(This story has been updated to specify that one of the defendants does business as 3Chi.)
Companies connected to a prominent San Diego marijuana retail brand are suing 10 competitors that sell hemp-derived cannabinoid products, according to court documents obtained by MJBizDaily.
Noting that state law bans hemp-derived products that contain delta-8 THC, a lawsuit filed Sept. 14 in San Diego County Superior Court claims the hemp retailers are selling edibles, vape cartridges and other products that contain more THC than what’s allowed at state-licensed cannabis stores.
The defendants include the San Francisco Bay Area-based corporate parent of popular marijuana brand Cookies, which started advertising intoxicating hemp-derived products for sale via direct mail in 12 states earlier this year.
The plaintiffs are California-licensed marijuana companies – including retailers, manufacturers and distributors – that are all connected to well-known Southern California retail chain March and Ash, according to The San Diego Union-Tribune.
Named plaintiffs include March and Ash’s retail locations in San Diego and Imperial counties, according to court records obtained by MJBizDaily.
The plaintiffs also include Santa Rosa-based licensees Kind House Distribution and CRFT Manufacturing, both of which are affiliated with Northern California-based producer CannaCraft.
CannaCraft merged with March and Ash last year.
The popularity of hemp-derived products, which have flourished since passage of the 2018 Farm Bill, is responsible for the “downward spiral of the nascent legal cannabis industry,” the suit alleges.
The plaintiffs are seeking a court order blocking sales of the hemp-derived products in question as well as unspecified damages, including legal fees.
In addition to Cookies Creative Consulting & Promotions, the parent company of the prominent Cookies brand, the lawsuit names:
- Binoid.
- Cali Extrax.
- Canably.
- Cutleaf Stores.
- Delta Extrax.
- Hazy Extrax.
- Savage Enterprises.
- 3C dba 3Chi.
- Tre Wellness.
According to court documents, the plaintiffs are accusing the 10 competitors – some have brick-and-mortar retail locations in San Diego County – of having “brazenly flooded the California marketplace with these highly intoxicating and chemically synthesized Illegal Designer Drugs with the intention to evade and undermine California’s comprehensive system to control and regulate cannabis products.”
Since the hemp-derived source material must undergo a chemical process before it can become potentially intoxicating and thus marketable, the end products do “not qualify as a legal industrial hemp or raw hemp product” under California law, the lawsuit alleges.
The defendants have yet to file a response to the complaint, according to court records.
States across the country, including California, have sought to curtail hemp-derived cannabinoid products through restrictions or outright bans, but enforcement has proved difficult.
Chris Roberts can be reached at chris.roberts@mjbizdaily.com.
