Class action suits rise against CBD companies, experts stress forthright disclosures

Our Take: If a CBD company makes any sort of health claims… STAY AWAY. The FDA doesn’t allow it. It’s also why we have our Empty Bottle Guarantee.

Hemp-derived CBD companies increasingly face class action claims by consumers and stockholders, driven by industry growth, product claims, regulatory uncertainties and preventable mistakes by the companies themselves.

Companies can reduce their exposure by being more transparent and forthright when disclosing their financials, the potential of their products and other relevant information, legal experts say.

A U.S. Food and Drug Administration warning letter against a CBD company for making an unfounded health claim, for example, “is almost an invitation to a plaintiff’s lawyer to file a class action suit,” said Oregon cannabis attorney Jesse Mondry, co-chair of Harris Bricken’s dispute resolution/litigation practice group.

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