CBD Lab Raid Shines Light on Cannabis’ Legal Grey Zones

Jason Keehn | Infocast

Cannabis prohibition – be patient, it’s not quite over yet!

On Wednesday June 15, 2016,  police shut down multiple sites in Sonoma CA associated with a prominent producer of cannabidiol extract, Care by Design. The raid, involving 100 officers, including the DEA, has been called a “hash oil lab bust,” invoking a charge originally designed for meth labs. More information about the raid here.

Care by Design (CBD) is a “patient’s collective” responsible for marketing the Absolute Xtracts (ABX) brand. ABX offers both vape oil cartridges and concentrates, with varying Cannabidiol to THC ratios to cater to different medical users. (Sonoma Lab Works is listed as their testing lab.) Care by Design’s founder, Dennis Hunter, is being held on $5 million bail.

The raid appears to have been motivated by concerns about potentially explosive solvents like butane or ethanol, which have been known to cause fires in the past.

According to the Santa Rosa Sheriff’s office, there were multiple licensing and permitting irregularities, as well as unattended canisters of butane outside one of the facilities.

“They’ve done nothing official that we could find that makes any of this a legitimate operation,” said Santa Rosa police Lt. Michael Lazzarini. “There’s nothing to indicate that anything here is in line with any regulations in the handling of chemicals or processes, code enforcement, city building permit.”

Care by Design’s spokesperson Nick Caston objected that they are one of the “pioneers of extraction best practices” in California, and were making a good faith effort to be in compliance with the evolving rules, set to go into effect in 2018.

“Care By Design has worked tirelessly over the past year to ensure that all of our facilities, employees, company policies and procedures are in compliance with city, county and state laws. We have planned for this type of situation and are fully confident in our ability to resolve this matter expeditiously with minimal disruption to the business. We hope to resolve this before it affects our thousands of patients throughout California.”

In a separate statement to Sonoma County Growers Alliance, of which CBD is a member, Caston added The decision to handle regulatory compliance questions with criminal enforcement actions and the arrest of CBD team members is incredibly disturbing. At the exact time State regulators are asking for cannabis providers across the State to license and register their cannabis businesses, for the government to use these types of enforcement actions against an organization that has made every effort to be transparent and forthcoming sends a terrible message to those attempting to do the right thing.”

Care by Design had filed a permit for essential oil extraction via supercritical CO2. However, Sonoma authorities stated marijuana was not mentioned on the application.

A story in local paper, Sonoma County Press Democrat, added a bit of perspective: “The enforcement comes just days after the company hosted local and State public officials and regulators to walk through their new state of the art facilities to discuss regulations for the emerging industry resulting from the newly passed Medical Marijuana Regulation and Safety Act (MMRSA) passed by the California legislature last fall”

“The multi-agency raid on these facilities comes at a time when cannabis growers and manufacturers are working to establish regulatory guidelines for an industry that has operated in a legal gray area for nearly 20 years. A major enforcement action against an industry leading model provider has sent shockwaves through a community that is already skeptical about the new regulatory process.”

The upshot? Marijuana extraction is legalin theoryunder newly minted California state regulations, but not under regulations outlined within Sonoma County.  And while extraction itself is legal under state law, there has yet to be anything concrete on the books regarding exactly how in detail it will be permitted and regulated. South Coast Growers Alliance is working to change that in their region.

This contradictory situation is mirrored in many other California cities and counties, including, perhaps surprisingly, Los Angeles one of the biggest economic hubs for cannabis. Currently, the Los Angeles Citizens Cannabis Task Force is petitioning the city to write new rules allowing cultivation, extraction and manufacturing operations within city/county limits. At the moment, only dispensaries have “legal immunity.”

Infocast’s Cannabis Compliance Summit will cover this regulatory grey zone and its evolution. Learn more here