The lawsuit

Maine-based AJ Marketing LLC filed suit against Juul Labs on September 3, 2026, in the U.S. District Court for the District of Delaware (case No. 1:26-cv-01110). The complaint alleges that both the original JUUL and the newly authorized JUUL2 devices infringe U.S. Patent No. 8,851,068, titled “Personal Inhalation Devices.”

AJ Marketing is not a downstream licensing shell. It is the original assignee of the patent. The patent’s inventors, Scott A. Cohen and Michael J. Bedecs, assigned their rights to the company back in 2010, when the underlying application was filed. The patent issued on October 7, 2014.

According to the complaint, the technology traces back to an effort to deliver metered doses of caffeine to military pilots, pitched as a non impairing alternative to the amphetamines historically used to keep aircrews alert. But the patent’s claims are broader than caffeine delivery alone. It covers a personal inhalation device: an outer shell with an orifice, a reservoir holding a “medium,” and an atomizing unit that vaporizes the medium and doses it to the user on each puff. The patent explicitly lists nicotine, medications, vitamins and even THC (in permitting jurisdictions) as possible payloads alongside caffeine.

AJ Marketing alleges Juul’s heating and delivery system infringes those claims. The suit seeks a reasonable royalty covering the six years preceding the filing, plus an ongoing royalty through the patent’s expiration, estimated by Bloomberg Law at January 2031. Juul Labs has not yet responded in court.

The lawsuit lands exactly a week after the FDA authorized the JUUL2 device and two accompanying pods through the Premarket Tobacco Product Application (PMTA) pathway, clearing Juul’s second generation platform for legal U.S. marketing. AJ Marketing named JUUL2 explicitly in its infringement claims, meaning Juul’s newly cleared product enters the market already tangled in litigation.

Not Juul’s first patent fight

Juul has spent much of the past two years on both sides of the patent litigation table against rival Altria and its NJOY subsidiary.

In August 2025, Juul filed a complaint with the U.S. International Trade Commission seeking to block imports of Altria owned NJOY Ace devices, alongside a parallel infringement suit in Delaware federal court. Juul argued the NJOY Ace, the only pod based device with FDA marketing authorization at the time, infringed its patents, and pointed to a perfect record in three prior ITC cases against counterfeit and unauthorized compatible products.

Altria’s NJOY unit answered with its own ITC complaint and a companion Delaware lawsuit, accusing Juul’s flagship JUUL device and JUULpods of infringing two patents that NJOY had acquired from Fuma International as part of a separate patent settlement.

Juul separately sued NJOY and Altria in Arizona federal court, alleging NJOY Daily infringed a Juul nicotine salt patent. That case took an unusual turn: newly unsealed filings showed an ITC judge had found that vaping products sold by R.J. Reynolds back in 2013 already contained every element of Juul’s asserted nicotine salt claims, evidence Altria and NJOY are now using to argue the patent lacked novelty and should be invalidated.

The bigger picture

This pattern of litigation on multiple fronts, in multiple forums (ITC, Delaware, Arizona), often running in both directions at once, has defined Juul’s relationship with Altria/NJOY since Altria fully divested its Juul stake in 2023 and later acquired NJOY’s competing product line without licensing Juul’s patent portfolio.

The AJ Marketing case is a departure from that pattern in one respect. AJ Marketing is not a competing vaping company but appears to be a pure patent holder, asserting a decade old patent with no vaping product of its own on the market, a profile closer to what’s commonly termed a non practicing entity than to an operating rival like NJOY.

Whether Juul challenges the patent’s validity, given its 2010 priority date and broad “personal inhalation device” claim language that predates the pod vape category as it exists today.

Whether AJ Marketing seeks an injunction or settles for royalties; the complaint as reported asks only for damages, not a sales ban.

Whether this becomes a template for other legacy inhalation patent holders to test claims against the now much larger and more valuable pod vape market, especially as JUUL2 rolls out under fresh FDA authorization.

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Plaintiffs argue in the lawsuit that the result is “a single product is simultaneously legal ‘hemp’ and illegal ‘marijuana.’”

