The hemp-derived CBD market is a tough one right now. From uncertainty in when and how the FDA may begin regulating products, to the downturn in the stock markets as result of the coronavirus affecting the hemp industry, the problematic interim rules concerning hemp production and increasing state regulation, CBD companies face a plethora of issues in trying to turn a profit. Add increasing consumer class action litigation to the list – something we predicted several months ago.
Recently, Charlotte’s Web Holdings, Inc. (“CWB”) was served with a second consumer class action lawsuit alleging “multiple and prominent mislabeling” of certain products that “form a pattern of unlawful and unfair business practices that harm the public.” Benson v. Charlotte’s Web Holdings, Inc., No. 1:20-cv-00418 (N.D. Ill.) (You can read about the first consumer class action lawsuit against Charlotte’s Web here). This new lawsuit, filed in the Northern District of Illinois, focuses on two products, “Soothing Scent Hemp Infused Cream” and “Unscented Hemp Infused Cream” (the “Products”).
The gravamen of the complaint is that CWB markets the Products online and on the product packaging as containing a certain amount of hemp extract, but the Products actually contain an amount of hemp