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Unfair competition in the cannabis industry

On Behalf of | Apr 19, 2023 | marijuana law

Cannabis has been raising debates for years. And California increased the discussions when it legalized it for medicinal and adult (recreational) purposes. One of the concerns in the industry is unfair competition. Since this type of business has not been in practice for years, some aspects, including illegal competition, are still not well-covered, but they happen.

Here is what you need to know about unfair competition in the cannabis industry.

False advertising 

Some cannabis companies use false advertising to gain an unfair advantage over their competitors. For instance, some stores are marketing their products with benefits that have not been proven. Such false claims can catch the attention of prospective customers, who will choose the particular store. 

Further, some companies claim their products can be used in ways they do not meet the standard for. For example, a company may market its product as a dietary supplement, yet it does not meet the Federal Food, Drug, and Cosmetic Act’s definition of such. A company advertising its product this way can get more customers than those that recognize it’s not true and, in turn, choose not to do so.

Lack of proper warning labels

Companies in the cannabis industry should provide proper warning labels to inform customers of any possible effects. When a company fails to warn properly or provide warnings altogether, it may be considered unfair competition. This is because customers always look at the warning before making a purchase. Thus, one may gravitate towards a store with products that are “safe.” 

While companies should provide safe products, it’s vital to provide in-depth warnings so a customer can make informed decisions.

If you believe a company has an unfair competitor towards yours, it will be best to learn more about the case to make the right moves.