Select Page

Author: admin

Oregon Industrial Hemp Litigation: Won’t You Be My Neighbor?

oregon hemp nuisance litigation
Nuisance pollination can cause a row.

In recent posts, we’ve discussed cases where a neighbor to a cannabis grow sued the grower for nuisance, claiming that growing cannabis interfered with the neighbor’s use of their land. See here, here, here, here, here, and here. These lawsuits relied on the non-cannabis landowner’s claims that the federally illegal cannabis business caused harm because of odor, disruptive activity, and diminution of property values.

As of last week, we have another variation on the nuisance theme. On August 31, 2018, Jack Hempicine LLC (“Hempicine”), a Polk County hemp grower, sued fellow hemp farmers for nuisance and other torts. Unlike the previous cases, this case claims that the harm to the property was caused when the other farms cross-pollinated the Hempicine farms and ruined its crops. Jack Hempicine LLC v. Leo Mulkey Inc., Case No. 18CV38712, Polk Cty. Sup. Ct.

In this case, Hempicine alleges:

Cross-pollination is a significant risk in the hemp growing industry. There are two specific risks. First, male plants that contain higher THC levels can pollinate female hemp plants that originally contain low THC levels. The resulting seeds produce plants with highest levels than the original female plant, which means the resulting plants also have lower amounts of CBD and CBG. Second, pollinated female plants may produce both male and female seeds. Female seeds are more desirable because female plants are grown to full maturity and harvested at the end of the season, whereas male plants die off shortly after pollination… The risk associated with cross-pollination is well known in the hemp and cannabis growing industries.”

According to the complaint, Hempicine began producing hemp and hemp seed in Polk County in 2015 and 2016. In 2016, Hempicine allegedly told defendants that Hempicine only produced feminized seed, warning the defendants of the risks from cross-pollination from male plants. Hempicine says that after this meeting, the defendants grew male hemp plants that cross-pollinated Hempicine’s female plants, giving them high levels of THC and making them unmarketable. The Hempicine complaint calculates its damages for loss to the 2016 and 2017 crops to exceed $8 million, and says that it will amend its complaint to include damages from the lost 2018 crop later.

Hempicine’s complaint seeks recovery under four separate legal theories. First, it alleges that the defendants breached a duty of care to Hempicine and was thus negligent. Second and third, it alleges that the defendants acted negligently or recklessly in growing male hemp plants on their property, and thus are liable for trespass or nuisance. Fourth, the complaint alleges that defendants grew male plants in the vicinity of the Hempicine farms that they knew would likely result in cross-pollination, and thus have intentionally interfered with Hempicine’s economic relations.

This is not the first time this issue has arisen. During the Oregon Legislature’s efforts to pass hemp legislation, cannabis producers noted the risk of cross pollination between cannabis and hemp, which of course are just two varietals of the cannabis sativa plant. Among other things, some cannabis producers urged the legislature to create separate agricultural zones for hemp and cannabis (which didn’t happen). There are also a number of lawsuits involving similar claims of cross-pollination by GMO crops. Hopefully this industry can find a way for hemp and marijuana farms alike to be neighbors.

Read More

Cannabis Science: What to Believe?

Alan was disoriented and his words were not making sense. His wife thought he might be having a stroke, so she took him to the emergency room where he was seen by the on-call neurologist. When asked, Alan admitted to using cannabis on a regular basis for many years. The neurologist then brought him a printout with the title: “Marijuana Use Associated with Increased Risk of Stroke, Heart Failure.” That was when I got the call asking me if this was for real.

Read More

Transporting CBD: Plan Your Route Carefully

hemp cbd transport
CBD transport routes can (and should) get weird.

The legal status of cannabidiol (CBD) has long been complicated. The Agricultural Act of 2014 (2014 Farm Bill) allowed for the cultivation of “industrial hemp”, defined as the cannabis plant that contains less than .03% tetrahydrocannabinol (THC) on a dry weight basis, as long as that hemp was grown pursuant to a state’s guidelines. The 2014 Farm Bill lead to a massive influx of industrial hemp-derived products containing CBD (Hemp-CBD). However, not all states have legalized industrial hemp, making the U.S. a quilt of different rules and regulations on industrial hemp and Hemp-CBD. We’ve written about how state law impacts Hemp-CBD, in regards to where a distributor can sell its products. State law considerations are also relevant to consider when transporting Hemp-CBD.