By Rebecca Rivas, Missouri Independent

A federal judge is being asked to decide whether Missouri’s new law banning intoxicating hemp products is clear enough to enforce in November or so contradictory that a constitutional challenge to it should move forward.

At the center of the dispute is the question of whether Missouri calls a product legal “hemp” in one part of state law and illegal “marijuana” in another.

The plaintiffs, led by the Missouri Hemp Trade Association, said in a filing this week that the state has created overlapping definitions, leaving businesses unsure what they can legally sell when the law goes into effect on November 12. They argue the case over House Bill 2641 deserves to be heard in court.

“Most judges would read [House Bill 2641] and go, ‘What is going on here?’” said Chuck Hatfield, attorney for the plaintiffs. “‘This seems like something we need to at least dig into and figure out.’ And that’s what our clients want is a day in court.”

The state says there’s no contradiction because the law specifically outlines which category controls: if it meets the definition of a hemp-derived cannabinoid product, it’s treated as marijuana. The state asked Judge M. Douglas Harpool of the U.S. District Court Western District of Missouri to dismiss the lawsuit earlier this month.

The state argues the case is part of a growing nationwide effort by the hemp industry to overturn similar state laws.

“The industry’s playbook is well established,” the motion to dismiss states, citing other federal cases where the challenges against other state legislation regulating intoxicating hemp have failed.

Plaintiffs hit back in their response this week, saying that Missouri’s law is different from the other states cited. These products will be considered marijuana in Missouri under the new law, they argue, and that’s where the legislation gets “unconstitutionally vague.”

The federal law distinguishing marijuana and hemp has brought intense debate both in the legislature and courts nationwide since Congress legalized hemp in 2018.

For Missouri, the lawsuit is the latest episode in a long saga to regulate intoxicating hemp products that, in previous years, has ended with lawmakers throwing their hands up in frustration.

When Congress legalized hemp in 2018, it opened a door for intoxicating products like hemp-derived THC beverages that are now found in grocery stores and bars throughout the state.

Congress closed that loophole in November by passing a federal ban that’s set to go into effect November 12. Missouri lawmakers said they intended to mirror that language by a law passed this spring.

However, plaintiffs argue in the lawsuit that the result is “a single product is simultaneously legal ‘hemp’ and illegal ‘marijuana.’”

The state argues in its motion to dismiss that it prevented this scenario because it “enacted provisions to guard against confusion.”

“In other words, to the extent that a hemp-derived cannabinoid meets the statute’s definition of ‘hemp’ and is not included in any of the statute’s exclusions from ‘hemp,’ then the product is not a ‘hemp-derived cannabinoid product’ for purposes of HB 2641’s central mandate,” according to the state’s motion. “It is that simple.”

The bill, sponsored by Republican state Rep. Dave Hinman of O’Fallon, will prohibit hemp products from containing more than 0.4 milligrams of THC per container, which is among the limits included in a provision in the federal spending bill Congress approved last year.

Even if Congress reverses course and decides to allow the sale of these products, Hinman’s bill would only permit them to be sold in Missouri’s licensed marijuana dispensaries. And if Congress chooses to delay the ban, Missouri would still ban all products, except for intoxicating beverages.

However, plaintiffs argue beverages are not specifically stated as being exempt.

The law lists types of products that would go into effect if there was a delay, which includes “any solid candy, gummy, chewable product, tablet, capsule, oil, baked good, or other solid edible.” It also includes products “that can be smokable or vapeable in the form of raw plant material, flower, or bud material and that contain any amount of tetrahydrocannabinolic acid.”

Beverages are thought to be allowed because they aren’t on the list of things that would go into effect. However, critics have said other products might be unintentionally exempt because they are not listed here, not just beverages, and the law just creates another loophole. Plaintiffs point to the carve-out clause as further reason the law is “difficult to parse.”

This list has become a bigger focus because Congress is currently considering delaying the federal ban.

Earlier this month, the U.S. Senate approved a measure to fund federal agencies until December 11, and it includes delaying the federal ban on intoxicating hemp THC products until that date.

