A Seattle maker of CBD for pets and a holistic pet company that sold branded CBD treatments called the “Zen Pen” are now embroiled in a legal battle over shelf stability and expiration dates.
Sage Fulfillment sued Earth Animal Ventures Inc. in April, accusing the Connecticut company of failing to purchase the minimum number of orders under a 2018 contract. Sage asked a federal court in Connecticut for some $6 million in lost profits, plus unspecified damages.
Sage says it has been left with “an excess supply of empty, specially manufactured pens” it made for EAV.
EAV, which sells holistic pet treats, foods and medications, shot back with a motion to dismiss last week, saying Sage’s products were defective. EAV argues that poor shelf stability made Sage’s CBD-infused transdermal gels unsellable, giving it the right to terminate the contract
The product in question included a dose of CBD oil transdermal gel and an applicator pen. The pens were made by Sage but sold under EAV’s brand.
The contract called for EAV to buy “a minimum of 400,000 units of the products annually,” from 2019 through 2021. Sage says in its lawsuit it was expecting nearly $6 million in revenue through the life of the contract.
However, Sage argues in the lawsuit that EAV only bought 75,000 units of products before July 1, 2019, and has not ordered any since.
EAV, however, argues the products “were riddled with material performance and quality issues.”
One of those issues, EAV claims, was that Sage products carrieds”commercially unviable sell-by dates” that made it so EAV “could not distribute and sell the products to retail customers before the expiration date on the packaging.”
EAV also says customers reported high failure rates for the products and that as a result, many of EAV’s trade and retail partners “decided to delist the Zen-Pen.” EAV says the company suffered poor sales and a high complaint and return rate.
A hearing in the case has not been set.