The Same Day GTI Sought DEA Medicine Status, a Class Action Hit

Forty-one customers sued Cresco Labs, Green Thumb Industries, and Verano on May 4, 2026, over recreational cannabis sold as medicine. The 320-page case landed in Chicago federal court the same Monday Green Thumb asked the DEA to register medical operations under Schedule III.

By August, Palomar Excess & Surplus Insurance Company was in a second Chicago docket asking a judge to say Cresco’s $5 million policy does not cover the defense. Motions to dismiss the consumer case had not been decided as of Sept. 2, 2026. None of the claims have been proven.

Green Thumb Filed for DEA Medical Registration on the Same Monday

Green Thumb told investors on May 4 that it had submitted applications to register certain state-licensed medical cannabis operations under an expedited DEA path created after medical marijuana was moved to Schedule III of the Controlled Substances Act. The company owns RISE dispensaries in 14 U.S. markets and operates over 110 retail stores that serve medical patients and adult-use shoppers.

Founder, chairman, and chief executive Ben Kovler framed the filing as a practical step toward a more normal federal industry, including research access and relief from the punitive tax treatment that has followed Schedule I status.

Schedule III changes the future of medical cannabis in America, and Green Thumb is ready for what comes next. Rescheduling recognizes what millions of patients have known for years, opens the door to more research, and begins to fix the punitive tax treatment that has held responsible operators back.

Ben Kovler, founder, chairman and CEO, Green Thumb Industries, in Green Thumb’s DEA registration announcement

That medical vocabulary is the collision. The consumer case does not challenge DEA registration. It targets adult-use marketing that, the plaintiffs say, taught recreational buyers to treat high-THC flower, vapes, and edibles as treatment. Green Thumb’s public statement that Monday was about the DEA path, not the complaint.

The Complaint Treats High-THC Products as Acute Intoxicants

Lead plaintiff Michael Murray, a New York resident, says he bought a Cresco product sold under the Wonder Wellness brand and paid money he would not have paid, or would have paid less, had the risks been clear. Forty other named buyers from Arizona, Connecticut, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New York, Ohio, Rhode Island, and Virginia make similar claims against products from the three companies.

The filing is Murray et al. v. Cresco Labs Inc. et al., No. 3:26-cv-50184, in the U.S. District Court for the Northern District of Illinois, before Judge Rebecca R. Pallmeyer and Magistrate Judge Margaret J. Schneider. Plaintiffs’ counsel include Patrick Kenneally of Burke Law Group, former Illinois lawmaker Jack Franks, Weitz & Luxenberg, and Pawa Law Group. The nature of suit on the docket is federal racketeering under 18 U.S.C. § 1961, with state consumer-fraud and warranty counts riding alongside. The same day, a parallel Illinois consumer case, Blackketter, 2026LA000628, was filed in Madison County against the same three operators.

Classes are drawn company by company, not as one identical 12-state pool. Cresco’s multi-state class, as pleaded, covers adult-use buyers in Arizona, Massachusetts, Michigan, New York, and Ohio. GTI and Verano classes are pleaded across the wider 12-state list, with state subclasses under each banner.

THE THREE COMPANIES NAMED

The opening pages of the 320-page class action complaint call the companies’ pitch a public-relations megaphone that sold cannabis as “the antidote to ailments of all kinds,” a list that runs from insomnia and pain to grief, shyness, and opioid addiction. The same passage says the defendants “have unleashed an acute intoxicant, tetrahydrocannabinol (THC), at unprecedently high concentrations on its customers.”

Plaintiffs say the companies knew, or should have known, that the FDA has not approved cannabis as a treatment for any disease or condition. The agency has approved one cannabis-derived drug, Epidiolex (cannabidiol), and three synthetic cannabis-related drugs, Marinol, Syndros, and Cesamet, each by prescription for narrow uses. Those approvals do not cover dispensary flower or concentrates.

The complaint cites a 2025 Journal of the American Medical Association review of 124 randomized trials as finding weak or absent evidence that cannabis treats pain, anxiety, PTSD, insomnia, and most other hyped uses. It quotes the American Psychiatric Association’s December 2025 position that “there is insufficient evidence that cannabis is an effective treatment for any psychiatric disorder.” Those are allegations and cited papers in a pleading, not findings by Pallmeyer.

On the companies’ own sites, the complaint says, the medical lexicon does the work. Hits become “doses.” Cashiers become “personal care specialists.” Blogs talk of “potential” and “promising” therapy. An Aug. 24 plaintiffs’ brief, Document 56, points to a “Cannabis as Medicine” narrative, claims of “therapeutic benefits” for PTSD, migraines, chronic pain, and inflammation, a claim that dispensaries employ “cannabis pharmacists,” and strain copy marketed as helping to “manage anxiety and stress.” The brief says none of the defendants’ product labels contain a relevant warning beyond what state rules already print.