It now goes back to the U.S. House for final approval before heading to the president’s desk.

This story was first published by Missouri Independent.

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The violations had nothing to do with cannabis. Neither did nearly half the drone flights Sonoma County made in 2024, according to an ACLU lawsuit alleging around 700 warrantless flights over private property since 2019. The county has stopped flying while it negotiates a settlement.

A Northern California county has paused a controversial drone surveillance program targeting small-time cannabis growers after an enforcement campaign that left dozens of people facing foreclosure, eviction and six-figure fines.

Sonoma County was sued on behalf of residents by the American Civil Liberties Union last year and accused of an unconstitutional “runaway spying operation” in which officials flew drones low over properties in search of unpermitted cannabis grows. But nearly half the 2024 drone flights had nothing to do with cannabis, according to the lawsuit.

“Like anything, I can sit and feel sorry for myself or I can take action,” says Keni Meyer, whose home was foreclosed after officials alleged minor building code violations unrelated to cannabis. She is now living in a trailer park. “I’ll never stop fighting the good fight,” she adds.

What the Lawsuit Alleges

• About 700 warrantless drone flights over private property since 2019.
• Roughly 5,600 aerial photographs collected, some taken from as low as 50 feet.
• Nearly half of the 2024 flights had nothing to do with cannabis.
• 863 cannabis cultivation sites shut down over the same period, according to internal county documents cited in the filing.

Figures as alleged in the ACLU’s complaint against Sonoma County. The county says it does not comment on pending litigation.

Over several years, however, a slew of cannabis farms were cited for alleged minor code violations that were often difficult or impossible to resolve before penalties rapidly escalated into six-figure fines, sending them out of business.

“The objective really was just to destroy cannabis cultivators in Sonoma County and they were successful,” claims former cannabis farmer Elias Stravenitis, who ran Nor Cal Pharms before it was forced to shut down. “They didn’t like the fact it was legalized. They hired narc detectives and people who were diametrically opposed to the legalization of cannabis.”

He spent $250,000 building a cannabis nursery that employed 20 people behind his home, but says the county ultimately refused to grant him a license on spurious grounds. He is still fighting a million-dollar fine that could see him lose his property. The plot where a modern cannabis farm once sat is now overgrown, after he was required to dismantle the operation.

Even completely licensed operators were swept up by the enforcement campaign. Cannabis farmer Jeremy Freitas says he became trapped between conflicting state and county regulations over cultivation methods, eventually accumulating about $83,000 in fines while trying to bring his farm into compliance. He says the financial pressure pushed him to the brink of bankruptcy and contributed to the breakdown of his marriage.

“I think it’s pay-to-play. I served my country for things like this not to happen.”

Jeremy Freitas, cannabis farmer and air force veteran

The 43-page complaint, filed in Sonoma County Superior Court on behalf of three longtime residents, alleged officials secretly carried out around 700 warrantless drone flights over private property since 2019, collecting roughly 5,600 aerial photographs. According to the ACLU, the drones sometimes flew as low as 50 feet and captured high-resolution images of backyards, hot tubs, children’s play areas and other areas where residents reasonably expected privacy.

Internal county documents cited in the lawsuit say authorities shut down 863 cannabis cultivation sites over the same period. Campaigners estimate legal cannabis acreage fell from around 50 acres after legalization to roughly 10 acres today, leaving a far more concentrated industry dominated by larger operators.

A Sonoma County spokesperson said it is not presently conducting warrantless drone flights to inspect properties for county code violations, while officials negotiate a potential settlement with the ACLU. “We do not generally comment on pending litigation, and we cannot legally discuss settlement negotiations,” they said.

Three senior Permit Sonoma officials, including the department’s director and the former narcotics detective who helped oversee the drone program, have since left their posts amid mounting legal scrutiny.

“The War on Drugs has long been a primary means for the government to push forward the surveillance state and abuses of power against citizens and businesses that can then be extended to all citizens,” says David Bienenstock, the author of How to Smoke Pot (Properly). “First they came for the weed growers…”

Although the county has halted the warrantless drone flights while settlement negotiations continue, the cultivators’ battle for justice, and the financial fallout for many of those caught up in the enforcement campaign, is far from over.

