Your CBD Stores, a Florida-based chain of CBD retail shops with more than 500 locations, is suing two former franchisees and accusing them of unlawfully selling a rival’s products.
The lawsuit also accuses Amber Knowles and Jeffrey Yabuki, owners of NaturOil Georgia, of trademark infringement, false advertising, unfair competition and violating five separate franchise agreements in Georgia.
Your CBD Store and Sunflora, which makes branded products sold in the chain and is also based in Florida, say that Knowles and Yabuki agreed to sell only products made by “Sunflora, YCBDS, or another supplier expressly approved by YCBDS in writing.”
But the locations owned by Knowles and Yabuki allegedly sold Budzburn CBD products and unauthorized delta-8 THC edibles.
The franchisees also stand accused of putting signs outside their locations making unauthorized health claims about their products.
Your CBD Stores is seeking unspecified damages and for the five locations to be shut down.
A hearing on the preliminary injunction is scheduled for Feb. 17 in federal court in Atlanta.
Franchising is a common retail strategy for low-THC hemp products.
But the model has been slow to catch on with marijuana and THC retailers because of legal hurdles.