Consider the case of Anita Maddux. According to Planet Jackson Hole, Maddux was driving through Wyoming en route to Montana to care for her sick mother when she was pulled over for her expired California license plates. It turns out Maddux was driving with an expired license, no insurance, and a 10-millimeter bottle of CBD she obtained from a health store in New Mexico. At the Teton County Jail, police tested the CBD oil for THC. The test results confirmed the presence of THC but the amount of THC. Maddux ended up spending 36 hours in jail before being released on a $1,000 bond.

Recently, the Jackson Hole News & Guide reported that Teton County Deputy Prosecutor Clark Allen intended to dismiss the felony drug charge. However, Allen noted that “I don’t want to send the message that we will not pursue these cases[.] We will pursue these types of cases under the right circumstances. This case just isn’t it.” Allen went on to acknowledge that Wyoming law is not clear when it comes to CBD oils: “Our laws are way behind the curve with the products we’re dealing with[.] A citizen takes a big risk when they possess these products.”

A similar story played out in Cary, South Carolina where Ayman Tamim Nu Mann Alqazah, a wholesaler of e-cigarettes and other similar goods, was charged with trafficking marijuana after a box of CBD-infused gummies he ordered popped open while in transit. The News & Observer reports that box opened while it was transferred from a truck in Florida. Alqazah’s order totaled four boxes weighing 241 pounds. Alqazah now faces drug trafficking charges.

Hopefully, like Maddux, Alqazah’s charges will eventually be dismissed. Regardless of the outcome, Alqazah and Maddux show that shipping CBD products comes with substantial risk. Though many states have legalized the cultivation of industrial hemp in some form, the law surrounding Hemp-CBD remains confusing. Additionally, enforcement action is sporadic. Often, Hemp-CBD products are distributed without incident. Other times, law enforcement will seize Hemp-CBD products to confirm that they do not contain THC and then will either destroy or return the products depending on test results. Other times, as was the case with Maddux and Alqazah, criminal charges are levied against individuals who possess Hemp-CBD.

All of this means that businesses must carefully consider how their products reach consumers. For example, imagine that Hemp Co. is planning to distribute Hemp-CBD. Hemp Co. sources its industrial hemp from a farm in Medford, a small town in Southern Oregon. Hemp Co. has a large order to fill for a natural food store in Billings, Montana. Hemp Co. decides that the fastest and cheapest method of delivery is ground shipping through Idaho. However, according to a 2015 informal opinion from the Idaho Attorney General, the state makes no distinction between industrial hemp and marijuana. Therefore, Hemp-CBD, even without the presence of THC, is not permitted in Idaho. Even though Hemp Co.’s products come from a farmer who cultivates in-line with Oregon’s industrial hemp program (and relevant federal law), that does not insulate Hemp Co. from liability if the shipment is inspected by Idaho State Police. Even if Hemp Co. re-routes to travel through another state, it still would likely have to pass through Idaho, Wyoming, South Dakota, or North Dakota. Though not all of these states are as “bad” as Idaho, none of them have CBD-friendly laws. Paying for air-shipment may seem like a solution, but there are numerous regulations and transit-company polices that Hemp Co. must deal with. All of this requires careful planning and risk management.

I was recently watching an old episode of the TV show Kung Fu, which chronicles Caine, a young American played by David Carradine, training to be a Shaolin Monk traveling the Old West. At one point Caine asks his teacher Master Tae “what is the best way to deal with force?” Master Tae responds, “as we prize peace and quiet above victory, there is a simple and preferred method. . . Run away.” Hemp-CBD distributors should heed this advice and “run away”, to the best of their ability, from states like Wyoming and Idaho.

Transporting Hemp-CBD is inherently risky. CBD businesses should consult with attorneys and logistic specialists to plan ahead and avoid running into the same problems as Maddux and Alqazah.

