Missouri Pot Shops Sue to Block Sales of THCA Hemp

Marijuana is legal in the Show Me State, and hemp-derived intoxicating cannabinoids, THCA in particular, are unregulated and widely available in the state. Now, after the state legislature has failed for the past three years to either regulate or ban such products (except for intoxicating hemp beverages), tensions between the state's weed and hemp sellers have reached the point where a coalition of marijuana companies has filed a pair state court lawsuits charging that  than 60 stores in the Kansas City and St. Louis areas are illegally selling marijuana under the guise of THCA hemp flower.

The complaint accuses the hemp sellers, including major chains such as American Shaman and KratomCBD, of "large-scale trafficking of high THC marijuana and marijuana products disguised as industrial hemp." The plaintiffs assert that the hemp sellers are undercutting the regulated legal marijuana market and engaging in unfair competition with weed sellers because they do not have any licensing or regulatory costs.

Plaintiffs seek monetary damages and a permanent injunction barring the stores from selling marijuana or THCA hemp flower. THCA is used not only in flower form, but also in vapes and concentrates

The 2018 federal farm bill legalizing hemp specified that it must contain less than 0.3 percent delta-9 THC by dry weight but did not include other intoxicating cannabinoids such as THCA. Once it is decarboxylated (a fancy way of saying burned or smoked), though, THCA converts to delta-9 THC, raising the THC level of the product well above the 0.3 percent specified in the hemp law and creating a product on which people can get high.

This is why Congress passed a provision in the bill ending the federal government shutdown last November that will prohibit hemp products having more than 0.3 total THC, as well as setting strict dosing limits on cannabinoids. Congress has until the coming November to replace the ban with a regulatory scheme—or to extend the moratorium on the ban for another year or two. Otherwise, it goes into effect in little more than nine months.

"We've sat by and watched this grow with disbelief," said Chris McHugh, attorney for the plaintiffs. "They're selling marijuana to anyone and they're arguing that they have the right to do this -- whether it be a kid, whether it be somebody picking up for DoorDash -- with no regulation, no guidelines, no guardrails and it's just getting bigger and bigger."

But Jay Patel, a Missouri Hemp Trade Association board member and owner of one of the stores being sued, said the lawsuit was baseless and unfair. "This is an attempt to stomp out competition and engage them in a costly and time-consuming process," Patel said.

Patel added that the association had urged lawmakers to pass labeling, testing, and age limit regulations for THCA and that with the legislature's failure to act, association members had taken it upon themselves to impose such guardrails. He also complained that of an estimated 10,000 retailers selling intoxicating hemp products in the state, the pot sellers are only going after a relative handful in the state's largest cities.

"This lawsuit is much more malicious," he said, "and they're picking stores that are close to them, perhaps, or just looking at smaller fish to them that might not have the resources to battle them. And I think that they're trying to intimidate store owners, with a focus on minority owners."

Meanwhile, lawmakers still have hemp on their minds. Two bills that would align the state with the new federal hemp definition set to go into effect in November are set for debate next week. One bill, House Bill 2461 from Rep. Dave Hinman (R) would allow intoxicating hemp product sales if Congress decides to allow them. The other measure, Senate Bill 904 from Sen. David Gregory (R) would ban intoxicating hemp products immediately with an emergency clause and has no provision for change if Congress loosens federal law. If the latter bill becomes law, this lawsuit will become moot.