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CBD Products Illegally Marketed, Consumer Class Suits Say (1)

Dec. 2, 2019, 6:55 PMUpdated: Dec. 2, 2019, 11:10 PM

Charlotte’s Web Holdings Inc. and Infinite Product Co. have both been hit with proposed consumer class suits in California alleging they improperly market products made from cannabidiol—or CBD as it’s commonly known.

The suits follow November warning letters to Infinite and 14 other companies from the Food and Drug Administration cautioning them about illegal marketing of CBD products.

The suits allege that products made by both Charlotte’s Web and Infinite run afoul of FDA regulations and, consequently, violate California law.

Charlotte’s Web states on the packaging of CBD oils, CBD liquid capsules, and other items that the products are dietary supplements, Californian Michele McCarthy alleges.

But the FDA has said CBD may not be labeled as a dietary ingredient or legally be contained within a dietary supplement, according to McCarthy, who alleges she purchased CBD Oil in olive oil flavor for $254.77 from the company’s website.

Charlotte’s Web disputes McCarthy’s allegations.

“The Company believes that its products are accurately labeled and that the claims are without merit,” it said in a Dec. 2 statement. “The Company intends to vigorously defend itself against any such suits.”

Californian Adam DaSilva’s suit against Infinite Products, meanwhile, targets various products sold by that company, including “Freezing Point CBD Topical Cream” and “Afterglow Healing Oil 100 mg CBD Total.” Freezing Point CBD Topical Cream is touted as a painkiller and muscle relaxant, the complaint says.

DaSilva alleges Infinite made general marketing statements that CBD can alleviate some symptoms of autism, that cannabinoids have been found to inhibit the growth of cancer cells, and that, because of opioids’ addictiveness and painful withdrawal symptoms, people have moved to using CBD.

But products marketed for the mitigation or treatment of disease, or to affect the structure or any function of the body, are drugs that must be preapproved by the FDA, the suit says.

Causes of Action: Both suits allege violations of California Unfair Competition Law; California False Advertising Law; California Consumer Legal Remedies Act; Breach of express and implied warranties; and the state’s Declaratory Judgment Act.

Relief: Both suits seek an order enjoining the defendant from continuing the challenged practices and to commence a corrective advertising campaign; restitution; attorneys’ fees and costs; declaration that the defendant misrepresented the ingredients and effectiveness of the products and that their actions are unlawful; actual and treble damages.

Potential Class Size: Unknown number of individuals in nationwide classes or California subclasses.

Response: Infinite Product Co. wasn’t immediately available to comment.

Attorneys: Barbat, Mansour & Suciu PLLC; Kohn Swift and Graf PC; and Greg Coleman Law, PC represent the plaintiffs in both suits.

The cases are Dasilva v. Infinite Product Co., C.D. Cal., No. 2:19-cv-10148, complaint 11/27/19; McCarthy v. Charlotte’s Web Holdings, Inc., N.D. Cal., No. 5:19-cv-07836, complaint 11/30/19.

To contact the reporter on this story: Julie Steinberg in Washington at jsteinberg@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Steven Patrick at spatrick@bloomberglaw.com