In the vibrant city of Austin, Texas, where the boundaries of legal interpretations and personal freedoms often blur, Adam Reposa stands out as a figure of defiant clarity. Known for his unyielding and audacious presence in the courtroom, Reposa has navigated the legal system’s intricacies for two decades, becoming a symbol of resistance against perceived judicial injustices. His latest endeavor, however, ventures into the contentious arena of cannabis sales, drawing significant attention and law enforcement scrutiny to his operation, ATX Budtenders.
ATX Budtenders, boldly advertised through a website featuring a cannabis menu and contact information, operated out of a distinctive East Austin property marked by a pink ice cream truck. This setup, as provocative as it is transparent, prompted a dramatic law enforcement raid on the morning of January 22. The operation resulted in the seizure of cannabis, THC edibles, psilocybin mushrooms, firearms, and other items, though no arrests were made at the scene. Reposa, undeterred, claims the substances were CBD, a legal derivative of cannabis, challenging authorities to prove otherwise.
The raid, reportedly led by a coalition of the DEA, APD, and TCSO SWAT teams, has sparked debate over jurisdiction and the actual leadership of the operation. Reposa contests the notion of a DEA-led raid, pointing out the involvement of local sheriff’s officers, which, according to him, complicates the federal agency’s direct authority in the matter.
The backdrop to this latest episode is Reposa’s long-standing reputation as a provocateur, not just in legal circles but also in public discourse. His infamous viral marketing and confrontational stance towards the prosecutorial system have made him a divisive figure. Yet, Reposa’s current predicament with ATX Budtenders reveals more than just a legal battle; it underscores his broader critique of cannabis laws and the enforcement strategies that accompany them.
Reposa argues that the raid on his dispensary and the seizure of his products without subsequent charges exemplifies a deliberate attempt to disrupt the local cannabis market. By preventing entrepreneurs from establishing stable market positions ahead of potential legalization and licensing changes, authorities, he suggests, aim to maintain control over the industry’s evolution.
However, Reposa’s defiance goes beyond mere market concerns. He is openly challenging the rationality and justice of cannabis prohibition, questioning the government’s right to criminalize a substance increasingly recognized for its harmlessness. Through his legal strategies and public statements, Reposa seeks to provoke a broader discussion about liberty, rights, and the role of government in regulating personal choices.
While the future of Reposa’s legal confrontation remains uncertain, with Travis County District Court recusing itself from the case, the implications of his actions ripple through the community. Whether seen as a crusader for personal freedoms or a reckless agitator, Reposa’s saga with ATX Budtenders illustrates the ongoing tensions surrounding cannabis law and the quest for a more just and sensible approach to its regulation.
There is no secret about it: Sales of hemp-derived products have exploded all across the Lone Star State. Just about every CBD store, smoke shop, and even gas stations are displaying a multitude of various hemp cannabinoid products with contents ranging from broad spectrum CBD isolate to very potent THC and THC derivatives. In fact, a recent report by Whitney Economics suggests Texas businesses engaged in the hemp retail sector are bringing in 8 million dollars in revenue and hiring 50,000 people (1). That is a substantial number in a state where “marijuana” is still illegal.
However, not everyone is winning in this emerging market. Reports began dropping on June 7th of this year, a shop selling hemp-derived products in Garland was raided by local law enforcement and the Drug Enforcement Administration (2). Bee Hippy Hemp was accused of selling illegal THC products and law enforcement seized the store’s products and other assets. The owner has since maintained their business did nothing wrong, all the products were federally and state compliant, and they had proof of valid Certificates of Authenticity (COA).
Soon after, a shop in another North Texas town called Happy Hippies faced a near similar situation. On August 29th Little Elm PD obtained a warrant to find illegal THC products. They ended up seizing thousands of dollars of products for testing, but made no arrests. Then came Venom Vapors in Killeen on October 20th. This time, the owners were told by police their COAs, which allegedly were valid, had levels of THC too high to be legal. Killeen PD believed the THC levels established probable cause for a warrant to be issued to seize the product, no matter what hemp laws say. This happening in a city that has decriminalized misdemeanor amounts of marijuana through a local referendum.
While all of these cases are currently under active investigation or pending prosecution, one common theme among them is the lack of understanding of Texas hemp law by local, state, and federal police, and how they are translating it against long-standing marijuana enforcement. Hemp law was established in 2019 at the Texas Legislature, which virtually legalized everything about the cannabis plant except levels of delta-9 THC over .3% concentration by dry weight. And while Texas hemp is regulated by the Department of Agriculture and Department of State Health Services, little to nothing has been invested by the state to educate local law enforcement agencies about changes in hemp law. This all sits in juxtaposition to a medical cannabis program (Texas Compassionate Use Program) regulated by the Department of Public Safety.
Clear evidence of limited knowledge of Texas hemp law by local police was fully on display during the last Denton City Council meeting addressing marijuana decriminalization measure Proposition B on June 6th. Denton Police officers and representatives from the Denton Police Officer’s Association testified against the ordinance, and time and again, could not differentiate between hemp and marijuana from a policy, industry, or cultural standpoint. The measure was subsequently not adopted by Council.
Without a statewide paradigm shift in education and training, Texas remains a Wild West arena, where a variety of hemp-derived cannabis products are legal and widely available, but could land retailers or consumers in jail. And until one of these situations turns into a high profile court case that awards damages, the confusion as to how to enforce hemp and marijuana laws in Texas will continue to linger in limbo.
