Cannabis e-cigarette giant SMOORE faces federal antitrust lawsuit in the United States.

According to the latest report from the US industry media MJBIZDAILY, a new class-action lawsuit alleges that SMOORE International, the world's largest manufacturer of industry-standard cartridge-style cannabis oil vaporizers based in Shenzhen, China, is facing a federal antitrust lawsuit in the United States for allegedly planning an illegal monopoly to control the market and suppress competitors.

It was reported that on February 11, Arizona marijuana retailer Earth's Healing Inc. filed a class action lawsuit against SMOORE International and its four American distributors in the Northern District Court of California, accusing them of violating the Sherman Antitrust Act.

The lawsuit alleges that CCELL e-cigarette manufacturer Shenzhen SMOORE International and its US distributor have been maintaining artificially high prices for their products through secret distribution agreements signed since 2016, carrying out a nearly decade-long market price manipulation scheme with the aim of monopolizing the US electronic cigarette technology market.

According to the lawsuit reported by the Green Market Report, SMOORE International has been conspiring with its American partners to control prices and ensure "no valuable competition exists" by forming a "cartel". The lawsuit alleges that SMOORE International's "anti-competitive behavior artificially fixed the price of its e-cigarette products in the US above competitive levels".

Federal antitrust charges against "cartels".

The lawsuit alleges that the company violated federal antitrust laws and seeks unspecified damages. It is unclear at this time whether any other parties will join the class action lawsuit brought by Earth's Healing.

In the lawsuit of Earth's Healing, besides involving SMOORE International, four alleged partners located in the United States were also mentioned and identified as the company's "authorized distributors" in the lawsuit. According to the lawsuit, " SMOORE International and its authorized distributors reached horizontal agreements prohibiting competition among distributors and with SMOORE International."

The four distributors are:

Jupiter Research, based in Tempe, Arizona, a subsidiary of Tilt Holdings.

Greenlane Holdings LLC, headquartered in Delaware (NASDAQ stock code: GNLN).

CB Solutions LLC, based in Everett, Washington (operating under the name Canna Brand Solutions).

3Win Corp, located in Las Vegas (soon to be renamed SMOORE Corp).

It is currently unclear what powers the American courts have over SMOORE International, which is headquartered in China.

SMOORE's "supervision" of anti-competitive behavior.

According to the lawsuit, Sumo International and its partner "reached a written agreement" to prevent competition and enforce minimum pricing. The agreement reportedly includes distributors sharing confidential customer and pricing data each month, with violations resulting in fines deducted directly from the mandatory deposits paid to the partner.

The complaint alleges that "Defendant SMOORE International and its authorized distributors in the United States do not have true competitors, and they possess and exercise significant market power in wholesale distribution of electronic cigarettes sold in the United States, which violates relevant laws."

According to federal court records, in 2021, SMOORE International filed a lawsuit with the United States International Trade Commission (ITC), accusing 38 American companies of importing products that infringe on its patents relating to atomizer devices, in violation of trade laws.

Simo International claims to have at least five patents issued by the US Patent and Trademark Office, granting it intellectual property rights to the basic components of most typical evaporator devices: a mouthpiece connected to a liquid reservoir and atomizer, which is then connected to a battery.

Unfortunately, in 2023, the United States International Trade Commission ruled that Sumo International did not hold a patent and lost the case.

In 2024, an American electronic cigarette company ACTIVE (operating under the name of Next Level Ventures LLC) filed a countersuit against SMOORE International, accusing it of using "abusive litigation" to "illegally limit competition", engaging in illegal monopolistic behavior, and seeking nearly $200 million in damages. The company claims that this is a direct result of SMOORE International's illegal actions in the cannabis electronic cigarette market.

Since entering the US marijuana e-cigarette market in November 2016, Simo International has quickly established a dominant position, holding nearly 80% of the market share. However, according to court documents, as new competitors continue to emerge, the market competition has intensified, and this share has decreased to 50-60% between 2018 and 2023.

The parties being sued in this proposed litigation will include any licensed American cannabis company that has purchased SMOORE electronic cigarettes through authorized distributors since November 2016. The plaintiff is seeking unspecified damages, legal fees, and injunctive relief against alleged anti-competitive practices.

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