A lawsuit claims that “if Dark Horse is prevented from selling these products or using them in any other way,” “the financial implications will be extreme”.
By Rebecca Rivas, Missouri Independent
A Missouri judge on Wednesday denied a marijuana company’s attempt to stop the recall 62,000 products that contained the company’s THC concentration, which the state considered a “potential threat to safety and health”.
Delta Extraction is a licensed marijuana manufacturer based in Robertsville that specializes making THC distillate. This highly potent form of THC can be used to make vape pens and edibles.
The state regulatory agency suspended Delta Extraction’s license on August 2 after accused of the company sourcing “untested marijuana or converted hemp outside of Missouri licensed cultivation facilities.”
After a few days, the state placed a hold on these products and , then on August 14, a complete product recall was issued.
Delta Extraction claimed in its motion of August 16 that the state was waging a “unlawful, unjustified and unexplained campaign to destroy Delta Extraction’s business by arbitrary, illogical, and arbitrary administrative actions targeted at Delta Extraction’s products.”
Cole County Circuit Court Judge Cotton Walker decided on Wednesday that the company had no grounds to challenge its recall as it had not exhausted the administrative process.
Delta appealed to the Administrative Hearing Commission the day after their license was suspended by the state. This decision is still pending.
Walker wrote that if this court had jurisdiction over both the hold and recall, the parties could adjudicate on the same facts in both this court and at the Administrative Hearing Commission. This creates an absurd outcome. “The plaintiff’s failure of administrative remedies to exhaust deprives this court of jurisdiction.”
Delta claims that it has two brands, Midwest Magic and Conte, under which they distribute their products.
Conte Enterprise Holdings, represented by St. Louis lawyer Alec Rosenblum, submitted a Motion for intervention in the case Monday.
The motion claims that the statements are misleading and refers to “agreements concerning services and trademarks in cannabis products”.
Delta’s petition states that, as part of the manufacturing process, Delta removes THCa (the active ingredient in marijuana) from flowers to be used in infused products such as drinks, concentrates, vape cartridges and gummies. It states that they were “also using industrial hemp to manufacture some of their products, as well THC-A oil.”
THCa, a cannabinoid in raw marijuana only becomes intoxicating after heating. Industrial hemp contains a small amount of THCa that can be extracted, but most people use the CBD from hemp flowers to chemically convert to THCa. This process has become more popular since industrial hemp was made legal by the federal government in 2018.
Missouri cannabis regulators claimed that they had not allowed the practice of mixing hemp-derived THC and marijuana THC on the regulated market. Delta, however, argued that it was only when the new cannabis regulations came into effect on July 30, 2014 that the state specifically prohibited the practice.
The company claims to have stopped using this method after July 30.
Delta officials told the commission that these THCa hemp oils were added only to Conte products.
Dark Horse Medicinals of Arkansas, which purchased Conte distillate from Delta Extraction in May for nearly $325,000, sued both companies on August 21.
The lawsuit claims that Dark Horse would have not purchased the distillate had it not been in compliance with Missouri marijuana regulations and laws, as well as if the product could not be sold or used in Missouri.
The company, which added the distillate to its products as many other manufacturers statewide did, is suing for damages due to the “considerable” capital it stands a chance of losing.
The financial consequences would be severe if Dark Horse was prohibited from using or selling these products.
The original publication of this story was by Missouri Independent.
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