Attorney General Fines Pueblo CBD Company for Misleading Claims, No Age Verification

A Colorado CBD company has to fork over $225,000 to the state attorney general to settle a case involving misleading product claims, improper age verification and lies about supporting conservation groups, according to an announcement from the AG's office.

Bee's Knees is a hemp-derived CBD company with a storefront and online retail operation based in Pueblo. According to the AG, since Bee's Knees started business in 2019, it has made "several misrepresentations" to wholesale and retail customers "regarding the source, chain of custody, and quality of its products."

The settlement also claims that Bee's Knees was "falsely associated with three nonprofit organizations" and "sold products that should be kept away from children" online without an age-verification system.

That was enough for the AG to go after Bee's Knees for violating the Colorado Consumer Protection Act. Bee's Knees denies violating the CCPA, the AG notes in the settlement, but the company agreed to pay six figures and assured a "discontinuance for any deceptive trade practice."

And according to the AG, there were quite a few.

Bee's Knees allegedly misled buyers with false information about the hemp used to make its CBD products,
advertising that its source material came from a licensed hemp farm or source approved by the Colorado Department of Public Health and Environment. However, the settlement with the AG asserts that Bee's Knees "does not possess valid government issued permits or licenses, COAs, or chain-of-custody documentation to confirm the source of those products."

The company also advertised on its website's "About" section that hemp used for CBD extraction was organic, but Bee's Knees owner Joseph Leyba admitted that a “pretty low” percentage of Bee's Knees hemp came from certified organic farms, according to the settlement. The word "organic" does not currently appear in product descriptions or the "About" section on the Bee's Knees website.

On top of the disputed product claims, the Bee's Knees website also showed logos of three nonprofit organizations on its home page: Operation Honey Bee, the Bee Conservancy, and the National Wildlife Federation. This "created the impression" that Bee’s Knees had an affiliation with or donated to these organizations, according to the settlement.

However, investigators discovered that Bee's Knees had never donated any money to those three nonprofits, "nor did it receive permission to include the names and logos of the nonprofit organizations on the Bee’s Knees Website," the AG's office says.

Shortly after J. Leyba’s sworn statement of January 22, all three nonprofit logos "were removed from the Bee’s Knees website," the settlement notes.

The settlement also accuses Bee's Knees of failing to shield its products, some of which are intoxicating, from underage buyers. Some of the edible products for sale on the Bee's Knees website are infused with Delta-9 THC, the same form of THC found in marijuana dispensary products. The AG notes that while Bee's Knees packaging has warnings such as "keep out of reach of children under 18” and “do not drive or operate any machinery while using this product,” the website had no age verification questions and "at no time during the ordering process or payment is a customer prompted to provide a government identification card to prove that they are eighteen years or older."

As of November 14, there is an age verification question on Bee's Knees' website and a "21+" on the page of Delta-9 THC products, but there are still no questions about a customer's age once the THC item is placed in the website's cart.

If Bee's Knees doesn't make payments on time or comply with terms outlined in the settlement, the fine could increase to up to $495,000, according to the AG's office. The company must "thoroughly vet" any raw materials used in production, as well as obtain required licenses and permits "to legally conduct business related to cannabis products." Bee’s Knees must also add age verification to its website and remove any misrepresentations about its products or associations with nonprofits within thirty days.

Bee's Knees has agreed to the terms of the settlement, but the AG's office notes that "this assurance does not constitute an admission by Bee’s Knees of any violation of the CCPA."

In response to inquiries about the settlement, Bee's Knees sent a statement to Westword through the company's attorney.

"We are happy to have this issue behind us and are 100 percent committed to making safe and compliant products available in Colorado," the statement reads. "We look forward to working with the local officials to continue offering great products."

This is the second time in five months that the AG's office has pursued disciplinary action against a Colorado hemp business. In July, the AG announced a lawsuit against Greeley hemp company CBDDY and its owner for allegedly selling cannabis products with THC content up to 35 times higher than the legal limit.