Hemp Delta-9 Battles Heat Up

California-based licensed cannabis operator March and Ash has taken numerous hemp-based cannabis companies to court. The case was filed in September 2023 in the county of San Diego. It centers on the argument that while March and Ash is expected to comply with stringent rules and regulations related to cannabis, hemp businesses selling competitive delta-9 products aren’t.

The case notes that laws for hemp producers were intended to foster nonpsychoactive hemp production. That hemp was meant as an agricultural product with less than 0.3% of the THC product that would give the consumer a high. March and Ash claims these producers are selling hemp delta-9 products exceeding the 0.3% threshold.

The complaint states:

Many bad actors make, distribute and/or sell chemically synthesized industrial hemp products in and/or into the State in violation of these laws and regulations, and market these products as “legal cannabis products. Many bad actors, including defendants, sell inhalable hemp products in and/or into California in direct violation of AB 45.

Accused Bad Actors

The bad actors that the complaint refers to are as follows:

• Savage Enterprises
• Cali Extrax LLC
• DeltaExtrax LLC
• Hazy Extrax LLC
• 3C LLC; TreWellness
• Cookies Creative Consulting &Promotions, Inc.
• Binoid LLC
• Canably, Inc.
• Cutleaf Stores LLC
• DOES 1 through 1,000

Too Much THC

The lawsuit claims that many of the defendants have manufactured, transported, stored, distributed, marketed, and sold these hemp products that contain total THC levels in excess of 50.0%, and even 78.1% (which is more than 260 times the level of THC allowable in legal hemp products under dtate law).

The complaint stated, “Samples of products sold by certain Defendants have over 72% THC-P, which has been demonstrated to have thirty-three (33) times more psychoactive potency than naturally derived THC, meaning that such designer product effectively has a 2,376% THC concentration in terms of psychoactive potency (which is 7,920 times the psychoactive potency of the 0.3% THC limit on legal hemp products).”

In addition to complaining about the high levels of THC in these products, March alleges that the products are often sold at a lower price than regulated cannabis products containing THC and claim to be legal cannabis products.

Furthermore, the complaint accuses the parties of marketing products to people under the age of 21.

Cookies

The complaint specifically calls out Cookies, saying, “The actions of Defendant Cookies Creative Consulting & Promotions, Inc. (“Cookies”) are particularly flagrant because Cookies or its affiliate(s) hold State licenses and local permits to engage in commercial cannabis activities within the State’s comprehensive system for cannabis products. Cookies nonetheless manufactures and/or causes the manufacture, distributes, markets, and sells Illegal Designer Drugs in California, including utilizing its web platform for the sale of regulated cannabis products to do so. Orders made on Defendant’s website for Illegal Designer Drugs were fulfilled including sales of products in the State containing highly psychoactive compounds such as THCa (when heated), Delta 9 THC, and Delta 8 THC.”

Hurting Licensed Cannabis

March and Ash go on to suggest in the complaint that falling California cannabis tax collection is due to the inability of regulated cannabis to compete with unregulated hemp producers. The complaint asks that the accused give back the illegal profits, and various damages and pay for the court costs.

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