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“There are products that have not been subject to the same rigorous testing that the medical marijuana requires.”

By Stewart Yerton, Honolulu Civil Beat

It happens all the time now at Oʻahu Dispensary and Provisions in Waikīkī: A prospective customer like Blake Birdwell comes looking for a pre-rolled hemp cigarette or hemp-based edible, only to find the kiosk’s shelves are empty of such goods—by recent order of the Hawaiʻi Department of Health.

“It’s really shitty,” Birdwell said on a recent afternoon after making the rounds at other shops like Natural Mystic, Vape Hawaiʻi and Hawaiʻi’s Cheapest. “They’re all telling me, ‘No.’”

It’s a new reality for people like Birdwell who until recently were able to purchase a range of THC products without a medical marijuana card at dozens of shops across ​​the state—often at a lower price than the products for sale at Hawaiʻi’s officially licensed medical marijuana dispensaries.

The state has now cracked down on sellers of hemp-based products that had been operating under a loophole in federal law, and that’s set up a battle in which Oʻahu Dispensary and Provisions’ owner, Lance Alyas, has asked a federal judge to stop the crackdown.

The suit, which alleges the state has improperly recriminalized federally legal hemp, has gained national attention in legal news reports. The free-market libertarian magazine Reason, which generally opposes government-regulated monopolies, has also weighed in.

It’s the latest iteration of an ongoing struggle to regulate cannabis in Hawaiʻi, which has become widely available for adults to use recreationally in two dozen states.

It’s also a matter of life and death for Alyas’ business, he says, which operates four locations on Oʻahu.

“We have 20 people at risk of losing their jobs,” he said.

Booming Market For Low-THC Hemp Products

Hemp is the same plant species as cannabis sativa—or marijuana—which is a federally controlled substance, though hemp has been historically grown for non-intoxicating uses and contains lower levels of tetrahydrocannabinol or THC. Congress’s 2018 Farm Bill made hemp legal as long as the plants contained no more than 0.3 percent delta-9 THC, the ingredient that gets people high, by weight.

That led to a national flood of products—including gummy candies, vapes, drinks and pre-rolled cigarettes—containing THC derived from federally legal hemp.

In 2020, the Hawaiʻi Legislature passed a law making it legal to grow hemp, but not to produce or sell hemp-based THC products.

Such products proliferated legally on the continent, however, thanks to the 2018 farm bill. By 2024, the hemp-based cannabinoid market had grown to $3.5 billion and was expected to reach $4.4 billion by 2029, the Brightfield Group, a consumer goods research firm reported.

Others, such as Portland-based market researcher Beau Whitney, estimate the market now is actually closer to $30 billion to $44 billion, thanks in part to THC beverages.

Adult beverages containing THC derived from hemp have become so popular and ubiquitous that even Target has begun selling the drinks in hundreds of stores in four states.

Until recently, Hawaiʻi residents could order drinks online, shipped to their door, from brands with names like Willie’s Remedy+, produced by the singer Willie Nelson.

The challenge for Hawaiʻi regulators has been how to deal with such products, which are legal under federal law, coming into the state, where they weren’t supposed to be sold.

‘Premier Pakalolo Provider’ Lobbied For Change

Noa Botanicals is one of Hawaiʻi’s eight licensed medical marijuana dispensaries not subject to the crackdown. Although technically a maker and distributor of medication people can buy only with a doctor’s approval, Noa Botanicals’s marketing looks more like that of a lifestyle brand—not a medical product for patients seeking pain medication.

Its Instagram page, for instance, calls itself “Hawaii’s Premier Pakalolo Provider” and carries the slogan “Find your Hawaiʻi High.” A recent post shows greenhouse workers posing with big marijuana plants above the text “Bud Huntaz out here baggin’ da real trophies.” Other posts feature local music artists HIRIE and Sierra Lucia.

