual THC content of their products.

The legal filing posits that the defendants, including retail and online outlets, as well as testing labs, have accrued millions in profits through the sale of these illicit products. A representative for STIIIZY has labeled the lawsuit as unfounded, asserting the company’s readiness to defend its position vigorously. Cookies, on the other hand, has opted not to comment due to the ongoing nature of the litigation.

This lawsuit highlights the ongoing legal and regulatory challenges facing the cannabis industry, particularly the fine line between legal hemp products and illegal marijuana offerings in the aftermath of hemp’s federal legalization under the 2018 Farm Bill.

The case reflects broader concerns within the industry and among regulators about consumer deception and safety, exacerbated by the lack of stringent testing requirements for hemp products. This legal battle in Georgia, similar to previous actions taken by California against the sale of intoxicating “inhalable hemp products,” signals a growing trend of states seeking to regulate hemp products more closely, aligning them under cannabis enforcement agencies to safeguard consumers and ensure market fairness.

As the legal proceedings unfold, stakeholders across the cannabis sector, from product manufacturers to licensed business owners, are closely monitoring the outcome, which could set significant precedents for the sale and marketing of cannabis and hemp products in the United States.

Author: Mark Collins