As I write this post, the U.S. Supreme Court (SCOTUS) is hearing arguments in a case involving a fired trucker and a medical marijuana company. The trucker is suing after having lost his job, insurance benefits, and pension due to testing positive for THC. The trucker maintains his positive test was the result of using a legal CBD product.
This is a critical case inasmuch as it will determine how much liability cannabis companies assume by advertising, labeling, and otherwise promoting their products. Ironically, the case before SCOTUS is not actually about medical cannabis per se. It is about whether the original lawsuit can continue under the well-known RICO statute.
RICO and Civil Proceedings
RICO, known more formally as the Racketeer Influenced and Corrupt Organizations Act, was originally developed as a legal tool to go after organized crime. But the language of the law allows it to be used in civil proceedings under certain circumstances. In the case currently before SCOTUS, lawyers for the plaintiff contend that RICO is applicable.
The statute allows for recovering business losses incurred as a result of corrupt activities by another entity. Attorneys for the trucker say that his loss of employment, income, and benefits affects his business activities. They also contend that the business impact has resulted in personal injuries.
Attorneys for the medical marijuana company say that the trucker’s losses are personal only. They contend that, due to his employment, he has no business activities of which to speak. In essence, trucking was not his business. It was his employment.
SCOTUS will ultimately determine if the case can proceed in a lower court under that RICO statute. If they determine it can, the case looks like an open and shut one for the plaintiff. Clearly he was harmed by a product advertised to contain 0% THC. But if SCOTUS rules the other way, the case is likely dead in the water.
What It Could Mean to the Industry
This case is so important that dozens of companies and organizations – both within and without the cannabis industry – have filed briefs. Some have filed in favor of the plaintiff while others are in favor of the defendant. So what does it all mean?
Let us assume SCOTUS finds in favor of the plaintiff. Cannabis companies would be held liable, in the future, for claims resulting from mislabeling or perceived marketing inaccuracies. It would all but set the stage for federal labeling requirements.
This would not necessarily be a bad thing in that clear and accurate labels are good for consumers. And according to the operators of the Utahmarijuana.org website, labeling needs a lot of work. But it could be a bad thing in that there is still so much we don’t know about how medical cannabis affects the human body.
Even with proper labeling, there is always a chance that a consumer using what he thinks is a legal CBD product contains enough THC to show up on a workplace drug test. The truth is that making a cannabis-derived product with zero THC is nearly impossible.
All Eyes on SCOTUS
All eyes are now on SCOTUS. As usual, we won’t get their final ruling until late spring or early summer 2025. I would not even try to guess how they might rule. I do know this: if the court rules in favor of the plaintiff, there is going to be a rush among cannabis companies to come up with some sort of standard for labeling and marketing. The industry isn’t interested in facing a rash of lawsuits brought under the RICO statute.