DENVER (KDVR) — A cannabis brand will cease operations in Colorado after an investigation found that it failed to disclose the health risks of its products and misrepresented health benefits to consumers.
On Friday, Colorado Attorney General Phil Weiser announced the settlement with the manufacturers and distributors of the 1906 brand of cannabis products, as well as its co-founder, Peter Barsoom.
Under the settlement, the companies Nuka Enterprises LLC, Sima Sciences LLC, and Nuka Properties LLC will cease operations in Colorado and pay a $400,000 fine to the state.
The companies will have to pay an additional $600,000 if they violate the terms of the settlement, and the AG’s office said in a press release that they may be allowed to resume operations if certain conditions are met.
In the Assurance of Discontinuance document, Weiser said that Sima Sciences LLC, the Colorado company that held licenses allowing for the manufacture and distribution of the 1906 product line, sold edibles called “Midnight Drops” despite reported health issues related to the product.
“The health issues people were experiencing stood in stark contrast to the claims made about the health benefits of the drops, which were marketed to aid sleep,” the document states.
The product was sold in Colorado from 2016-2024. The AG said the company first received complaints in 2020, with some customers saying the product was causing liver problems.
The AG said the companies were made aware of the health effects, but continued to sell the product and failed to disclose information about specific reports of the product’s adverse health events to customers.
The 1906 parties re-formulated the product in March 2022 and launched the new version, which replaced the plant extract Corydalis with a different herbal supplement, Stephania extract.
Investigators also learned the companies did not perform adequate research on the herbal extracts Corydalis and Stephania, which their products contained at various times, failed to properly notify retailers of the problems so the products could be removed from shelves, and misrepresented the products’ health benefits.
Multiple reports of health issues led state health authorities to issue public notices of the adverse health effects in July 2022 and again in June 2023, when the companies stopped producing and selling the product in all MED-licensed dispensaries; however, it was still available to consumers for several more months.
“Colorado’s cannabis regulations are the nationwide gold standard for protecting consumers, and the companies in this case broke the law by failing to disclose potential health risks from their products,” said Weiser. “With this action, I am holding the companies and one of its co-founders accountable to ensure they face consequences for their deceptive business practices. I will continue to hold accountable those who evade Colorado’s cannabis and consumer protection laws.”
The parties may be permitted to resume operations in Colorado under certain conditions, including that the products are legally compliant, all dues in the settlement are paid, plus an additional payment to the AG. The earliest that the sales may resume is Jan. 1, 2027, depending on payment.
Anyone who a company is misrepresenting products or services can file a complaint with the AG online.
