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The Jeeter lawsuit: What’s next?

By Alex Halperin
Nov 4, 2022
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If a proposed class action lawsuit alleging false advertising at a leading pre-roll brand gains traction, it represents a significant threat to licensed cannabis businesses, three lawyers told WeedWeek. The complaint, filed last month by two consumers against the California manufacturers of Jeeter prerolls, alleges the company “systematically overstat[es] the THC content to deceive consumers into thinking that the effects of their prerolls are more potent than they truly are.”

Jeeter has called the allegations “baseless and ridiculous” and said it looks forward to the truth coming to light.

With many consumers looking for the most THC for the lowest price, potency inflation is widely acknowledged to be a problem in several legal states. A recent lawsuit alleges a potency inflation conspiracy in Arkansas.

“It’s not only. the other labs,” Robert Martin, co-founder and former CEO of Oakland lab CW Analytical, which closed last December after 13 years, told WeedWeek. Potency inflation “is being perpetrated from cultivator to labs, to distributors, to retail with all parties knowingly selling incorrectly labeled cannabis.  My clients asked me directly to inflate the numbers and when I declined they told me they were going elsewhere to get the numbers they want.”

The Jeeter suit cites potency inflation data from tests conducted by WeedWeek. We tested nine preroll products – two from Jeeter – made by seven brands and found all nine labeled more than 10% above the tested THC content. California regulators permit a 10% margin of error. 

  • WeedWeek’s test made clear that it was not adequate to draw conclusions about any individual product or brand.

Disclosure: After the complaint was filed, WeedWeek received a letter from a lawyer representing defendant Dreamfield Brands demanding that we preserve documentation in light of potential future litigation. The letter alleged that “there is an issue regarding the circumstances in which testing was performed on the several Jeeter products and statements and accusations made by your publication about the knowingly flawed testing.”

  • WeedWeek’s response: The allegation has no merit. The test the defendant’s lab disputed was not flawed, and its result was consistent with three other tests on Jeeter products. 

“Follow the legal breadcrumbs”

In its approach, the Jeeter case resembles several recent suits filed against food companies for false advertising, lawyers said. The case’s merits depend at least in part on whether the plaintiffs can prove the labels were incorrect.

  • The plaintiff’s law firm Dovel and Luner boasts of a trial win rate above 85% and that “We get paid only for success.” 
  • “These guys are good lawyers,” Andrew Cooper, counsel at Falcon, Rappaport, Berkman, said. “They are also opportunistic…  they take business litigation matters on a contingency fee, which while a growing model, is still uncommon.  So they are good at assessing risk since it is all theirs if they take a case.”

“It is impossible to tell whether this is a strong case or not at this time,” Robert Finkle, managing partner at Armada Law Corp. said.  If the plaintiffs can prove their case, however, “the potential exposure to liability is astronomical” given Jeeter’s reported sales volume of 3.5M California prerolls a month.

“Once class-action lawyers identify a type of case in which they see potential value, they will follow the legal breadcrumbs so to speak – and continue to pursue others for the same issue,” Jodi Green, Long Beach-based special counsel at Miller Nash said.“This should serve as a wake-up call to all brands” Green said, to work with well-vetted partners, and take independent steps to verify compliance with advertising and labeling laws to minimize potential exposure.

  • “All parties in the supply chain [including labs] who may have been involved in false advertising are potential targets,” Finkle wrote.
  • Bigger brands have “bigger targets on their backs,” Cooper wrote.

Industry trade groups U.S. Cannabis Council and National Cannabis Industry Association declined to comment.

Does it matter?

It’s too early to tell what, if anything, the threat of litigation means for the THC percentages consumers see on packaging.

Tyler Williams, founder and Chief Technical Officer at CSQ, a developer of certification standards for various industry operations said three things could help combat the problem:

  1. Standardized testing methods,

  2. Regulators making spot checks on labs

  3. A reporting system to allow labs to report lab shopping and pressure tactics by brands or manufacturers.

The idea of standardized testing methods has been downplayed by some who say the inflated results are the result of bad actors, not a dispute over methods.

However, Darwin Millard, a manufacturing and extraction expert who calls himself the Spock of Cannabis, agreed about the benefits of standards. It is good for business. No one trusts the labs, so if the labs can say they are using standardized test methods, then the burden of proof shifts from them to the standards development body that created the test methods,” he wrote. “The only labs not in favor of this have a vested interest in maintaining their “proprietary” test methods.

Trent Hancock, a co-founder at Oregon-based Creswell Organics and a lab reform activist has called for more far-reaching reforms.  In a September article for Ganjapreneur he argued, “The current ‘chain of custody’ for samples being tested is completely compromised because the growers and processors determine which product is sampled, and which products go to dispensaries under that test result.” (Hancock has been complimentary about WeedWeek’s reporting.)