Starting in late 2024, Noa Botanicals’s chief executive, Karlyn Laulusa, began lobbying House Consumer Protection and Commerce Committee Chair Scot Matayoshi (D) and other lawmakers about unlicensed retailers selling hemp-based THC products.

The crux of the problem, as Laulusa described it in emails to lawmakers, was that the licensed, highly regulated dispensaries were losing business to unregulated retailers selling hemp-derived products that were illegal in Hawaiʻi.

The number of unlicensed retailers had boomed from 10 on Oʻahu in 2024 to 74 by early 2025, she wrote, and were taking over the market. Lualusa cited a market analysis from the Department of Health estimating that out of a total annual market of $198 million to $360 million, only $60 million was going to licensed dispensaries. The rest—$138 million to $300 million annually—was going to the unregulated market.

While all of this was happening, buyers were dropping out of the official medical marijuana program. In December 2021, there were 34,125 Hawaiʻi residents with a medical marijuana card, according to the Hawaiʻi Department of Health. DOH’s most recently available report, from the end of last year, shows 28,735 people had cards—a 16 percent decline.

Meanwhile, Laulusa told lawmakers that the Department of Health’s Office of Medical Cannabis Control and Regulation had authority over only the regulated dispensaries. The regulators couldn’t do anything about the unregulated ones.

The result of Laulusa’s lobbying efforts was Act 269 of 2025, which was supported by the Honolulu Police Department and the prosecutor’s office, as well as two other licensed dispensaries, Aloha Green Apothecary and Cure Oahu.

The law, combined with interim administrative rules, gave the health department the ability to require all sellers to register with the agency and open their stores to inspection by cannabis control agents who could tell the retailers what products they needed to remove from their shelves.

As Andrew Goff, chief of DOH’s Office of Medical Cannabis Control and Regulation, describes it, ACT 269 and administrative rules gives the office the ability to enforce existing law. The registration requirement enables the office to know what retailers are selling cannabis products, so the office can let the retailers know what products are allowed and what are not.

Alyas, who obtained the correspondence between Noa Botanicals’s Laulusa and Matayoshi through a public records request, questioned whether lawmakers should be working so closely with industry executives to shape a new law.

Laulusa did not respond to requests for comment.

Matayoshi said it’s part of his job to communicate with industries the state closely regulates and solve problems. Not talking to the regulated industry, he said, would be failing to do due diligence.

“If we’re going to be regulating doctors,” he said, for example, “I think we should be talking to doctors.”

In any case, DOH began enforcing the rules in July, which has led to the situation where people like Birdwell can’t get pre-rolled hemp reefers from places like Oʻahu Dispensary and Provisions.

As president of the Drug Policy Forum of Hawaiʻi, Nikos Leverenz generally supports legalization and regulation of adult-use cannabis. Although he testified against Act 269, Leverenz did say DOH’s enforcement rules can provide a useful framework for regulating sales of cannabis sold to adults—if policymakers legalized such sales outside of medical marijuana dispensaries.

“The DOH has the authority to do what it’s doing now, but I don’t think it’s in the best interest of consumers,” he said. “And it’s certainly not in the interest of businesses outside of the licensed cannabis dispensaries.”

Economic Protectionism Or Consumer Protection?

This echoes one of Alyas’s main complaints: that policymakers are favoring the licensed dispensaries over anyone else, engaging in economic protectionism of a medical cannabis dispensary industry that’s had the benefit of a government-imposed oligopoly for a decade.

When the Legislature established the medical dispensary program in 2015, it limited the number of licenses to eight, with each licensee permitted to operate two retail dispensaries. Over time the Legislature increased the number of dispensaries a licensee can run to four if the licensee can show the location is needed to serve a rural or underserved population.

Alyas questions why, if the market calls for more retail locations, policymakers haven’t simply granted more licenses, rather than letting the same eight businesses, which he calls “the Hateful Eight,” expand operations.

More pointedly, Alyas questions the Department of Health’s 2025 decision to let Noa Botanicals open a new retail location on Royal Hawaiian Avenue under the statutory provision allowing new locations in rural or underserved areas, when there already were two competing licensed shops in Waikīkī.

