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Diamond CBD Sued in Class-Action Lawsuit For Mislabeled CBD Products

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Florida CBD retailer Diamond CBD and its parent companies have been hit with a proposed class action claiming their products do not contain the advertised amounts of cannabidiol, and that they are cheating customers with their false and deceptive labels. A recent lawsuit filed on September 27 by Miamian Kathryn Potter, says Potter purchased $119.97 worth of CBD gummies from Diamond CBD’s website, which purported that each product contained anywhere from 150 mg to 550 mg of CBD, short for “cannabidiol.” The suit claims the actual amount in at least one of those products was far less, although it does not explain how the actual amount was determined.

 

Potter, a Miami resident, claims in Friday’s complaint that products purchased from Diamond CBD had “significantly lower” amounts of CBD than what was stated on their labels. Her complaint against Diamond and its parent companies First Capital Venture Co. and PotNetwork Holdings Inc. includes one count of unjust enrichment and one count of violation of the Florida Deceptive and Unfair Trade Practices Act.

 

“[T]he CBD industry has quickly become a billion-dollar-plus industry,” the lawsuit states. “Unfortunately, as is often the case with emerging industries subject to minimal regulation, the CBD market is ripe for exploitation by unscrupulous businesses, and it has been compared to the ‘Wild West.'”

 

“To the detriment of consumers, their products do not contain the promised levels of CBD,” Potter said. “Specifically, defendants misrepresent the amount of CBD contained in the products on the product labeling and packaging and they make the same misrepresentation on Diamond CBD’s website, where consumers can directly purchase the products.”

 

The complaint includes two proposed classes — one comprising Florida residents and one comprising U.S. residents — that purchased the company’s products for personal use “within the applicable statute of limitations period.” The proposed Florida subclass brought its claim under the state’s Deceptive and Unfair Trade Practices Act.

 

“Defendants’ unfair and/or deceptive acts were likely to deceive reasonable consumers, such as plaintiff and members of the Florida subclass, about the true nature of the products, which defendants manufacture, distribute and sell,” Potter said in her complaint.

 

Potter and the proposed classes are seeking damages, disgorgement, restitution, injunctive relief, attorney fees, and pre- and post-judgment interest.

 

Potter and the proposed classes are represented by Jeff Ostrow, Daniel Tropin, Jonathan M. Streisfeld and Joshua Levine of Kopelowitz Ostrow Ferguson Weiselberg Gilbert and Melissa S. Weiner and Joseph C. Bourne of Pearson Simon & Warshaw LLP.

 

The case is Kathryn Potter v. PotNetwork Holdings Inc. et al., case number 1:19-cv-24017, in the U.S. District Court for the Southern District of Florida.

 

A full copy of the Class Action Complaint can be found HERE.

 

The news on this suit was originally reported by Law 360.

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