(This story first appeared at Hemp Industry Daily.)
CBD product manufacturer and franchiser SunFlora has been accused of deceptive trade practices by several business partners in Pennsylvania, according to a new lawsuit filed against the company in federal court.
The suit, filed April 1 by Joseph Gradwell, Christopher Miller, Greg Muiter and Melanie Vaughan, alleges that the Florida-based company tricked them into signing documents in 2019 that made them “affiliates” instead of “franchisees,” a violation of both state and federal laws.
According to Law360, all four plaintiffs agreed to run Your CBD Stores – a national chain franchised by SunFlora – in western Pennsylvania but weren’t told that they’d be charged over-wholesale market prices for SunFlora-made products. That situation erased profit margins, the defendants alleged.
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The lawsuit further alleges that SunFlora retaliated when the plaintiffs considered selling other branded products and that the company threatened to terminate their franchise agreements.
The plaintiffs seek unspecified damages and a court order declaring the franchise agreements unlawful and unenforceable.