Cake Brands Targeted in Hemp Class Action Lawsuit

Seemingly every week now, lawyers are filing cases against hemp product manufacturers and brands, claiming that the THC levels are higher than advertised. The latest target of these legal battles is Cake Brands, a California-based company that has been working to protect its brand amidst these challenges.

Last week, a class action lawsuit was filed against Cake Brands by the legal firm Smith Krivoshey, which is also handling a similar case against Lifted Liquids. Lifted Liquids reported sales of $28 million in hemp products over the last nine months, while Cake Brands claims to have generated more than $1 million in sales per week in 2021. If we do the math, that amounts to at least $36 million in sales over nine months – and it’s safe to assume that the sales have likely increased since then.

The lawsuit targets WM Wholesale LLC, the manufacturer behind a variety of delta-8 vape pens and cartridges sold under the Cake brand. Specifically, the products in question include Cake Brand delta-8 disposable devices and cartridges, including “live resin” and “classics” options.

Similar to the Lifted Liquids case, the plaintiff, Josue Hernandez from Florida, purchased these products with the expectation of a mild psychoactive effect because they were labeled as containing less than 0.3% THC. Hernandez, residing in a state where possessing non-medicinal cannabis products with more than 0.3% THC is illegal, was surprised when the products had a higher THC content than advertised. Concerned about potential repercussions, such as failing a drug test for a job, Hernandez has stopped buying Cake’s products and wishes he had known the true THC levels before purchasing them.

The complaint argues that Cake Brands engaged in false advertising by selling products with THC levels exceeding 0.3% while being aware of this fact. This legal battle is unfolding in a complex regulatory landscape where delta-8 products derived from hemp fall into a legal gray area due to loopholes in the law.

If successful, the lawsuit seeks to reimburse consumers for their purchases and obtain restitution for the revenue generated from the sale of these products. Given that Lifted Liquids reported $48 million in hemp product sales in 2023, the potential financial implications for Cake Brands, which reported $44 million in sales over nine months in 2021, could be significant.

As the legal battle progresses, it’s clear that the hemp industry is facing increased scrutiny, and companies like Cake Brands are navigating choppy waters as they seek to protect their business amidst these challenges.