February 20, 2026
An April 2025 U.S. Supreme Court decision has changed the risk calculus for companies selling CBD products nationwideespecially brands that advertise potency, purity, or wellness benefits online. In Medical Marijuana, Inc. v. Horn (decided April 2, 2025), the Court held that civil RICOs requirement that a plaintiff be injured in his business or property does not automatically bar recovery for economic harms that result from a personal injury.
That may sound abstract, but the practical impact is clear: plaintiffs lawyers now have a stronger path to plead civil RICO claims (18 U.S.C. 62 et seq.) in disputes involving allegedly mislabeled productsincluding CBD products. Civil RICO is not just another consumer claim. It brings:
RICO claims are still hard to winthe Court emphasized other constraints (like proximate cause and the pattern requirement). But from a litigation-readiness perspective, the pleading door is more open than it was before. For CBD brands and retailers operating across state lines, that makes 20252026 the right window to upgrade compliance controls and evidence preservation.
This article is informational only and not legal advice.
In Medical Marijuana, Inc. v. Horn, the plaintiff alleged he consumed a CBD tincture marketed as THC-free, then tested positive for THC and lost his job. Lower courts had split on whether civil RICOs business or property limitation barred economic harms that flowed from a personal injury. The Supreme Court held it does not.
Primary sources:
To plead civil RICO, plaintiffs typically try to frame conduct as:
In consumer product cases, the most common alleged predicates are mail fraud and wire fraudbecause sales flow through:
DOJ elements references:
The key takeaway for 20252026: your digital trail is now a primary RICO exhibit.
Expect plaintiffs to pressure-test several repeatable theories that can be pled across many SKUs and time periods.
Risk scenario: a product marketed as THC-free, broad-spectrum, or zero THC allegedly contains detectable THC. Even if the amount is small, plaintiffs may claim the undisclosed THC is materialespecially for consumers subject to workplace testing.
The Horn fact pattern makes this theory especially attractive because it ties an alleged labeling issue to a concrete economic harm (e.g., lost job or lost wages).
Risk scenario: label says 1,000 mg CBD but testing shows materially less, or claims X mg per serving without reliable serving homogeneity.
Plaintiffs may use:
Risk scenario: marketing implies treatment, mitigation, or cure for disease (or disease-like conditions) without FDA approval.
The FDA continues to treat many CBD products making therapeutic claims as unapproved new drugs under the FD&C Act and has issued warning letters based on online and social claims.
Examples of current federal enforcement posture:
Separately, the FTCs standards for substantiating health-related claims apply broadly. The FTCs Health Products Compliance Guidance underscores the need for competent and reliable scientific evidence, and that testimonials/influencer endorsements cannot substitute for substantiation.
FTC resources:
Plaintiffs increasingly probe not just whether you have a COA, but whether you can prove:
For hemp production testing programs, USDA expectations around analytical labs and registration status are an important signal of what good looks like.
USDA resource:
Even if your finished goods testing is not governed by the USDA hemp production program, plaintiffs may still cite these federal-quality signals in arguments about reasonableness, reliability, and internal controls.
To plead a pattern of racketeering activity, plaintiffs typically highlight repeated, similar communicationsand your operational consistency becomes their narrative.
They may seek:
Many businesses correctly focus on the federal definition of hemp (commonly referenced as 70.3% delta-9 THC by dry weight), but FDA maintains authority over how CBD may be marketed in foods, supplements, and therapeutic contexts.
A helpful neutral explainer on the CSA vs. FDA distinction (industry legal analysis): https://www.arnoldporter.com/en/perspectives/advisories/2025/12/major-changes-to-federal-regulation-of-hemp-derived-products
For a policy-level summary, CRS has repeatedly noted that FDA has stated it is unlawful under the FD&C Act to introduce food containing added CBD into interstate commerce and to market CBD products as dietary supplements, regardless of whether hemp-derived.
CRS issue brief (PDF): https://www.congress.gov/crs_external_products/IN/PDF/IN12381/IN12381.3.pdf
The litigation relevance: plaintiffs may plead that marketing a CBD ingestible as a supplement (or making therapeutic claims) is not only misleading, but also part of a scheme to sell products that could not lawfully be marketed as represented.
While this post focuses on federal RICO exposure, businesses should assume multi-front enforcement in 20252026:
The time to prepare is before you receive preservation demands or a complaint. The checklist below is designed for brands, retailers, marketplaces, and white-label operators.
A litigation hold is not a PDF you save in a folderit is a repeatable process.
At minimum, a hold program should:
Collaboration tools are often where key claim discussions live (e.g., Should we keep the pain claim? ). If your company uses Slack, preservation is uniquely challenging.
Practical eDiscovery resources:
Business takeaway: run a quarterly tabletop where you simulate a claim and verify you can freeze the right data within 2448 hours.
Plaintiffs will not stop at We have a COA. They will ask: Prove it.
Build a COA evidence package per batch/lot:
If you sell through marketplaces, also archive:
Business takeaway: treat COAs like regulated records, not marketing collateral.
The highest-risk claim environments in 20252026 are not always the label panel. They include:
Business takeaway: implement a claims approval workflow that covers label, web, ads, influencer content, and customer support languagewith documented sign-off.
Civil RICO claims often try to show repeated use of wires/mails in furtherance of an alleged scheme. Your routine systems create that repetition.
Prepare by mapping and retaining:
Business takeaway: be able to answer: What did the customer see, click, pay, and receive for a given order on a given day?
White-label arrangements are a litigation accelerant because plaintiffs can sue multiple entities and plead an enterprise theory.
For 20252026, review (or add) contract clauses for:
A general contract-manufacturing protections overview (supplement context): https://cohenhealthcarelaw.com/what-legal-protections-do-i-need-in-a-contract-manufacturing-agreement-for-dietary-supplements/
Business takeaway: if you cannot audit your upstream partner, you are betting your balance sheet on their QA.
Because a RICO-labeled case may be pled as fraud-based, coverage disputes can arise if policies have exclusions for intentional acts, knowing misrepresentation, or certain regulated products.
For a practical review in 20252026, ask your broker or coverage counsel to analyze:
Business takeaway: treat insurance review as part of compliance, not just finance.
When a potency or THC-content dispute becomes public, the speed and consistency of response often determine whether a situation becomes a class action.
A practical crisis playbook should include:
Business takeaway: your first 48 hours will be scrutinized later in discovery.
The goal is not to eliminate all riskits to reduce preventable risk and improve defensibility.
If you make structure/function or general wellness claims, maintain a substantiation folder that includes:
If you track these indicators, you can often predict when a matter is shifting from customer service to litigation.
Even if RICO is the headline, complaints often bundle:
If you sell CBD products across multiple states, your compliance and litigation posture lives in the detailsclaims, COAs, vendor controls, and recordkeeping.
Use https://www.cannabisregulations.ai/ to track changing federal and state rules, standardize cannabis compliance workflows for hemp-derived products, and build the documentation discipline that makes lawsuits easier to defend (and less attractive to file).