WHAT THE PLAINTIFFS WANT

• Money back: Damages for buyers who overpaid or who bought because of alleged health claims and omissions.
• A sales halt on the pitch: An order barring further medicinal, health, or therapeutic claims on marijuana sold through adult-use shops.
• New warnings: An order requiring clear warnings about mental and physical health risks on adult-use products.
• Disgorgement: Return of “all monies wrongfully obtained,” plus restitution, as pleaded in the prayer for relief.

Kenneally, now a Burke Law Group partner, has said the cannabis industry “has conducted a pervasive marketing scheme, which has misrepresented the nature of cannabis,” and that the suit is meant to force companies to “warn consumers about the well-known, obvious, and scientifically validated dangers of cannabis.” Franks said the filing is not an attempt to shut dispensaries. He wants the warnings.

Kenneally Already Forced Rise to Post Schizophrenia Warnings

The federal case is a scaled version of a fight Kenneally ran as McHenry County state’s attorney in 2023. To avoid a consumer-fraud action, cannabis shops in that county agreed to post in-store mental-health warnings and to strip medical-benefit claims from marketing and websites. McHenry said the shops were the first in the country to post those signs.

Agreements reached the shops that had been open longest, including RISE Lake in the Hills, a Green Thumb banner, and Ivy Hall in Crystal Lake. The companies also paid Kenneally’s office $100,000 for a public education campaign, including billboards that tied cannabis to schizophrenia and suicide.

FROM COUNTY SIGNS TO A RICO DOCKET

1. September 1, 2023: McHenry County announces settlements requiring in-store mental-health warnings and a ban on medical-benefit claims in shop marketing.
2. May 4, 2026: Green Thumb files DEA medical-registration applications. The same day, the Murray complaint and the Madison County Blackketter case are filed against Cresco, Green Thumb, and Verano.
3. August 14, 2026: Palomar sues Cresco and several named buyers, asking a federal judge to declare that two Cresco policies do not cover Murray or Blackketter.
4. August 24, 2026: Plaintiffs file Document 56, opposing a defense motion to stay discovery until the motions to dismiss are decided.

The 2023 warning signs, as Kenneally’s office published them, told shoppers that “cannabis use may contribute to mental health problems, including psychotic disorders such as schizophrenia, increased thoughts of suicide and suicide attempts, anxiety, and depression. Risk is greatest for frequent users.” A second sign said the FDA has not approved cannabis for the treatment of any disease or medical condition. Three years later, the same prosecutor is asking a federal court to treat that theory as a multi-state class case with a racketeering count attached.

What Illinois Already Requires on Cannabis Labels

Illinois is not a no-warning market. The Cannabis Regulation and Tax Act already tells every licensed seller what has to be on the jar. Plaintiffs say that text is not enough because it does not name psychosis, schizophrenia, or suicide, and because the companies’ websites and blogs, they argue, talk over the label.

Under the Illinois cannabis package warning rules, every product must carry a purchaser warning that is legible and not covered up. Unless the Department of Public Health tightens the language, the statute’s baseline text reads: “This product contains cannabis and is intended for use by adults 21 and over. Its use can impair cognition and may be habit forming. This product should not be used by pregnant or breastfeeding women. It is unlawful to sell or provide this item to any individual, and it may not be transported outside of the State of Illinois. It is illegal to operate a motor vehicle while under the influence of cannabis. Possession or use of this product may carry significant legal penalties in some jurisdictions and under federal law.”

Cannabis that may be smoked must also say “Smoking is hazardous to your health.” Infused products, other than topicals, must warn that intoxication may be delayed two or more hours. Packaging may not be false or misleading. That last clause is the hook plaintiffs want to pull into a health-claim case. Defendants will say the opposite: the General Assembly already wrote the warnings, state agencies already police labels, and a private class cannot rewrite a licensed market from a federal courtroom.

The complaint itself recites 2024 U.S. cannabis sales above $30 billion and $4.4 billion in tax revenue as the backdrop for why the marketing fight is worth bringing. Those figures are the plaintiffs’ recital, not an audit in this case.

