Most famous Pot brand sued for selling vape pens in Georgia
A lawsuit filed earlier this month has put a spotlight on an ongoing loophole in the cannabis industry.
California’s pot companies have found a way to ship cannabis products across the country, injecting much-needed cash into the struggling industry. There’s just one problem: It might be illegal.
Earlier this month, Cookies and Stiiizy, two of the biggest pot companies in California, were hit with a class-action lawsuit in Georgia that accused them of breaking federal law by selling marijuana vape pens in Georgia. Nine other companies were also named in the civil suit. The plaintiff seeks $150 million in damages from the companies.
The lawsuit boils down to a 2018 change in federal law that legalized hemp nationwide. Companies are now selling hemp in states where they can’t sell marijuana, but what exactly separates hemp from marijuana is still hotly debated.
The 2018 change rewrote the legal definition of marijuana and created a new class of so-called “hemp-derived intoxicants” that can get users high. These products are often labeled with acronyms like Delta-8-THC or THCA cannabis and are sold at gas stations and mailed to consumers in states across the county.
Some of California’s biggest pot companies are taking advantage. Cookies, San Francisco’s most famous pot brand, advertises on its website that it will ship “THCA” cannabis to consumers in states like Arkansas and Alabama, where marijuana is illegal. Stiiizy, California’s largest pot retailer, is selling Delta-8-THC hemp vape pens in Georgia, according to this latest lawsuit. And Cann, the pot drink brand Gwyneth Paltrow owns a stake in, lists retail partners in Austin, Texas, on its website.
Cookies declined an SFGATE request for comment, citing ongoing litigation. A spokesperson for Stiiizy said in an emailed statement to SFGATE that the lawsuit’s claims are “baseless” and said the company would “defend ourselves vigorously against this meritless lawsuit.”
The federal government has largely stayed silent as these companies sell cannabis products across state borders, even as there’s active debate surrounding their legality. That’s made it more likely that civil lawsuits like the one in Georgia will be used by plaintiffs to enforce the law in the absence of the federal government cracking down, according to Hilary Bricken, a Los Angeles attorney who specializes in corporate cannabis matters.
“Many people have speculated for a long time that these plaintiffs’ lawsuits would begin to land around these other hemp-derived intoxicating cannabinoids because there’s no [federal] regulation,” Bricken told SFGATE.
This latest lawsuit in Georgia was primarily filed under the federal government’s RICO laws, which were originally created to punish organized crime. Pursuing these kinds of civil RICO cases is “extremely difficult” according to Bricken, although she said the plaintiffs do have the benefit of being individuals who might be seen as underdogs in the legal fight against multi-state brands.
“Juries love this stuff, big corporations hurting the little guy by selling illegal products,” Bricken said.
