Colorado AG Sues Hemp Company for Alleged Illegal THC Sales | Westword

Colorado AG Sues Hemp Company for Alleged Illegal THC Sales

"These products were not industrial hemp: they were marijuana."
Intoxicating hemp products exist in a "backdrop of a complex legal and regulatory framework," according to the state Attorney General.
Intoxicating hemp products exist in a "backdrop of a complex legal and regulatory framework," according to the state Attorney General. Elsa Olofsson/Unsplash
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The Colorado Attorney General's Office has filed suit against a Greeley hemp company and its owner for allegedly selling cannabis products with THC content up to 35 times higher than the legal limit. But the defendant says the AG's office is blowing smoke.

The suit, filed June 11 in Weld County District Court, alleges that Gee Distributors LLC, doing business as CBDDY, not only sold high-THC edibles, flower and concentrates marketed as hemp and CBD products, but also forged lab analysis documents and failed to ensure that minors weren't purchasing its products online.

"Defendants’ representations about the contents of their products, including that these products were industrial hemp based on the advertised Delta-9 THC content, were thus false and misleading," the AG claims. "These products were not industrial hemp: they were marijuana."

Through his attorney, CBDDY owner Christopher Eoff strongly denies the allegations, which are part of the first industrial hemp enforcement action ever taken by the Colorado AG's office — partly because intoxicating hemp is no simple issue.

Save for a 0.3 THC limit, hemp and marijuana are the same plant, but hemp's federal legalization in 2018 sparked a nationwide market for hemp-derived products with THC that have similar effects to marijuana products sold at licensed dispensaries. These modified and synthetic forms of THC have been available for purchase online, while even bolder entrepreneurs have opened retail outlets selling products they claim to be hemp but are packed with THC.

Popular edibles companies in the licensed marijuana space have launched hemp-derived THC brands, even closing licensed marijuana operations in Colorado to focus on the hemp products. Congress could close that loophole in the next Farm Bill, but the Colorado AG's lawsuit notes that intoxicating hemp products exist in a "backdrop of a complex legal and regulatory framework."

Federal court decisions have largely upheld intoxicating hemp sales, but law enforcement in other states has raided hemp stores and other retailers for selling unlicensed THC products, and restrictions have already been implemented within Colorado. One of those restrictions, a 2023 law banning the sale of hemp products with a certain amount of THC in Colorado, allows companies to produce intoxicating hemp products in Colorado — but only if they're shipped to and sold in other states.

The lawsuit details "multiple undercover purchases" in 2023 and 2024 made by AG investigators in Colorado, alleging that everything purchased by the AG's office was represented as an industrial hemp product with no more than 0.3 percent THC, but all products contained much higher amounts than the legal and advertised dosages.

In the lawsuit, the AG's office claims that false representations could have "serious potential consequences," including unexpected intoxication, failed drug tests by unknowing users, detainment by law enforcement and exposure to "serious legal consequences merely for receiving shipment" of intoxicating hemp products in states where they are restricted or illegal, such as Colorado.

"Though the company claimed their products were industrial hemp, even going so far as to claim they were '100% compliant' with federal law, analysis of samples that investigators purchased from the company revealed THC content far higher than legal limits," according to the AG's office.

In a statement sent to Westword, Eoff says allegations of CBDDY containing 35 times the legal limit of THC are "misleading," since Delta-8 THC and Delta-9 THC, while similar, are not the same. "The lab used by the State of Colorado lacks the capability to differentiate between Delta-8 THC and Delta-9 THC on the chromatogram. Thus, the reported Delta-9 THC levels are inaccurately inflated."

The complaint alleges multiple violations, including the false advertisement of products as "industrial hemp," the alteration of laboratory reports, misleading health claims, inadequate age verification, and lack of proper licensing. It also claims that CBDDY "forged and/or altered" certificates of analysis (COAs) for at least five different products in 2022 and 2023.

According to the AG's office, the COAs listed a business called Mile High Lab as the laboratory providing potency test results, but "the prior owner and operator of Mile High Lab confirmed that any COA with its name on it dated after 2021 was not issued, certified, authorized, or approved by Mile High Lab, which was no longer in business after 2021."

CBDDY is also being sued by the AG for misleading health claims about its products and not requiring proof of age to purchase products "until on or around January 2024," according to the filing.

"Prior to then, the only procedure CBDDY used to verify age and potentially prevent a minor from purchasing intoxicating Cannabis products was one pop-up on the CBDDY Website — which did not always appear — asking to click a button stating that they are 21 years old or older. There was no request for proof of identification or other procedure to verify age throughout the purchasing process," the lawsuit reads. "Other intoxicating products, such as alcohol and recreational marijuana, have strict age requirements and proof-of-age requirements that businesses are obligated to use."

Eoff disputes those claims, as well.

"We ensure all products meet the necessary legal requirements and are tested by certified laboratories to confirm their compliance with the 2018 Farm Bill, which defines industrial hemp as containing no more than 0.3 percent Delta-9 THC on a dry weight basis. All Certificates of Analysis are transparently provided to customers through our website and product packaging," Eoff says in a statement. "Our marketing strategies are designed to inform consumers accurately and transparently about the nature and benefits of our products. Any health claims made are substantiated by scientific research and are not intended to mislead or misinform the public.

"Additionally, we take age verification seriously and have implemented robust systems to ensure that our products are not sold to minors. Our online sales processes include stringent age checks to comply with all regulatory requirements," it continues. "We are committed to maintaining the highest standards of integrity and transparency in our operations. CBDDY will continue to cooperate fully with the authorities to resolve these allegations and demonstrate our compliance with all applicable laws and regulations."

As of June 25, CBDDY's website is still operating and offering sales of hemp-derived THC products, but Colorado addresses are no longer accepted for orders.

The case is a civil matter, and no criminal charges have been filed, according to the AG's office, which is seeking an injunction that would prohibit CBDDY from "engaging in any deceptive trade practice" in Colorado, as well as a fine of no more than $20,000 and an undetermined amount in civil penalties that would be set at trial.
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