Two days after Portland-based company Cura Cannabis agreed to pay a record fine to settle allegations it sold vape oils with misleading labels, a Portland couple filed a class-action lawsuit demanding the company relinquish any profits it made from those products.
Tom and Elena Powers of Portland bought Select brand vape products from Cura. Those vape pen cartridges claimed to contain only cannabis oil, but in fact included botanical terpenes. (That's the name for plant-based extracts designed to make vapes taste good.)
Those botanical terpenes were briefly banned by Gov. Kate Brown during a respiratory illness outbreak last fall. But Cura kept selling them, state investigators concluded—part of the reason why the Oregon Liquor Control Commission issued a record $110,000 fine to Cura. (The governor's ban was held up in court, but Cura's products would still have been misleadingly labeled even if they weren't banned.)
On Jan. 30, Cura agreed to pay the OLCC fine. The penalty would end a state investigation of the company, and allow the completion of its sale to Canadian investors.
The lawsuit, filed Jan. 31 in Multnomah County Circuit Court by Portland lawyer Michael Fuller, demands that Cura relinquish any profits made from mislabeled products.
"We expect to try this case before an Oregon jury sometime within the next year," Fuller tells WW. "The final judgment against Cura may exceed $37 million including statutory damages."
The lawsuit arrives as Cura is on the brink of completing a sale to a Canadian firm. The sale was announced last year as a billion-dollar acquisition—which would have made Cura one of the state's only "unicorns" (a company valued at $1 billion). But the value of the sale has shrunk considerably since then.
The mislabeled Select vape cartridges are at the center of Cura's business model. Cannabis oil is among the most lucrative sectors of the weed business, but it's taken a body blow thanks to last fall's health crisis linked to cannabis vapes.
A Cura spokesperson could not immediately be reached for comment. Emails obtained by the Portland Business Journal show the company told the OLCC the mislabeling was an internal communication problem and not an attempt to deceive. Regulators agreed.