Someone is suing these hoe ass labs for telling lies on the results.
Rico lab testing case.
Sounds pretty serious.
It isn’t only about Steep Hill. The plaintiffs are going after Steep Hill, the growers, their attorneys, banks, etc.
The Plaintiffs are seeking monetary reward, but they also want all Defendants to be enjoined (shut down) from continuing operations and for federal cannabis laws to be enforced. It’s a much bigger deal than just trying to get Steep Hill.
The main issue I see is this could be a template for antis to attack the industry. It is giving fodder to anti politicians and anti judges.
I have two theories:
The plaintiffs are antis, and their main goal is to shut down cannabis in Arkansas. They are probably hoping antis in other states file similar lawsuits with the ultimate goal of killing the cannabis industry nationwide. Including the ancillary businesses that work with plant touching companies (like banks and attorneys).
It’s a money grab because there are so many holes in this lawsuit it could be used to strain spaghetti. However, this theory is less likely because Plaintiffs are seeking three times their damages (what they paid for cannabis) or “disgorgement to their property,” meaning the profit Defendants made through the sale of cannabis to Plaintiffs. So they would not get a windfall unless the jury (if it is not settled out of court) awards the Plaintiffs significant compensatory and punitive damages (which is unlikely).
Some issues with the lawsuit and examples of its shoddy nature are:
They chose the wrong attorney who isn’t an expert in this field
They claim they were “prescribed” medical cannabis by a doctor. In the US, it’s illegal for a doctor to prescribe cannabis because it’s a schedule 1 drug; they can only recommend its use.
The Plaintiffs claim the THC content of the cannabis they purchase was, on average, 25% below the tested concentration (as reported by Steep Hill testing). Yet there’s a variance allowed in the potency, which I believe is +/- 10% in most states.
The Plaintiffs state they had samples tested in a lab other than Steep Hill, yet they don’t list the analytical methods nor those used by Steep Hill.
The Plaintiffs don’t state the mfg date of the samples, duration between the purchase of samples and testing, or how samples were stored. It’s not unreasonable to assume >15% degradation of THC due to storage conditions and sample age.
The Plaintiffs (probably) lack a chain of custody. At least they didn’t state they have a chain of custody; if they did, I assume they would have mentioned so. Without a chain of custody, Plaintiffs can’t prove the samples they sent to the lab are the same ones they purchased from the dispensary.
Plaintiffs claim “Premium” cannabis is only different from “Regular” cannabis by % THC, which is ludicrous.
Many other points.
Plaintiff seeks redress under RICO, which requires those who engage in racketeering activity-including the commercial production of marijuana-to pay those they injure treble damages, costs, and attorneys’ fees. Each Plaintiff also seeks an injunction under RICO directing the marijuana operations defrauding Plaintiff and the Class to stop violating the federal drug laws
Each Plaintiff is in chronic pain who has been prescribed medical marijuana by a physician.
Steep Hill Inc. (CSE: STPH) is the world’s leading cannabis science and technology company focused on laboratory testing, quality assurance and data analytics.
- Steep Hill Arkansas
- Natural State Medical (grower)
- Bold Team LLC (grower)
- Osage Creek Cultivation (grower)
- Defendants John Doe 1-5 are the law firms, accountants and financial entities who have assisted Defendants in operating the criminal enterprise alleged herein and will continue to do so in the absence of injunctive relief
- Defendants 5-10 are the financial institutions who have assisted Steep Hill and the Osage, NSM AND BOLD in operating the criminal enterprise alleged herein
Plaintiffs and the Class purchased marijuana cultivated by Osage, NSM AND BOLD and certified by Steep Hill as having a certain percentage of THC to address his chronic pain, as his physician suggested. Plaintiffs noticed that some marijuana was more potent than others, despite being labeled as having similar amounts of THC. So, Plaintiffs had some marijuana tested. The tests revealed that the cultivator Defendants routinely sell marijuana that has been falsely labeled to the Plaintiff and the Class by overstating the amount of THC by an average of 25%.
