A California appeals court has upheld the dismissal of a lawsuit against a marijuana dispensary accused of misleading a customer into purchasing a THC gummy that allegedly caused a severe panic attack and lasting health problems.
In an October 13 ruling, the California Court of Appeal for the Sixth Appellate District affirmed a lower court’s decision dismissing fraud and unfair competition claims against VMK Inc., the company operating the Purple Lotus marijuana dispensary in Santa Clara County.
The case, Deen v. VMK Inc., stems from allegations by Nasir Abbas Deen, who visited the dispensary seeking relief from anxiety associated with a dental procedure.
According to the complaint, Deen told a salesperson that he had never used marijuana or other recreational drugs and wanted something that would relieve his anxiety without making him feel intoxicated.
The employee, identified as E. Franco, allegedly recommended an edible containing 10 milligrams of delta-9 THC, advising Deen to consume half the gummy and take the remaining portion if he experienced no effects after an hour.
Deen alleged that the employee represented the product as suitable for relieving anxiety without producing a high.
After consuming the gummy, Deen said he experienced a six-hour panic attack that resulted in an emergency room visit. He reported hallucinations, paranoia, severe anxiety and other symptoms, followed by continuing mental and physical health problems.
He subsequently pursued legal action against the dispensary, alleging fraudulent misrepresentation and violations of California’s Unfair Competition Law.
However, the appellate court determined that his complaint failed to establish that the dispensary employee knowingly made false statements or acted with reckless disregard for their truth.
The judges explained that California law requires specific factual allegations showing knowledge of falsity or reckless disregard for the truth to support an intentional fraud claim.
The court emphasized that experiencing an adverse reaction to a product does not, by itself, establish that the salesperson knew the product would cause that reaction.
In its opinion, the court stated that the complaint contained no supporting facts establishing why the employee or dispensary would have known that the representations were untrue.
The court also distinguished intentional fraud from negligent misrepresentation, explaining that a person may provide inaccurate information without necessarily knowing it is false. The lower court had previously determined that any negligent misrepresentation claim was barred by the applicable statute of limitations.
Because Deen’s unfair competition allegations depended on the same underlying fraud claims, the appeals court upheld their dismissal as well.
The judges also rejected his request for another opportunity to amend the lawsuit, finding that he had not identified additional facts capable of correcting the deficiencies.
The ruling leaves the lower court’s judgment in favor of VMK intact, with the dispensary operator entitled to recover its appellate costs.
The decision was issued as an unpublished opinion, meaning it does not establish binding precedent for other California cases.