Palomar Sued Cresco to Escape a $5 Million Policy

The first hard cost is not a jury. It is whether Cresco’s carrier stays in the room. Palomar, based in La Jolla, California, filed Palomar’s complaint for declaratory judgment on Aug. 14, 2026, as case 1:26-cv-9856. Palomar issued Commercial General Liability Policy No. PEQSGL001253-00 and Commercial Products Liability Policy No. PEQSPL001253-00 to Cresco Labs, L.L.C., doing business as Sunnyside, for Oct. 13, 2025, through Oct. 13, 2026. Cresco Labs, Inc. is an additional named insured. Each policy’s limit is $5 million per claim. Palomar says the underlying claimants have made a multimillion-dollar demand, and that Cresco contends Palomar must defend and indemnify.

WHY PALOMAR SAYS THE POLICIES DO NOT RESPOND

• No occurrence injury: Palomar says Murray and Blackketter plead a marketing scheme, not bodily injury or property damage from an occurrence the policies were written to cover.
• RICO exclusion: Palomar says Exclusion 9 knocks out the racketeering count even if some other piece of Murray were in the insuring agreement.
• Restitution and disgorgement: Palomar says the buyers want profits handed back, punitive and multiplied damages, and fines, which it treats as outside indemnity.

Palomar named Cresco and several of the consumer plaintiffs as defendants in the coverage case, a standard move so a judgment binds the people who would collect. The filing does not name Green Thumb or Verano as insureds. If Palomar wins, Cresco funds its own defense of a 320-page case while GTI and Verano watch how their own carriers read the same pleading. Cannabis policies often carry health-hazard exclusions. This docket is that exclusion being tested in public.

Verano Says Similar Claims Have Already Failed

A Verano spokesperson called Kenneally’s suit “part of a broader litigation campaign that plaintiffs’ counsel has brought against several multistate cannabis operators.” Verano also said it operates “in compliance with applicable state laws” that include “warning requirements dictated in each state in which Verano is licensed,” and that the Northern District filing “mirrors claims that have been rejected by courts in similar legal actions against multistate operators in the industry earlier this year.”

A Cresco official said the company does not comment on litigation. Green Thumb’s May 4 statement did not address Murray.

Readers should not fold this case into a different Illinois wave. In May 2026, buyers dropped separate suits that accused Cresco, Verano, and others of mislabeling products to get around state THC potency caps. Those cases were about classification and milligram limits. Murray is about health claims and warnings. A win or a loss in one pile does not decide the other, even when the defendant names overlap.

The companies’ best shield is the license itself. States built medical programs that taught operators to talk about conditions, terpenes, and “wellness.” Adult-use statutes then kept much of that shelf language while adding the smoking and pregnancy lines quoted above. Plaintiffs want a federal court to treat that overlap as deception. The defense wants it treated as compliance.

The Live Fight Is Over Emails, Not a Jury

Defendants moved to freeze discovery until Pallmeyer rules on dismissal. Plaintiffs’ Aug. 24 memorandum asks the court to deny that stay or, in the alternative, to allow a narrow start: a protective order, an electronically stored information protocol, opening document requests, and a fight over search terms and custodians. In a marketing case, the ESI protocol is the whole war. It decides whose inboxes, blogs, and vendor files get pulled.

Plaintiffs argue the alleged misrepresentations “are not specific to a particular product” but apply to “Defendants’ recreational cannabis business” and move through websites, blogs, social channels, and literature the companies funded. That is why they say the number of SKUs will not set the scope of discovery. Defendants want the pleadings tested first, before years of marketing archives become exhibits.

WHAT WE KNOW

• The dockets: Murray is 3:26-cv-50184. Palomar’s coverage case is 1:26-cv-9856. Blackketter is Madison County 2026LA000628. All three opened in 2026.
• The ask: Plaintiffs want money, a ban on adult-use medicinal claims, and harder health warnings. Palomar wants a declaration of no duty to defend or indemnify Cresco.
• The status as of Sept. 2, 2026: Motions to dismiss remained pending. The court had not ruled on the discovery stay.

WHAT IS UNCONFIRMED

• Class status: No class has been certified. The 41 names are proposed representatives, not a judged class.
• Coverage: No court has held that Palomar owes, or does not owe, a defense.
• The science in court: No finding has been entered on psychosis risk, efficacy, or any specific ad.

Pallmeyer can end Murray on the papers, trim it to state-law claims, or let discovery open on the marketing archive. Palomar’s case can run on its own clock. The medical language that helped these companies win licenses and, on May 4, a DEA filing is the language a former county prosecutor now wants a federal jury to call a scheme.

Disclaimer: This article is news reporting on pending civil cases and related insurance coverage pleadings. It is for information only and is not legal advice, medical advice, or a view on the merits of any claim or defense. Readers who have bought cannabis products, received a demand, or hold an insurance policy that may respond to similar suits should consult a licensed attorney in the relevant state before acting. Figures, docket numbers, and case status reflect the court papers and company statements described above as of the dates of those documents and may change as the judges rule.