A proposed class action lawsuit alleges Steep Hill Inc. has violated federal racketeering law by intentionally overstating the amount of THC in the marijuana it sells to medical patients in Arkansas.
The 22-page lawsuit was filed by three patients who allege they noticed that some medical marijuana they received from Steep Hill was “more potent than others,” despite being labeled as having similar amounts of tetrahydrocannabinol, the main psychoactive compound in cannabis.
Per the case, the plaintiffs, who are described in the suit as suffering from chronic pain, had some of the Steep Hill marijuana tested. According to the complaint, the tests revealed that Steep Hill and its co-defendants, cultivators Bold Team LLC, Osage Creek Cultivation and Natural State Medicinal, have overstated the amount of THC in the prescribed cannabis by an average of 25 percent.
The lawsuit charges that Steep Hill and the cultivator co-defendants have “intentionally refused to implement reasonable production standards,” the net effect of which, the suit says, is to defraud patients by “over-representing the amount of THC in flower” for the sake of profit.
The filing says that the more THC found in a particular variety of marijuana, the higher the price and, thus, the more profit for the defendants. In essence, the lawsuit contends, the plaintiffs and other Arkansas medical marijuana patients are paying for a higher grade of cannabis but are in fact receiving a lower-quality product that’s “created millions of dollars of fraudulent profit.”
“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,” the complaint alleges.
Further, the case claims that Steep Hill has created a conflict of interest by allowing testing samples to be selected by employees who are also employed by its cultivator co-defendants. This conflict of interest, the suit says, has allowed the parties to “create false test results because the samples are not representative of the product actually sold.”
The lawsuit argues that the defendants’ publication of the alleged false cannabis testing results over the internet “hundreds of times” amounts to wire fraud. Moreover, the complaint claims that the defendants, “together with their respective law firms and bankers, also conspired and agreed to work together” so the cultivators could carry on with their alleged course of conduct.
The case looks to cover any person who has held, or will hold, a medical marijuana card issued in Arkansas in the four years prior to the filing of the lawsuit on July 12, 2022 and to the date of certification.
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