Pubdate: Thu, 23 Jun 2016
Source: SF Weekly (CA)
Column: Chem Tales
Copyright: 2016 Village Voice Media
Author: Chris Roberts


Last Wednesday in Sonoma County, officials responded to a report of 
workplace safety violations with armed law enforcement officers in 
Kevlar and camouflage.

Until that day, a major cannabis company called CBD Guild had been 
producing cannabis oil cartridges, cannabis gel-caps, sprays, and 
other marijuana products sold without issue all over the state under 
the popular brand names AbsoluteXtracts and Care By Design. Just a 
few weeks before, the company was comfortable enough to welcome in 
officials from local and state government to take a peek at the 
operation, which was considered a "model" for other companies in the 
state's burgeoning commercial cannabis industry to follow.

Instead, Santa Rosa Police Department officers and Drug Enforcement 
Administration agents converged on the office park, and on other 
properties associated with the company, looking for life-threatening 
safety hazards. Based on a tip they'd received five days earlier from 
a former employee, they were looking for a hash-oil lab that used 
butane to extract cannabis' active ingredients from the raw flower - 
an act that is still a felony offense under state law outlawing the 
manufacture of drugs using chemicals.

Police seized cash, computers, and manufacturing equipment. CBD Guild 
founder and principal Dennis Hunter was arrested and held on $4 
million bail, as the Santa Rosa Press Democrat first reported.

The problem is that there was no hash oil and no butane at CBD Guild. 
The company uses an extraction method that relies on pressurized and 
heated CO2 - a major distinction, since butane extraction is illegal 
under state drug laws that remain unchanged as legalization draws 
nearer. Police would have known that had they been on the tour, or 
had they received accurate information from their source - or had 
they simply visited CBD Guild with a knock on the door rather than a 
military-style raid.

(As for the individual who called the police in the first place? He 
appears to be a disgruntled former employee who made good on a threat 
to report the company to authorities on his way out.)

But this is still how things are done in California. Even after Gov. 
Jerry Brown signed into law rules specifically allowing for-profit 
commercial cannabis activity, and even after commercial cannabis 
operations like CBD Guild welcomed government officials in for a 
visit, old-school raids are still a reality.

This was not the first time police visited a well-known California 
cannabis industry company in 2016, either. In January, helmeted 
officers armed with assault weapons burst into the San Diego offices 
of Med-West, which supplies CO2-extracted cannabis oil to brands like Bhang.

There, as in Sonoma, police had a search warrant signed by a judge 
authorizing a search for a "hash oil lab." And again, as in Sonoma, 
there was no butane in use. (Worse, according to Med-West founder 
James Slatic, there wasn't even any CO2 extraction at the location 
police raided.) But law enforcement still froze Med-West's bank 
accounts, and the company remains out of business.

While police have publicly said they believe CBD Guild to be a 
massive and illegal operation that produces "millions" of dollars of 
cash monthly, they appear to be tacitly admitting they were off-base. 
A day after he was held on that bail that would shame a murderer, 
Hunter was sprung on no bail and with no charges filed. The company 
says it's back in operation, though police still have possession of 
expensive equipment, including a $1 million machine that tests for 
pesticides, according to attorney Joe Rogoway.

There are CO2 manufacturing facilities and butane-powered extraction 
labs all over the state. Not very many are as big as CBD Guild, but 
they aren't getting raided in this way.

If CBD Guild did anything wrong, it might have been doing too much 
too soon - and in the wrong place. Under the new state rules, a 
cannabis company can do business as long as there are local rules in 
place allowing the business, be it a massive grow or an extraction lab.

Santa Rosa was in the process of creating those local rules - they 
could be in place as soon as later this summer - when CBD Guild 
received its visit from the cops. Whether or not CBD Guild would have 
been wholly compliant with those rules when they went into place, no 
one could say. (That the raid happened a week before the annual 
conference of the National Cannabis Industry Association, of which 
Med-West's Slatic was a founding member, appears to be pure coincidence.)

So why did this happen, and why did law enforcement investigate what 
sounds like a code enforcement issue with a raid? The fairest and 
most accurate answer: Because they still can.

It doesn't appear the raid will have much of a chilling effect. There 
will still be fierce competition to provide oil cartridges and other 
cannabis newbie-friendly products. But under the current status quo, 
they just can't be assured they'll not have a disruptive visit from 
the law, still eager for any excuse to drop in the same way it always has.
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MAP posted-by: Jay Bergstrom