Can You Sue a CBD Company for False Advertising? New Ruling Expands Consumer Rights

The CBD market has exploded in recent years, projected to reach $36.6 billion by 2033, with products ranging from oils and gummies to creams and even pet treats. But this rapid growth has outpaced regulation, leading to a surge in false advertising and mislabeling. As a consumer, you might wonder: “Can you sue a CBD company for false advertising?” The answer is increasingly yes, especially with new rulings expanding consumer rights.

The Wild West of CBD Advertising

The lack of strict federal oversight has created a “Wild West” scenario in the CBD industry. Unlike pharmaceuticals or traditional supplements, CBD products often lack rigorous testing and standardized labeling. This has led to several issues:

Mislabeled Products: Many products don’t contain the amount of CBD advertised, with some even containing undisclosed levels of THC, the psychoactive component of cannabis.
Unsubstantiated Health Claims: Companies often make false or misleading claims about CBD’s ability to treat serious conditions like cancer, heart disease, and Alzheimer’s, without any scientific evidence.
Contamination: Some products have been found to contain heavy metals, pesticides, and other contaminants.

According to a survey by the Consumer Brands Association, a staggering 92% of American consumers incorrectly assume or have no idea if CBD is federally regulated, highlighting the urgent need for clarity and consumer protection.

The Legal Landscape: FDA and FTC to the Rescue?

While the legal status of CBD remains somewhat murky, the Food and Drug Administration (FDA) and the Federal Trade Commission (FTC) are starting to crack down on deceptive practices.

FDA Regulations: The FDA has the authority to regulate CBD products, but it has been slow to establish a clear regulatory framework. The FDA prohibits adding CBD to food, beverages, or cosmetics, or selling it as a dietary supplement. The FDA requires food ingredients to be proven safe, and they have not found sufficient information showing how much CBD can be consumed safely. The FDA has issued warning letters to companies illegally selling foods with CBD, including products appealing to children or those that may be mistaken for traditional foods.
FTC Enforcement: The FTC is responsible for enforcing truth in advertising laws. The FTC has taken action against CBD companies for making false or unsubstantiated health claims, including claims that their products can treat serious diseases. In 2020, the FTC launched “Operation CBDeceit,” targeting six CBD retailers for deceptive marketing. In one case, Kushly Industries LLC and its officer Cody Alt were prohibited from making unsubstantiated claims about the health benefits of CBD products.

New Ruling Expands Consumer Rights: SCOTUS Opens the Door

A recent U.S. Supreme Court decision has significantly expanded the legal recourse available to consumers harmed by mislabeled CBD products. In Medical Marijuana, Inc. v. Horn (2025), the Court ruled that a commercial truck driver, Douglas Horn, could seek treble damages under the Racketeer Influenced and Corrupt Organizations Act (RICO) for financial losses resulting from a mislabeled CBD product.

Horn used a CBD product marketed as THC-free, but it contained enough THC to cause him to fail a drug test, leading to his termination. The Court’s decision allows Horn to pursue his claim, establishing that RICO permits plaintiffs to recover damages for business or property losses, even if those losses stem from personal injuries.

This ruling has major implications:

Broader Scope of Legal Recourse: It allows individuals who suffer economic harm due to misleading CBD product claims to seek significant damages.
Cautionary Tale for Drivers and Fleets: It reinforces the risks associated with CBD product use for commercial drivers, who are subject to strict drug testing regulations.
Increased Scrutiny of CBD Labeling: It highlights the lack of stringent regulation in the CBD industry and the difficulty for consumers to trust product labeling.

Can You Sue? Grounds for a CBD Lawsuit

So, under what circumstances can you sue a CBD company for false advertising? Here are some potential grounds for a lawsuit:

False Advertising: If a company makes false or misleading claims about the CBD content, health benefits, or ingredients of its products, you may have a claim for false advertising.
Mislabeling: If a product is mislabeled and does not contain the amount of CBD advertised, or if it contains undisclosed ingredients like THC, you may have a claim for mislabeling.
Product Liability: If a CBD product is contaminated or defective and causes you harm, you may have a claim for product liability.
Breach of Contract: If you purchased a CBD product based on certain promises or guarantees, and the company fails to deliver on those promises, you may have a claim for breach of contract.
Fraud and Misrepresentation: If a company deliberately provides false or misleading information to induce you to purchase their products, you may have a claim for fraud.

Steps to Take If You’ve Been Harmed

If you believe you’ve been a victim of false advertising by a CBD company, here are some steps you can take:

Document Everything: Keep records of your purchases, including receipts, product labels, and any advertising materials.
Test the Product: If possible, have the product independently tested to verify its CBD content and check for contaminants.
Seek Medical Attention: If you’ve experienced any adverse health effects, seek medical attention and document your symptoms.
Consult with an Attorney: Contact an attorney experienced in consumer protection and CBD law to discuss your legal options.
File a Complaint: File a complaint with the FTC or your state’s attorney general’s office.

The Future of CBD Regulation and Litigation

The legal landscape surrounding CBD is constantly evolving. As the FDA and FTC increase their enforcement efforts, and as new rulings like Medical Marijuana, Inc. v. Horn expand consumer rights, CBD companies will be held to a higher standard of accountability.

Several pieces of legislation have been introduced to create potential pathways for CBD regulation. The Hemp and Hemp-Derived CBD Consumer Protection and Market Stabilization Act of 2023 would make hemp-derived CBD lawful for use as a dietary supplement, while the CBD Product Safety and Standardization Act would direct the FDA to regulate CBD as it would for other food ingredients.

Advice

If you’re considering using CBD products, do your research and choose reputable brands that provide transparent lab results and accurate labeling. Be wary of companies making outlandish health claims, and always consult with your doctor before using CBD, especially if you have any underlying health conditions or are taking other medications.

If you’ve been harmed by a CBD product due to false advertising or mislabeling, don’t hesitate to seek legal advice. You may be entitled to compensation for your injuries and losses. Contact our firm today for a consultation.