Washington State agrees with Einhorn brands on synthetic THC probe

Washington state’s Liquor and Cannabis Board announced Wednesday that it has reached a settlement with Unicorn Brands LLC regarding “a year-long investigation and multiple Administrative Violations (AVNs) relating to the manufacture of synthetically derived THC from hemp and its distribution into the state-regulated cannabis market.” .”

The board said Unicorn Brands “co-operated with the investigation” and dropped the conversion process in question. Last summer, the Liquor and Cannabis Board issued a policy statement that “clarified that synthetically derived THC from hemp is prohibited under current rules and laws.”

“This was an important case about the integrity of the legal cannabis system that was approved a decade ago and now thrives in Washington with a carefully controlled system of production, processing and sale of cannabis to adults,” said David Postman, chairman of Liquor and Cannabis Board in an email to state marijuana license holders, reminding companies “of prohibiting the type of lab conversions involved in the Unicorn case.”

Last October, the board’s Education and Enforcement Division issued Administrative Violation Notices to Unicorn Brands for four violations in their synthesis process: “1) license abuse, 2) criminal conduct, 3) non-compliant extraction, and 4) traceability errors.”

Under the terms of the “comprehensive agreement” between the two sides, the board said Unicorn Brands “will not resume the conversion of hemp into THC and will end a lengthy and complex investigation.”

The board provided more details on the back-and-forth leading up to this week’s settlement.

“After extensive negotiations, the agency and Unicorn have agreed to settle these cases. As part of this settlement, the Enforcement and Education Division has agreed to fully withdraw the charges of alleged criminal conduct,” the board said in a statement. “In return, Unicorn establishes and fully admits the remaining three violations: License Abuse, Non-Compliant Extraction, and Traceability Errors. In addition, Unicorn has agreed to pay customary fines for the three specified violations, accept forfeiture of seized products, and waive further regulatory review. Finally, Unicorn has agreed to the condition that “it may not use its license to produce or manufacture delta-8-THC, delta-9-THC or similar synthetically-produced THC from hemp-based sources in Washington State unless expressly stated to do so.” expressly declared authorized by a subsequent change in state law permitting Licensee to do so.”

The case underscores concerns about the burgeoning Delta-8 market as state regulators across the country struggle to keep track of new (and in some cases illegal) products.

In its Wednesday press release, the Liquor and Cannabis Board urged lawmakers in Washington to take steps to secure more regulation on this front.

“The next important step in protecting public health is to eliminate the burgeoning market for Delta-8 products and other synthetically derived products outside of the regulated marketplace. These gummy bears and other edibles are being sold illegally in convenience stores and online in Washington and across the country. We hope that in the 2023 legislature, action will be taken to help eliminate these illegal sales,” the board said.

Regulating Delta-8 is far from the only pressing issue facing Washington’s cannabis industry. The state saw a spike in armed robberies of cannabis dispensaries earlier this year, a problem attributed to the large amounts of cash at such retailers.

A spokesman for the Liquor and Cannabis Board said in February that the agency recommended that dispensary owners “hire armed security guards, deposit cash frequently so that stores don’t have a lot of cash available, and post signs at businesses explaining that the Employees do not have access to too much cash, clearly communicate safety guidelines to employees so they know what to do in the event of a robbery.”