The Cultivator Defendants sell marijuana with different types and amounts of THC. More THC in a marijuana sample equates to a higher price and more profit for the Defendants. In essence, the Plaintiff and the Class are paying for a higher grade of marijuana but are in fact receiving a lower grade of marijuana which has created millions of dollars of fraudulent profit. This is a damage to Plaintiff and the Class’s property…So, Steep Hill, in conspiracy with Steep Hill, the cultivators and John Doe Defendants have misrepresented the amount of THC in the marijuana Plaintiff brought.
Steep Hill overstated the amount and type of THC contained in the marijuana by approximately 25% on the average. Inflation reached as high as 52% for one sample.
CLAIMS FOR RELIEF
The racketeering activities of Defendants directly and proximately injured the Plaintiff and the Class’ property by selling them “Regular” marijuana for a much higher “Premium” price, which approximates $10.00 per 1/8 ounce
The racketeering activities of Defendants directly and proximately injured the Plaintiff and the Class’ property by selling them “Regular” marijuana for a much higher “Premium” price. Samples were inflated on average by 25%. Defendants inflated THC values for commercial gain and to mislead Plaintiff and the Class, who could not know what was truly in the product.
The racketeering activities of Osage, NSM AND BOLD and John Doe 1-10 directly and proximately injured the Plaintiff and the Class’ property by a baiting and switch scheme such that Defendants should disgorge their profits into a common fund.
Each Plaintiff individually sues Defendants for fraud and violation of the Arkansas Deceptive Trade Practices Act. Each Defendant aided and abetted the fraud perpetrated on the Plaintiff, such that each Plaintiff is entitled to judgment against one or more Defendants. Each Defendant defrauded one or more Plaintiff by selling one or more Plaintiff a product that contained less than D9 THC by weight as advertised
The misrepresentations of Defendants and John Doe 1-10 directly and proximately injured each Plaintiffs property such that each Plaintiff should receive damages for his purchase price. Defendants have been so reckless so as to justify the imposition of punitive damages.
PRAYER FOR RELIEF
(a sample of the relief requests)
Awarding the Plaintiff and the Class three times the damages or disgorgement to their property that was caused by the RICO Defendants’ racketeering activities;
Enjoining the RICO Defendants from continuing to engage in racketeering activities to enforce strong federal policy that seeks to reduce the cultivation and distribution of medical marijuana through a complete prohibition on those activities.
Award Plaintiffs compensatory and punitive damages in amount to be determined by a jury;
The reality many aren’t facing. They’ve never faced a judge, or a jury. Licensed or not. You play with fire you can get burned.
What does the term “antis” mean to you, bud?
Anti + plural?
FWIW, there is an active investigation by the PA inspector general’s office into PA testing practices which specifically revolves around Steep Hill. They have 80% of the market share in the state and there have been some suggestions how they got there…
Very true. And getting many defendants to agree to settle could be difficult, let alone what discovery could reveal.
Considering Plaintiffs are trying to make a class action going back four years, it could bankrupt the Defendants. So, my first and second theories could be simultaneously true: Plaintiffs are antis trying to shut down cannabis in Arkansas (and nationwide), and it’s a money grab (at least for the attorneys, lol ).
Suppose Plaintiffs and the Class win three times their damages or force Defendants to disgorge their profits into a common fund, plus attorney’s fees (not accounting for any damages). That could be tens of millions of dollars.
Yup, it’s the plural form of people who are anti something:
To be clear, it’s not the plural of its eastern US dialect homophone:
Yeah, they seem shady AF. Especially if these two claims are true. Although I’m not sure what they mean “failed the test” as it relates to potency; I assume it’s another instance of the attorney not having a clue:
(36) Steep Hill knew it was inflating the THC amounts and refused to report instances where the cultivator’s samples failed the test, as Arkansas law requires.
(37) Steep Hill also allows testing samples to be selected by employees who are employed by the Cultivator. This is a conflict of interest. This conflict of interest has allowed Defendants to create false test results because the samples are not representative of the product actually sold.
Would like a Viva and Barnes (youtubers) style breakdown of the legal cases for the canna industry.
Ohhhh get legaleagle on the job too!! Love that guy!
I want Bruce rivers.
That’s my guy.
I really appreciate that there are straight law youtubers to break down nuances of the system we normally wouldn’t get right off the bat
Oooh this should be good! I like legaleagle but he seems so squeaky clean! Turning this shit on now!!
Well shit! Looks like I need to refine my legal youtubing!