Infinite Product Co: ‘A lawsuit based on CBD product labeling and marketing is particularly ill-suited for nationwide class treatment’

By Elaine Watson

- Last updated on GMT

Picture: Gettyimages-MysteryShot
Picture: Gettyimages-MysteryShot

Related tags Cbd hemp extracts Cannabis

Emboldened by a recent court ruling in Florida that stayed a CBD-related class action on primary jurisdiction grounds (ie. putting the case on ice until the FDA weighs in), multiple brands hit with similar lawsuits are now pushing for stays and referencing the court order in their court filings.

In a January 3 order granting a stay in Snyder et al v Green Roads of Florida LLC* (over alleged discrepancies between stated and actual CBD content in gummies and oils), US district court judge Ursula Ungard noted that the FDA is “actively considering​” how to regulate the CBD marketplace, and that it would be unwise for courts to make local determinations now as the relevant federal agency is poised to act.

She added that the FDA is “under considerable pressure from Congress and industry to expedite the publication of regulations and policy guidance regarding CBD products​.

Among other issues with which the FDA is concerned, are whether CBD products pose safety risks, how the mode of delivery affects safety, whether there are dosage considerations related to safety, whether there is a need for manufacturing standards, and whether there are standardized definitions for the ingredients in, for example, hemp oil.”

‘The FDA is poised to issue CBD regulations soon’

In court filings urging a judge in California to stay a lawsuit** arguing that it is selling illegal CBD products, attorneys for defendant Infinite CBD cite the Green Roads ruling: “As the Green Roads court correctly observed, the FDA is poised to issue CBD regulations soon.”

They added: “A lawsuit based on CBD product labeling and marketing is particularly ill-suited for nationwide class treatment.

“Not only is the FDA position evolving, but each state has a unique and widely disparate stance on CBD products under state law due to their individual authorities to regulate food safety within their own borders…

“Given that state regulation of CBD products is widely variable, lawsuits based on CBD labeling rules are not suited for nationwide class treatment. Furthermore, it will be impossible to determine what alleged statement and for what product each purported class member saw or relied upon and such complex variances necessitate striking class claims.”

Given the “highly uncertain and fluid state of this area of law​,” there is a “high risk that Defendant will be subject to conflicting legal obligations or directions imposed by this Court, the FDA and the various states," ​they argued.

Diamond CBD: Hemp extracts are not the same article as the isolated CBD used in drug trials

Lawyers representing Hemp Bombs and Diamond CBD - who are both accused of overstating CBD content on pack ***– have also pushed for a stay on primary jurisdiction grounds. (The former also argues that the lab testing by the plaintiff was “completely deficient​,” while the latter notes​ ​that current labeling legislation permits some variations for naturally occurring nutrients such as CBD.)

Lawyers for Diamond also make the case that the CBD-containing ‘full spectrum hemp extract’ in the Diamond CBD products is not the same as the isolated CBD used in some drugs.

The two drugs containing CBD to date - Epidiolex and Sativex -  are each highly concentrated solutions of CBD (and in the case of Sativex an equal amount of THC) made from an isolate and dedicated toward treatment of unique medical conditions, whereas Defendant’s CBD Product is offered only at radically lower concentrations and is not for the treatment or prevention of any disease.​​

“Thus, the CBD ingredient is a different article than the ingredient investigated and approved as a drug; therefore, the CBD ingredient used by Defendants is not excluded from being legally used as a dietary ingredient in a dietary supplement.”​​

A similar lawsuit**** vs Just Brands USA, Inc., Just Brands FL, LLC And SSGI Financial Services, Inc., has been voluntarily dismissed.

  •  *Snyder et al v Green Roads of Florida LLC 0:19-cv-62342
  • ** Dasilva v. Infinite Product Co., C.D. Cal., No. 2:19-cv-10148
  • ***Potter v Potnetwork Holdings, Inc., Diamond CBD, Inc., And First Capital Venture Co.,​​​ Case No. 1:19-cv-24017, filed in the U.S. District Court for the Southern District of Florida AND Ahumada v Global Widget LLC (d.d.a. Hemp Bombs) ​​Case No.​​ 1:19-cv-12005, filed in the US District Court for the district of Massachusetts, Sept 24, 2019
  • ****Gaddis v. Just Brands USA Inc., et al.​​​, Case No. 0:19-cv-62067, filed in the U.S. District Court for the Southern District of Florida.

Further reading: 

Several states expressly permit the sale of hemp-derived CBD ingestibles, including Alabama, Colorado , Florida, Indiana, Oklahoma, Rhode Island, Texas, and Utah, although regulations governing its manufacture and sale differ greatly. In Utah and Indiana for example, product labels must include a scannable bar code or QR code linked to a document containing the batch identification number, the product name, the batch date, an expiration date, and a link to the certificate of analysis for the specific batch.

The FDA provides “little guidance with respect to whether CBD ingestibles in all their variations are food supplements, nutrients, or additives, and what labelling standards are applicable to each iteration.”

US district court judge Ursula Ungard, southern district of Florida

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