The Criminal Hemp Processing Case That Could Have A Profound Impact On The Oregon Hemp Sector


There’s a battle brewing in Oregon state court that may possibly have a critical influence on Oregon’s industrial hemp market. We’re writing to clarify the troubles and supply further context for this very controversial case.

What’s taking place?

Essential Compounds (“Key”), an Oregon Division of Agriculture (“ODA”)-registered industrial hemp handler (i.e., processor) in Albany, Oregon, and its CEO, Alexander Reyter, have been not too long ago indicted on 3 counts of Unlawful Importation/Exportation of Marijuana and 1 count of Unlawful Manufacture of Marijuana.

It all started when Essential allegedly shipped crude hemp-derived CBD oil to a facility in Massachusetts for additional processing. When the resultant item was shipped back, the package’s “suspicious” odor evidently got the interest of neighborhood UPS workers, who alerted Linn County law enforcement. Some of the item which, according to the Massachusetts processor, was residual waste mistakenly incorporated in the shipment, allegedly tested at five% THC (above the .three% limit for hemp merchandise). This prompted the Linn County Sheriff Division to raid Key’s processing facility in March. The raid revealed Essential enterprise records that, according to an investigator, indicated that more than 900 pounds of Key’s hemp-derived extract had THC levels above .three%. The Linn County DA subsequently filed an indictment charging Essential with the unlawful importation/exportation of marijuana (primarily based on the Massachusetts shipments) and the illegal manufacture of marijuana (primarily based on what the raid uncovered). The importation/exportation counts are at least understandable, offered that the allegedly “hot” waste item was shipped across state lines.  The unlawful manufacture count is much more troubling, having said that, for the reason that the alleged infraction took spot wholly inside the state, and, according to professionals, resulted from a standard portion of the hemp extraction approach.

According to Reyter, the “hot” hemp merchandise seized in the course of the raid tested above .three% for the reason that they have been a all-natural byproduct of the extraction approach or for the reason that the merchandise have been “in progress” (presumably which means the THC would be diluted or removed prior to finishing the approach). Nevertheless, the Linn County DA insists that the merchandise qualify as “marijuana items” below criminal law, and for that reason demands an OLCC recreational marijuana license to generate.

ODA employees has expressed help for Reyter’s explanation to the impact that, so extended as the merchandise test below .three% at two points in the manufacturing process—first, prior to the supply hemp is harvested and second, prior to the completed merchandise are sold to a consumer—ODA considers the item “hemp” all through the approach. Nevertheless, Senate Bill 1544 (“SB 1544”), passed in 2018, defines “marijuana item” to contain any industrial hemp-derived item that “contain[s] much more than .three % [THC].” But, SB 1544 also states that “[a] particular person other than a marijuana retailer that holds a license issued [by OLCC] may possibly not sell a marijuana item to a customer” (emphasis added). When study collectively, ODA interprets these provisions to let for a hemp item to exceed .three% THC so extended as it is diluted back down beneath the .three% threshold prior to sale to customers. But Linn County apparently requires a much more restrictive strategy: Any item that includes much more than .three% THC, no matter if derived from psychoactive “marijuanaor hemp, is a “marijuana item,” which subjects its manufacturer to criminal sanctions (unless an OLCC-licensed processor).

What does this imply for the hemp market?

The outcome of this case could have important ramifications for the Oregon hemp/CBD market.  If the judge or jury sides with Linn County, any Oregon hemp handler whose approach generates THC waste item (or consists of a phase in which the hemp item temporarily includes THC in excess of .three%) could be targeted by neighborhood law enforcement for criminal marijuana violations.

Ideally, the Court will come across in favor of the defendant and the Oregon Legislature will resolve this statutory discrepancy in favor of the industrial hemp market prior to any other prosecutions happen. But the Legislature does not convene once more till February 2020.  In the meantime, having said that, if you are a hemp handler, hemp item seller, or otherwise deal in hemp merchandise, you may possibly want to bring this challenge to the interest of your neighborhood legislator.

We’re also right here to enable with any inquiries you may possibly have about this case or any other hemp-connected troubles.

Re-published with the permission of The Emerge Law Group


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