Business

“False and Misleading:” Suit Claims Select Vapes Contain Less THC Than Labelled

By Hilary Corrigan Jul 31, 2020
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A new class action lawsuit against Oregon cannabis company Cura CS LLC seeks more than $10M over claims that its Select Elite vape cartridges contained much less THC than labeled.

Portland, Oregon resident Brian Blackford sued Cura in Oregon’s Circuit Court for Multnomah County on July 23. The Portland company makes, sells, advertises, packages and distributes Select Elite THC cartridges.

The lawsuit claims Blackford bought many of Cura’s Select Elite branded THC vape products in 2019 and 2020. Before buying, he reviewed information about them and checked their labels and marketing materials, including their THC quantity. He “relied on these representations and warranties” in choosing Cura products over others, the complaint says.

But Blackford wouldn’t have bought them “had he known these representations were not true,” the complaint states. The suit argues that Blackford “paid a substantial price premium due to the false and misleading claims” on their purported THC content. But the products “do not contain anywhere near the quantities of THC advertised.”

The complaint gives little detail on Blackford, but said he would consider Select Elite products in the future “if Defendant filled the products with the amount of THC advertised.” Blackford’s attorney did not return requests for comment.

In an email, Cura parent company Curaleaf said it cannot comment on pending litigation, but said the lawsuit “is essentially the same case that was previously filed,” moved to federal court, then voluntarily dismissed by the plaintiffs. “They then refiled in Oregon state court, but limited to Oregon plaintiffs.”

A history of controversy

Cura has previously faced a penalty and lawsuit over additives and labeling of its products. It also has a history of controversy—including rape allegations against a former CEO, and receiving initial funding from a real estate scandal, an Oregonian investigation found.

Massachusetts-based multi-state operator Curaleaf bought Cura earlier this year, reportedly for about $400M, down from an initial announced deal price of $1B. Last week, Curaleaf closed a deal to acquire its competitor Grassroots. The acquired company faces a recent lawsuit of its own over how that deal was structured.

According to the new Oregon suit, the THC vape cartridges at issue “prominently advertise ‘80%-95%’ potency and/or 0.5g or 1g THC content total.” But independent lab testing results reveal “only a small fraction” of Cura’s representations. Cura’s Select Elite products contained only 55% THC, or 550 mg, despite promising 76.9%, or 769 mg, it says.

“The THC Claims are false and misleading,” the suit argues. It alleges that despite knowing this, Cura still advertised, labeled and packaged the products with those claims. And those who bought the products paid a premium price for falsely labeled products.

The suit notes an April 2020 letter the plaintiff’s attorney sent to Cura, laying out the complaint’s arguments. At the time, the plaintiff called for the company to stop breaching warranties and to refund money from those alleged breaches. It also called for Cura to recall its THC products and preserve all documents, tests, and other evidence related to the issues. It’s not clear whether Cura responded.

The lawsuit alleges breaches of warranty, unjust enrichment, fraud and violation of Oregon’s Unlawful Trade Practices Act. As a class action, it seeks to represent people who bought Select Elite THC products in Oregon. It asks for a jury to determine damages exceeding $10M.

Similar lawsuits possible?

The new lawsuit has caught the eye of industry insiders.

In a Thursday post at law firm Harris Bricken’s Canna Law Blog, attorney Jesse Mondry outlines problems Curaleaf and Cura have faced. Those include a U.S. Food and Drug Administration warning letter over Curaleaf’s CBD products and health claims it made about them. Another lawsuit alleged Curaleaf had made false statements to the investing public, and it was hit with a $250,000 fine over failing to disclose an ownership change to Massachusetts regulators.

Mondry’s post points out that the July 23 lawsuit landed the same day Curaleaf announced the closure of its Grassroots acquisition. He also raises the possibility of similar cases cropping up in other states where Select is sold. 

“One wonders if they’re having the same problems there,” Mondry said of other states. Any similar lawsuits in other states would need to test the products in those states, he wrote. 

In an interview, Mondry also wondered whether the suit may lead to further scrutiny by Oregon regulators. He highlighted the differential between the testing results mentioned in the complaint and the product label—55% compared to 76.9%.

“That’s kind of surprising to me,” he said of the spread, noting Oregon’s strict regulation of testing.

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