Case against U.S. CBD firms moves forward after some claims stripped

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A federal court in New York has ruled that a racketeering and fraud case against a trio of related companies can go ahead based on a truck driver’s claims after he failed a drug test after using one of the firms’ CBD products.

While the court threw out some claims this month, it said the case, originally filed in 2015 by trucker Douglas Horn, can proceed against Medical Marijuana, Inc., Dixie Holdings, LLC a/k/a Dixie Elixirs, and Red Dice Holdings.

Failed test for THC

Horn claims in his lawsuit that the companies advertised their products as THC-free. He was terminated by New York-based Enterprise Transportation Company after testing positive for THC he claims was in Dixie Elixir CBD.

The presence of THC in the product was confirmed by two laboratories, according to the suit brought by Horn, who is identified in court documents as a former “professional over-the-road hazmat commercial truck driver.”

Claims under RICO

Horn claims in the suit that by “unequivocally and continually representing on their websites, press releases and advertising media that their products contain no illegal THC,” when they do in fact contain THC, that the companies are “misleading the public at large” regarding the marketing of their products.

Horn claims the firm’s marketing is “unfair, illegal, false, deceptive and/or misleading,” under federal guidelines. Those claims now move forward as do further claims under the federal Racketeer Influenced and Corrupt Organizations (RICO) Act — commonly cited in connection with organized crime prosecutions.

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