DOH said there was only one licensed dispensary at the time it approved Noa Botanicals’s request to open its Waikīkī location, and there are now a total of two in Waikīkī.

The medical marijuana control office makes its determinations based on the licensee’s ability to serve and supply patients and an “assessment of the number of registered patients residing in the relevant area in relation to the capacity of the surrounding dispensary locations,” DOH said.

Licensed dispensaries are subject to numerous regulations and are fundamentally different from hemp retail stores, the department said.

Matayoshi, the House Consumer Protection and Commerce Committee chair, says regulation is not simply about protecting the network of dispensaries and affiliated production facilities the state has set up to produce and sell medical marijuana.

It’s also about protecting consumers from untested, hemp-based THC products previously sold by unlicensed retailers.

“There are products that have not been subject to the same rigorous testing that the medical marijuana requires,” he said.

Matayoshi also took issue with the federal government’s carving out low-THC hemp from its schedule of controlled substances, which includes marijuana.

“They try to draw a difference,” he said. “There’s not any. If hemp didn’t have the same effect people wouldn’t buy it.”

Federal Loophole Set To Close

Meanwhile, Alyas’s lawsuit remains alive in Honolulu federal court.

Among other claims, Alyas argues that Hawaiʻi’s law violates the U.S. Constitution’s supremacy clause by criminalizing hemp that Congress legalized. It also challenges the state’s law under a constitutional doctrine known as the “dormant commerce clause,” which limits states’ ability to pass laws interfering with interstate commerce.

Hawaiʻi Attorney General Anne Lopez’s (D) office has countered that the supremacy and dormant commerce clause arguments don’t apply and has asked the court to deny Alyas’s request for a court order preventing the state from enforcing the law.

The issues concerning Hawaiʻi’s low-THC hemp law soon may be moot. In 2025, President Trump signed a bill that redefines hemp, effectively closing the loophole in the farm bill that allowed for the wave of hemp-based THC products to flood the market.

The new measure was supposed to take effect in November, but the Senate passed a bill pushing the deadline back until December.

Beau Whitney, the Portland-based hemp market researcher, has been following Congress’s movements closely. He said the new hemp definition threatens the whole industry and could have unintended consequences for industrial hemp.

While some in Congress, including U.S. Sen. Rand Paul, have been pushing back, Whitney isn’t counting on those efforts to do anything, although he said, “There might be a diving catch.”

This story was first published by Honolulu Civil Beat.

Photo courtesy of Brian Shamblen.

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“For more than seven years, Texans have built a multibillion-dollar hemp industry under laws that define these products as legal hemp.”

By Stephen Simpson, The Texas Tribune

Three members of the hemp industry are suing the state of Texas for violating commerce protections after it was announced last week that nearly all hemp-derived THC products are illegal.

On Friday, two hemp retailers and a distributor filed a lawsuit in the U.S. District Court for the Southern District of Texas against the Texas Department of State Health Services; Attorney General Ken Paxton (R); and the Galveston County criminal district attorney and sheriff, alleging that classifying hemp-derived substances as illegal violates the 2018 Farm Bill, which removed it from the federal Controlled Substances Act.

The complaint states that the reinstated definitions provide no delineation between lawful hemp and unlawful marijuana; that it’s preempted by the 2018 Farm Bill’s protections for the interstate hemp market; and that these classifications impose an unconstitutional burden on interstate commerce.

In addition to the complaint, the plaintiffs are also moving for a temporary restraining order and preliminary injunction to prevent the ban on these THC products.

“For more than seven years, Texans have built a multibillion-dollar hemp industry under laws that define these products as legal hemp. Without any change to those laws, the State now says they’re Schedule I drugs, like heroin,” said Andrea Steel, lead counsel for the hemp industry in this case, in a news release.

State officials banned at the end of last month several hemp-derived THC cannabis products, including those containing delta-8 and delta-10 THC variants, punishing people in possession of them with jail time and fines. However, delta-9 THC, the most commonly sold THC product in Texas, will remain legal.

