CannaCraft settles false advertising case for $250,000

A Santa Rosa-based cannabis company is on the hook for $250,000 in penalties after settling a lawsuit that claimed the business falsely advertised that its products could clear out genes contributing to Alzheimer’s disease and help with other ailments.

The legal action against CannaCraft was filed in Monterey County Superior Court on April 8 by the Sonoma County District Attorney's Office and prosecutors for eight other counties that make up the California Food, Drug, and Medical Device Task Force, the District Attorney’s Office said in a news release on Thursday.

The task force takes legal action against companies that engage in misleading advertising while selling food, drugs and medical devices, as well as cannabis and CBD products, the statement said.

The allegations outlined in the complaint involve CannaCraft’s Care by Design products.

Advertising for those products on the company’s website, which are not supported by bona fide scientific evidence, claimed CBD could “change gene expression and remove beta amyloid plaque, the hallmark of Alzheimer’s, from brain cells,” the news release said.

CannaCraft also said scientific and clinical studies showed CBD was therapeutic for conditions including cancer, diabetes, alcoholism and cardiovascular disease, among others.

“We are committed to creating a level playing field in the licensed cannabis industry by treating it the same way as other industries, including prosecuting unfair competition,” Sonoma County District Attorney Jill Ravitch said.

A phone call and electronic message sent to CannaCraft through its website seeking comment about the settlement, which was reached Wednesday, were not immediately returned Thursday afternoon.

CannaCraft did not admit wrongdoing by agreeing to the settlement, though has made changes to its advertising, prosecutors said.

In addition to the $250,000 in civil penalties, the company will also need to pay $25,000 in restitution and an additional $25,000 to cover investigative costs related to the prosecution, the news release said.

Launched in 2014, CannaCraft markets a variety of cannabis products, ranging from chocolates and gummies to oils. The private company is located on Circadian Way in Santa Rosa and had more 200 employees last year.

In a 2018 case, CannaCraft was ordered to pay out a settlement of more than $510,000 after the Sonoma County District Attorney’s Office prosecuted the company over environmental law violations related to its storage, handling and disposal of hazardous materials, the news release said.

You can reach Staff Writer Nashelly Chavez at 707-521-5203 or nashelly.chavez@pressdemocrat.com. On Twitter @nashellytweets.