Three Colorado cannabis companies will pay six-figure fines and exit the state industry to settle a dispute over products, marketed as sleep aids, that allegedly caused liver injuries, Attorney General Phil Weiser said Friday.
According to Weiser, the companies manufactured and distributed Midnight Drops under the 1906 brand and learned as early as 2020 that they might be causing health problems but continued to market the products.
The companies, co-founded by New York City-based Peter Barsoom, are:
1906 currently markets hemp-derived THC products in 40 states, according to the company’s website, but sold the offending products in Colorado’s licensed cannabis market, according to Weiser.
Under terms of a settlement with Weiser’s office, the companies will pay $400,000 in fines and cease operations in Colorado.
They’ll be allowed to resume operations “if certain conditions are met” but stand to pay an extra $600,000 if the settlement is violated, according to a statement from Weiser’s office.
Marketed cannabis sleep aids despite complaints of liver problems
According to Weiser, Sima Sciences, which manufactured Midnight Drops from 2016 to 2024, began receiving complaints from users in 2020.
A later investigation found that the company failed to adequately research two herbal extracts used in the products – and also failed to properly notify retailers carrying the products.
The companies pulled the 1906 Drops from production after a 2023 state health advisory warning about the herbal supplement corydalis, although the products continued to be available at dispensaries, according to the state.
The companies “broke the law by failing to disclose potential health risks from their products,” Weiser said in a statement.
Both state and federal authorities have punished manufacturers for marketing products with unfounded claims of medical benefits.
1906 relocated to Connecticut from Colorado in part because a quasi-public investment fund sunk $1.25 million into the company in 2022.
However, the company failed to win a Connecticut cannabis license.
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