Now that THC variants are classified as a schedule I drug, possession of illegal THC products will be treated as a state jail felony, which carries a punishment of 180 days to two years in prison and fines of up to $10,000, say cannabis experts.

“Our Constitution does not allow the government to jail a person under a framework no one can make sense of—our clients are asking the federal court to protect Texans from their own confused government,” Steel said.

Cannabis experts say if the ban is not removed, more than half of the THC products in stores might be removed from shelves.

“It’s a pretty big blow, and it’s recriminalizing a lot of cannabis products that have been completely legal and allowable in the state for many years, so we’re taking steps backwards toward prohibition,” Sarah Todd, media representative at Texas Cannabis Policy Center, previously told the Tribune.

The recent change stems from a Texas Supreme Court decision in May that allowed the Texas Department of State Health Services to reclassify all hemp-derived THC, except for low-dose delta-9 THC, as a Schedule 1 drug, prohibiting its possession and sale in the state. The ruling ended a 2021 injunction that paused DSHS from enforcing the new classification, which effectively allowed stores to stock different kinds of THC for the past five years.

The ban applies to all synthetically created THC forms, including delta-8, delta-10, THCP and THCA flower. The one exception will be delta-9 products with less than 0.3% THC by dry weight.

Delta-9, which naturally occurs in cannabis and is not typically synthetically derived, will remain the only THC option for Texas consumers because the federal 2018 Farm Bill legally defines hemp as cannabis containing no more than 0.3 percent delta-9 THC, and it does not list other cannabinoids.

This is the latest blow to the state’s hemp industry, whose year started with promises from lawmakers that hemp is here to stay but has been consumed with uncertainty over the last several months as flurries of court actions have ripped products off the shelves and then put them back on.

A statewide ban on the sale of smokeable hemp, such as flower buds and rolled joints, was supposed to go into effect on March 31, but a court ruling has paused it, so delta-9 smokeable hemp will also still be available to consumers.

Texas banned the sale of vape pens containing THC in the last legislative session.

Various lawmakers have promised to continue their crusade against hemp this upcoming legislative session, making arguments against THC that harkened back to the days of the “Just Say No” campaigns of the ’80s regarding the risks of THC usage and its effects. Members of the committee used the frying-pan-and-brain analogy as an example of how these products cause mental health problems among young people.

Sen. Charles Perry, R-Lubbock, has already confirmed he will once again file a bill to ban consumable hemp products at the next legislative session.

There are about 14,000 retail stores statewide that are licensed to sell consumable hemp, according to the Department of State Health Services.

This article first appeared on The Texas Tribune.

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“We just want a fair shot. We’re not asking for anything special, no special privileges, but what they promised from the very beginning.”

By Hannah Meisel, Capitol News Illinois

Nearly seven years after Illinois lawmakers approved recreational cannabis legalization, applicants who lost out on coveted business licenses are still battling the state in court, alleging the law’s rollout undermined its purported equity goals.

At the time of its passage in 2019, supporters of Illinois’s landmark law touted it as the most equity-centric legalized cannabis program in the nation. But one of the centerpieces of that legislation—setting aside the majority of cannabis business licenses for “social equity” applicants disproportionately affected by the War on Drugs—proved more complicated than the law’s authors had imagined, setting off years of litigation over the process.

The final lawsuit of dozens filed following the first cannabis licensing lottery in 2020 finally got its day in court last week, marking the conclusion of a yearslong legal saga testing the state’s legalization policy. But it’s also the last chance for the plaintiff, Well-Being Holistic Group, to have an opportunity for a dispensary license after all four of its applications lost in three lotteries.

“We just want a fair shot,” the Rev. Otis Davis, said after a hearing in the case. “We’re not asking for anything special, no special privileges, but what they promised from the very beginning… So we just saying, ‘Hey, that the system is broken, then they should redo it, and they should give everybody a chance.’”

Davis preaches at Repairers of the Breach Ministries in Chicago’s Back of the Yards neighborhood and unsuccessfully ran for Chicago City Council in 2019. He was part of the team that applied for dispensary licenses as Well-Being Holistic Group in 2020. Chris Harris, an attorney who’d represented Davis, teamed up with his client along with Harris’ friend and business partner David Roberts to submit the applications.

