As consumer purchases ramp up for the holiday season, a recent wave of class action law suits brings to light safety concerns over the use Cannabidiol (“CBD”) oil.
CBD is a chemical in the Cannabis sativa plant, also known as marijuana or hemp. In 2018, the Farm Bill permitted the sale of hemp-based products in the United States. However, the United States Food and Drug Administration (“FDA”) prohibits marketing CBD as a dietary ingredient for use in dietary supplements. Additionally, the FDA prohibits marketing any potential health benefits of the product. Proponents of CBD allege the product can be used to treat chronic pain, epilepsy, Parkinson’s’ disease, Crohn’s disease, and cancer.
Class action suits recently filed in California, Florida, and Massachusetts allege manufacturers have illegally marketed CBD based products as a dietary supplement and failed to accurately disclose the presence of THC, the active ingredient typically contained in marijuana. Specifically, these suits have alleged claims of Unfair Competition, False Advertising, Breach of Implied Warranty of Merchantability, Breach of Express Warranty, and Fraud under California, Florida, and Massachusetts’ law.
Whether these class actions law suits will succeed remains uncertain. Plaintiffs may not get past the class certification stage because the class plaintiffs have different legal claims and arguments. Thus, Plaintiffs may not be able to satisfy the “commonality” and “predominance” requirements of Rule 23 of the Federal Rules of Civil Procedure. For example, each Plaintiff’s reliance on the alleged false advertisements is likely separate and distinct. And, manufacturers may be able to successfully argue these cases should not proceed as a class action because individual questions of law or fact predominate over questions of law or fact common to the class based on alleged individual and distinct injuries suffered by consumers.
Based on regulatory uncertainty coupled with the increasing popularity and alleged health benefits of CBD products, many analysts now believe more class action suits will follow.