A coalition of marijuana companies is filing lawsuits against businesses across Missouri, accusing dozens of stores of illegally selling marijuana under the guise of “THCA hemp flower” and undercutting the state’s regulated cannabis market.
The lawsuits target nearly 40 stores in St. Louis County and 17 businesses in the Kansas City area, including major hemp chains such as American Shaman and CBD Kratom. More lawsuits are expected next week as the coalition expands its effort to halt what its attorney, Chris McHugh, described as widespread unfair competition.
The lawsuits argue that the arrangement creates an uneven playing field, with licensed marijuana cultivators paying nearly $30,000 a year in fees and dispensaries more than $11,000, in addition to extensive testing and compliance costs, to sell a product the suit describes as “chemically identical” to THCA hemp flower.
McHugh said the coalition — made up of roughly 20 marijuana companies — turned to the courts only after years of inaction by state lawmakers, who he said failed for three consecutive sessions to pass regulations governing THCA products.
Ever since the 2018 farm bill removed hemp from the federal controlled substance list, hemp THCA flower has made its way into more smoke shops and stores every year.
“We’ve sat by and watched this grow with disbelief,” McHugh said. “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.”
McHugh’s clients are asking for monetary damages and a permanent injunction barring the stores from marketing, distributing or selling any marijuana or THCA flower.
Jay Patel, owner of one of the stores being sued and a board member for the Missouri Hemp Trade Association, called the lawsuit baseless and unfair.
“This is an attempt to stomp out competition and engage them in a costly and time-consuming process,” Patel said.
Patel doesn’t deny the products are chemically identical, but he said federal law allows him to sell his product because it tested under the guideline of .3% delta-9 THC, which is the intoxicating component of the cannabis sativa plant. He said he has documentation proving his products have been grown on a hemp farm and have been tested to make sure they align with federal law.
The association, he said, has urged lawmakers to pass labeling, testing and age-gating regulations in Missouri for THCA hemp flower. In absence of that, his store and other association members have self-imposed these guardrails, though he acknowledges there are some bad actors who don’t.
There are 10,000 retailers in Missouri that deal with hemp-based products, Patel said, yet the marijuana coalition is going after small-scale businesses in St. Louis. At least one St. Louis store that the coalition sued doesn’t sell hemp products at all, Patel said, and another two are already permanently closed.
“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.”
What is THCA flower?
There’s a saying: If it’s not lit, it’s legit.
For the hemp industry, if weed has tested below .3% percent delta-9 THC before it’s smoked, then it’s hemp and legal to be sold outside of licensed dispensaries in Missouri.
“There’s lots of marijuana in the industry that if it was started outside of the marijuana industry, it could be called hemp,” said Brian Riegel, a leader with the Missouri Hemp Trade Association, “but because it started in a marijuana facility, it will always be marijuana.”
The association argues the sued businesses are within their federal rights to sell THCA flower and will be supporting the businesses in their legal defense.
When the federal government was defining marijuana and hemp, it used the standard that hemp is anything under .3% percent delta-9 THC by dry weight.
The problem is when marijuana is in its raw form, it typically has very little delta-9 THC. It has THCA, and that transforms into delta-9 THC when heated, or decarboxylated.
In other words, a joint won’t get you high until you light it.
When Congress passed the farm bill in 2018, it didn’t specify “total THC” when legalizing hemp, which would have included THCA, according to the Cannabis Regulators Association, which represents state marijuana regulators across the nation.
Since then, Congress has heard from the regulators association and others that the oversight has led to businesses selling “THCA hemp” flower, or buds, containing less than .3% delta-9 THC.
THCA products — including flower, vape cartridges and concentrates — are “indistinguishable” from marijuana products sold in dispensaries, the association stated in comments to Congress.
That’s why in November, Congress passed a provision in the spending bill to prohibit hemp products from having more than .3% of total THC, which is intended to ban the open sale of THCA flower.
Proposed bills in Missouri
Missouri lawmakers are set to debate two bills next week that will bring the state in alignment with the new federal definition that’s set to go into effect in November.
One proposal by Republican state Rep. Dave Hinman of O’Fallon would allow Missouri to sell the products if Congress decides to permit the sale.
The other bill, sponsored by Republican state Sen. David Gregory of Chesterfield, includes an emergency clause, meaning it would be enacted as soon as lawmakers approve it and the governor signs it. And the ban wouldn’t reverse if Congress passes legislation allowing the sale of intoxicating hemp products.
McHugh said a preliminary injunction may become unnecessary if Gregory’s bill passes, but not if Hinman’s proposal is approved.
“This is marijuana,” he said. “No one in Missouri ever voted for the unregulated, unfettered sale of marijuana to anyone who walks by. So that’s what’s happening, and why we wouldn’t do everything we can to stop that as soon as possible, I don’t know.”
Nicholas Thomas, co-owner of a gift shop in University City named in the lawsuit, said he has one small display case with a few THCA flower products and they’re sold in a separate area in the store that only people older than 21 can enter.
Local police have allowed him to continue selling it, after he explained it's legal under federal law. Police officers can only enforce state law, unless they’re partnering with a federal law enforcement agency, according to the Law Enforcement Legislative Coalition, which represents police chiefs across Missouri. Thomas said he plans to continue selling it until the federal law changes in November.
Thomas called the coalition’s legal argument “flawed” because the federal definition of hemp doesn’t include THCA, only delta-9 THC.
“To me, it’s kind of like if the law says I can only sell 12 dozen cookies in a day,” Thomas said. “Well, I sold a tub of cookie dough. Now, do I need to do the math on how many cookies that tub makes? Nobody’s going to expect me to do that. And the only thing difference between cookie dough and cookies is how long it’s in the oven for.”
This story was first published by the Missouri Independent.
