Illinois CBD Company Led By State Lawmaker Forced To Refund Investors After Investigation

If it sounds too good to be true, it usually is. Even when a state lawmaker is behind it.

A CBD marketing firm, touted as a “movement” to help thousands of African Americans sell hemp-based CBD in Illinois, has been forced to refund more than $144,000 to its investors after the secretary of state’s office determined the firm promised much more than it could deliver.

According to the Chicago Sun-Times, State Sen. Patricia Van Pelt hosted cannabis investment workshops for a CBD company, WaKanna For Life LLC, which launched as Illinois’ adult-use legalization push gained momentum in early 2019.

In a promotional video for WaKanna, Van Pelt claims she’s “riding the wave with the rich” and tells a crowd that opening an online dispensary could make them “marijuana millionaires.” Van Pelt, a Democrat from Chicago, also pitches WaKanna’s network of distributors to sell products containing CBD.

The company calls itself “The crown jewel of CBD”, but since launching has faced numerous consumer complaints and investigations – involving even the Federal Trade Commission and the Illinois attorney general’s office, according to the Sun-Times. The FTC has fielded at least five complaints over the past couple years, including allegations the company was sending unsolicited messages, requesting personal information and charging people to attend the CBD training seminars.

WaKanna sidestepped regulations in 2019 by raising $305,000 from 71 investors — more than double the number of legally allowed backers that a company can have when seeking an exemption to avoid registering its securities. To qualify for the exemption, WaKanna had to refund investments from out-of-state residents.

The company gave back $62,000 to investors paying in installments, per the Sun-Times, while another $82,250 went back to five other backers. The offer specifically warned that WaKanna was a risky investment with a short operating history, “ongoing further capital needs” and other risk factors.

WaKanna CEO Melissa Boston blamed the company’s problems on bad legal counsel. Boston claimed, according to the Sun-Times, that the CBD company should not have offered investment opportunities to out-of-state residents .

“There was never any intent nor attempt to evade the law,” Boston said. “Quite the opposite. WaKanna sought and followed the advice of an attorney.”