Harris was blunt in his assessment of Davis’s value to the team: “Otis being a veteran, Otis being a practicing minister on the South Side of Chicago coming from a disproportionately impacted area—we had what we thought was a perfect team, and a team that was designed to win this type of license.”

In fact, Well-Being Holistic Group’s applications received perfect scores, but still didn’t win a license. While most lawsuits filed against the state after the lottery process were from applicants who disputed their scores for a chance to be included in the lottery, Well-Being’s case argues a different legal theory, which attorney Chris Carmichael of Henderson Parks said is the “most difficult path” of all the lawsuits.

Plaintiff alleges lotteries were rigged

Well-Being argues that the Illinois Department of Financial and Professional Regulation, which operated the lotteries, improperly allowed roughly 450 ineligible entries into a lottery of 901 applicants for dispensary licenses in the Chicago region. That, Well-Being argues, nearly doubled the size of the pool and reduced others’ chances of winning.

Well-Being alleges the entries should have been flagged as ineligible because corporate dispensaries that already had a footprint in Illinois’s medical cannabis market had their fingerprints on applications for social equity dispensary licenses.

In one case, Carmichael said a company paid for roughly $500,000 in application fees—something IDFPR and the consultants hired to vet applicants and conduct the lotteries should have caught, as the “remitter” line on those cashier’s checks contained the name of the company.

IDFPR maintains it did its due diligence by checking out the individuals named as principal officers on the license applications, which the agency argues would have caught any attempts to flout application limits or hide true ownership of the entity behind an application.

But Well-Being argues vetting only individuals missed the forest for the trees, causing IDFPR to overlook dozens of applications having the same corporate sponsorship.

Alex Moe, a lawyer from the Illinois Attorney General’s office, told Cook County Judge Patrick Stanton that Well-Being was “missing that consultants were expected” to take part in the application process. There were no rules against those consultants paying for application fees either, he said, unless consultants had undisclosed financial interest in the entity applying for licenses.

Further, Moe said Well-Being’s theory of mathematical unfairness in the lotteries is fundamentally incorrect.

“Even if Well-Being is correct and half the applicants should not have been in there, it doesn’t change the outcome,” he said.

By following the “paper trail” created by the lottery, Moe said IDFPR recalculated what would have happened if the applications Well-Being allege should’ve been marked ineligible weren’t in the pool. Well-Being would have placed 126th out of 450, he said.

“That’s something we know with mathematical certainty—that Well-Being would not have received a winning drawing,” Moe said.

Corrective lottery?

But Carmichael pointed out that since the state has social equity cannabis dispensary licenses going unused, “the only possible meaningful thing to do is to run a corrective lottery.”

The state already ran corrective lotteries after initial litigation held up the license awarding process for a year. The first dispensaries owned by social equity license holders didn’t open until November 2022—nearly three years after the application process opened. As of January, only 64 percent of licensed social equity dispensaries were operational, according to an analysis by The Chicago Reporter.

Stanton, who pointed out multiple times during the hearing that IDFPR had wide latitude over interpreting state statute, said he understood Well-Being’s claims but seemed skeptical of its arguments that a court should step in and tell a state agency how to do its job.

“It sounds to me like…there was some vetting done before the lottery. Maybe not the level of vetting you think should’ve been done,” he told Carmichael. “You’re saying they didn’t do enough. And I feel like, ‘Okay, that’s sort of the decision of the department.’”

The judge said he would need more proof that IDFPR “didn’t follow statute” in order for judicial review to be warranted.

“They did something,” Stanton said of IDFPR. “Perhaps not enough. Applying the standards they did, it seems to me they caught what they should’ve caught.”

The judge is set to rule at a May 21 hearing.

This article first appeared on Capitol News Illinois and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License.

Capitol News Illinois is a nonprofit, nonpartisan news service that distributes state government coverage to hundreds of news outlets statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.

Photo elements courtesy of rawpixel and Philip Steffan.

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