Presidential Cannabis Accused of False Advertising on THC Claims

The case is similar to the allegations against Stiiizy.

Another cannabis company is accused of overinflating the amount of THC in its cannabis products. The same law firm that filed the allegations against Stiiizy, Dovel & Luner, is also accusing VO Leasing Corp., which makes, sells, distributes, and markets the “Presidential” brand.

The language in the two court filings is almost identical. Aaron Argueta is listed as the plaintiff on this case and lives in Santa Ana, California.

John Zapp is listed as the owner, CEO, and CFO of VO Leasing, according to Cannabiz Media, but he is not named in the case. Everett Smith, who played professional basketball in Europe, is also listed as a co-founder of Presidential.

The company has active licenses as a cultivator, manufacturer, and distributor. It is listed as being based in Van Nuys, California. The company is said to have finalized deals to launch in Nevada and Michigan. The company also announced it is launching in Michigan through a partnership with a California company that has retail locations in both states.

THC Margins

The crux of the case is the law that the THC “claimed to be present on a label” must be within “plus or minus 10.0%” of the actual THC content of the product. The court filing stated, “As an example, if the label states that a product is 30% THC, the product must be between 27%-33% THC. Thus, if the actual product contained only 25% THC but the THC content was listed at 30%, the label would violate California regulations and be inaccurate and mislabeled.”

While the Presidential brand might not sound familiar on the bigger stage, the court filing states that it is the fourth top-selling pre-roll brand and top-selling blunt brand in California. It also noted that Presidential “self-distributes, and it currently has products in approximately 430 stores.”

Moon Rocks

The case states that all of the Presidential Products claim to have very high-THC content because the company uses what it calls “Moon Rocks” in the manufacturing of its products. “Moon Rocks” refers to “cannabis buds dipped in hash oil, then rolled in kief.” According to Leafly, “Though the potency of each batch of moon rocks varies and depends on how it’s made and who produces it, the general consensus is that they hover around 50% THC.”

Not So High

According to the court filing, independent laboratory testing showed that the actual THC levels were much lower.

“For example, the Presidential Moon Rock Grape Mini Prerolls were listed as having 44.1% THC on the label. The lab testing showed, however, that the actual THC content of the product was substantially lower, between 26-28% THC. Thus, the THC content was overstated by 36-39% – substantially more than the 10% margin of error allowed under the California regulations.”

Another example stated, “The Presidential Moon Rock Tropical Preroll was listed as having 53.3% THC on the label. The lab testing showed, however, that the actual THC content of the product was substantially lower (between 23% and 24%). Thus, the THC content was overstated by 53-55% – again, far more than the margin of error allowed under the California regulations.”

The case accuses VO Leasing of charging more for the higher THC content even though that is not what the consumer is receiving. Argueta stated in the case that he would not have paid for the premium product priced higher had he known it was lower THC. The lawsuit claims it is false advertising, and while the court filing didn’t state how much money they wanted, it did say it wanted to be paid for damages.

Debra Borchardt

Debra Borchardt is the Co-Founder, and Executive Editor of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Master's degree in Business Journalism from New York University.


2 comments

  • Steven Louis Mandel

    December 10, 2022 at 6:53 pm

    These scoundrels should lose their licences. Dishonest labeling is a health issue and a public trust issue. No mercy. Keep corruption out of cannabis.

    Reply

  • Edward McNamee

    December 15, 2022 at 10:21 am

    It’s easy to create an advantage over other fair honest merchants it’s hard when one embellished/lies to create sales also it ruins the industry‘s credibility with labeling

    Reply

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