Read More

The Law on CBD-Infused Alcoholic Beverages

cannabis cbd alcohol beer

This past year, the country has witnessed widespread interest in the use of cannabis in its nutraceutical (when added to food or drinks) form. Cannabidiol (“CBD”), the non-psychoactive chemical compound found in the cannabis plant, has gained great popularity among alcohol beverage companies. The growing popularity of CBD-infused products combined with their mainstream nature has given alcohol beverage companies the false impression that blending CBD into their products is an easy process. This post bursts the myth by highlighting the regulatory labyrinth into which alcohol beverage manufacturers must venture to enter this growing, popular market.

Alcoholic beverages are regulated by federal and state law. Consequently, beer, wine and spirits producers are generally accustomed to navigating rules, various forms of licensure, and modes of compliance related to their industry. Their familiarity with comprehensive regulations makes alcohol beverage companies well equipped to navigate the intersection between alcohol and cannabis, which is heavily regulated at the state level.

Unlike alcohol, though, many forms of cannabis are strictly federally prohibited. As such, “marijuana” and “tetrahydrocannabinols” (THC) are listed on Schedule I of the Controlled Substances Act (“CSA”). The CSA defines “marijuana” as:

“all parts of the Cannabis sativa L. plant whether growing or not; the seeds thereof; the resin extracted from any part of such plant; and every compound, manufacture, salt, derivative, mixture, or preparation of such plant, its seeds or resin.”

The CSA exempts certain parts of the cannabis plant from the definition of marijuana, including hemp-derived CBD products that are manufactured with hemp grown as part of a Farm Bill-authorized state pilot program. Accordingly, only CBD derived from industrial hemp (“Hemp” or “Hemp-CBD”) is allowed in the formulation of CBD-infused alcoholic beverages.

The U.S. Alcohol and Tobacco and Trade Bureau (“TTB”)’s 2000 Hemp Policy (the “Policy”) dictates how manufacturers may use Hemp-CBD in their alcohol products. The Policy sets forth the requirements for formulas and statements of process producers may use. Although the TTB permits the use of Hemp derivatives in alcohol products, the federal agency strictly prohibits producers from using “depictions, graphics, designs, devices, puffery, statements, slang, representations, etc. implying or referencing the presence of hemp, marijuana, and other controlled substance; or any psychoactive effects.” In other words, producers should refrain from using the term “CBD” in their formula or statement of process as the TTB seems to interpret the term as unlawful under federal law.

In addition to submitting the list of ingredients and the method of manufacture they intend to use, producers must provide the TTB with an analysis conducted by a U.S. lab of the hemp components that will be used in the product. A detailed description of the method employed by the U.S. lab must also be presented to the TTB.

The TTB will approve the formula or statement of process if the finished product does not contain a controlled substance. Once the hemp components have been tested for controlled substances, producers must ensure that detailed records are kept at the manufacturing premises for inspections, which we hear may occur as early as within the first month of production.

Once a producer receives TTB approval, which may take up to two years, the producer must then comply with state rules and regulations. In Oregon, for example, manufacturers must provide proof to the Oregon Liquor Control Commission (“OLCC”) that they have met the TTB formula requirement and meet the OLCC labeling requirements before they can manufacture and sell the infused beverage in the state. Oregon beverage producers who intend to sell their infused product outside of Oregon must also show the OLCC that they comply with the TTB labeling requirements.

As this post underlines, obtaining approval for the manufacture and sale of hemp-CBD infused alcoholic beverages is a complex process, due primarily to the uncertain nature of hemp-CBD laws. Therefore, it is crucial for any company intending to enter this market to consult with an experienced, well-versed law firm (like us!) prior to moving into this trending space.

Read More

Should You Use Cannabis to Prevent Illness?

Our bodies consist of many unique physiologic systems whose sole purpose is to maintain an internal balance called homeostasis. We know the pancreas releases insulin to balance glucose levels between the bloodstream and cells. The thyroid gland releases thyroid hormone, which regulates vital bodily functions related to metabolism, body temperature and much more. Simply put, our bodies are working constantly to stay balanced in response to our external environment.

Read More

Hemp Testing

Altitude Consulting is not only a hemp testing laboratory, but an organization trusted to consult within the industry. Home growers and commercial farms around the world recognize that EPA based methodologies assure the most accurate and consistent data. Give us a call or bring us a hemp potency, residual solvent or terpene profile sample and see the difference.

Altitude Consulting
Denver’s most effective cannabis testing company.