A federal racketeering lawsuit has been filed in Georgia against leading California Cannabis brands STIIIZY and Cookies, along with 12 other co-conspirators, for allegedly selling marijuana products mislabeled as federally-legal delta-8 hemp goods. The lawsuit, seeking at least $150 million in damages, was reported by Green Market Report, which obtained a copy of the legal filing.

The class action suit accuses the defendants of misleading consumers, including Georgia resident Hannah Ledbetter, into purchasing marijuana products under the guise of them being legal hemp products containing 0.3% delta-9 THC or less, the federal threshold for hemp.

The lawsuit alleges that the defendants engaged in a pattern of racketeering activity to import, manufacture, distribute, and possess illegal THC vape pens labeled as hemp. It claims that products purchased by Ledbetter from multiple retail chains in Georgia contained delta-9 THC levels far above the legal limit, according to third-party testing.

The suit implicates a wide range of entities in the scheme, including retail chains, hemp manufacturers, distributors, and testing labs in California and Oregon accused of issuing falsified certificates of analysis to mask the true THC content of the products.

STIIIZY and Cookies, along with other defendants including retail and online outlets and testing laboratories, are accused of generating millions in fraudulent profit from the sale of these illegal products.

In a statement to Green Market Report, a STIIIZY representative dismissed the lawsuit as baseless and said the company intends to defend itself vigorously. Cookies representatives declined to comment due to the pending litigation. The lawsuit underscores the complexities and legal challenges in the Cannabis industry, especially concerning the blurred lines between legal hemp and illegal marijuana products following the federal legalization of hemp in the 2018 Farm Bill.

Last August, California filed a similar lawsuit against several brands selling intoxicating “inhalable hemp products” without a Cannabis license within the state.

Many other states have recently moved to bring hemp products under the regulatory control of their respective Cannabis enforcement bodies, amid concerns about the issues of consumer deception and safety due to the lack of testing requirements for hemp products. Companies manufacturing these products, as well as licensed Cannabis business owners who view intoxicating hemp brands as illegitimate competition, will undoubtedly be awaiting the results of these lawsuits with much anticipation as they are set to test the legal boundaries of Cannabis sales and marketing in the United States.