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Hemp Oil Seller Says|NBC Cost It $1 Million

CHICAGO (CN) — A hemp oil distributor sued NBC for $1 million, claiming an apology and correction aren't enough for a defamatory report that it sells "pot" and "medical marijuana."

AFI Holdings of Illinois dba Happy Leaves claims the July 1 broadcast from NBC and co-defendant Waterman Broadcasting recklessly reported that it was selling pot and medical marijuana online, "as a way to sensationalize its story." Waterman Broadcasting operates the NBC station WBBH-TV.

The defendants posted an online correction and apology on July 14, but Happy Leaves says that's not enough, in its Sept. 2 lawsuit in Chicago Federal Court.

Happy Leaves distributes a hemp oil extract called "Charlotte's Web" made by CW Hemp in Colorado. Industrial hemp has very low levels of tetrahydrocannabinol, or THC, the active ingredient in marijuana. The active ingredient in Charlotte's Web is cannabidiol, which occurs in both hemp and cannabis, and is not regulated like THC.

Hemp is legal to grow in Colorado, and hemp oil extract is legal to sell throughout the U.S., Happy Leaves says.

It claims the broadcast forced it to stop selling Charlotte's Web online, after its monthly gross sales from Groupon alone came to $75,000 in June.

Happy Leaves claims NBC sought "to further sensationalize its broadcast by claiming Happy Leaves had declined a request for comment," though NBC had sought the comment by an email it sent 8:49 p.m., well after business hours were over, just two hours before the segment aired.

"The failure to research the ingredients of Charlotte's Web or Happy Leaves' business practices was reckless and/or done with specific intent to cause harm to Happy Leaves," the complaint states.

The online correction and apology occupies four paragraphs in the 9-page complaint, but Happy Leaves says it was too late, that its sales of Charlotte's Web have been "devastated."

It seeks $1 million in lost sales plus punitive damages for defamation, commercial disparagement, and deceptive trade.

It is represented by Patrick Walsh in Chicago.

WBBH-TV declined to comment.

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