Daryoush Austin Zamhariri is the Executive Director of the Texas Cannabis Collective, a 501c4 nonprofit dedicated to news/media, advocacy, and premier events focused on Texas cannabis policy, industry, and culture.
Under the 2014 Farm Bill, hemp was still considered marijuana under the Controlled Substances Act (CSA), and hemp was only allowed to be grown in limited circumstances in states with an industrial or pilot program—but the hemp was not supposed to leave those states’ borders—because it was still marijuana. Hemp CBD did cross state lines though, flying across state borders on Amazon and everywhere else.
The exponentially growing hemp CBD industry grabbed the attention of Sen. Mitch McConnell, who propelled the passage of the Hemp Farming Act inside of the 2018 Farm Bill. Among other things, the 2018 Farm Bill made hemp a federally legal agricultural commodity, allowed its interstate commerce, and directed the United States Department of Agriculture (USDA) to oversee how each of the states regulate hemp within their borders in conformity with the 2018 Farm Bill.
The 2018 Farm Bill excepted hemp from the definition of marijuana and created a definition of hemp that is cannabis less than .3% delta-9 THC on a dry weight basis, including all of its derivatives, extracts, and isomers and so on. Thus, the DEA reiterated in the IFR what has always been true, that cannabis exceeding 0.3% delta-9 THC is marijuana, a schedule I controlled substance. Therefore, cannabis derivatives or extracts, regardless of source, are also marijuana if they are over 0.3% THC. Although the IFR was not stating anything new about the CSA or the definition of marijuana, the IFR immediately set off concerns for the chilling consequences it could have on the hemp and CBD industry.
As many processors and extractors in the industry know, hemp extract that is not in its final form almost invariably exceeds 0.3% delta-9 THC concentration at some point during the extraction process before that percentage is brought back into legal compliance for the final product. The reminder of where this activity falls for CSA purposes has alarmed those whose businesses center on extraction and processing—no one wants to be prosecuted for the manufacture or distribution of a Schedule I substance.
The DEA explains its reasoning as follows: The definition of hemp does not automatically exempt any product derived from a hemp plant, regardless of the D9-THC content of the derivative. In order to meet the definition of ‘hemp,’ and thus qualify for the exemption from schedule I, the derivative must not exceed the 0.3% D9-THC limit. The definition of ‘marihuana’ continues to state that ‘all parts of the plant Cannabis sativa L.,’ and ‘every compound, manufacture, salt, derivative, mixture, or preparation of such plant,’ are schedule I controlled substances unless they meet the definition of ‘hemp’ (by falling below the 0.3% D9-THC limit on a dry weight basis) or are from exempt parts of the plant (such as mature stalks or nongerminating seeds). See 21 U.S.C. 802(16) (emphasis added). As a result, a cannabis derivative, extract, or product that exceeds the 0.3% D9-THC limit is a schedule I controlled substance, even if the plant from which it was derived contained 0.3% or less D9-THC on a dry weight basis.
In relevant part, the Farm Bill’s definition of legal hemp extract includes “the plant Cannabis sativa L. and any part of that plant, including … extracts …, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3% on a dry weight basis.” Based on a clear reading of the Farm Bill, however, it is doubtful Congress intended to make illegal any CBD products derived from legal hemp and containing less than 0.3% delta-9 THC concentration in final form.
Congress may not have been aware of the temporary increase in delta-9 THC during processing—after all, the focus was to simply get hemp separated from marijuana and made federally legal first. Since the IFR groups all extracts over .3% delta-9 THC as marijuana, regardless of source, it could be argued the DEA’s interpretation of the interplay between the definition of hemp extract in the 2018 Farm Bill and marijuana extract in the CSA appears inconsistent with the express intent of Congress to exempt hemp and hemp-derived products – including extracts – that contain less than 0.3% delta-9 THC concentration on a dry weight basis, from the CSA.
However, the 2018 Hemp Farming Act made no express protections for hemp extract in process until it reaches final form for human consumption, putting processors in a bind to decide whether to risk it and carry on, or, to close up shop and forget the whole thing. To assuage this doubt, two lawsuits were recently filed against the DEA, contending that the DEA overstepped its authority in the IFR in several respects. The hemp industry took the IFR as a direct warning from the DEA that attacks were on the way to put hemp processors out of business, despite the fact that the hemp industry is governed by the USDA, which delegates the regulation of the programs to the states, and despite the lack of any prior DEA enforcement on hemp, even during the 2014 Farm Bill time period while all of hemp was still marijuana under the CSA, some in the hemp industry thought they should make some noise about the IFR.
The lawsuits allege the DEA is unlawfully attempting to criminalize hemp production and to regulate hemp products, and the second lawsuit seeks an injunction preventing the DEA from enforcing its laws against hemp producers. The Hemp Industries Association, a leading trade organization with a history of suing the DEA, and a South Carolina-based hemp company, RE Botanicals, filed a petition for review of the DEA’s August 21 Rule in the U.S. Court of Appeals for the D.C. Circuit, asking the Court to intervene and block implementation of the IFR. The same plaintiffs filed a stronger lawsuit weeks later, a declaratory action to clarify the scope of the 2018 Farm Bill in the U.S. Court of Appeals for the D.C. Circuit.
The complaint for declaratory and injunctive relief alleges the DEA is unlawfully attempting to regulate certain products derived from lawful hemp by misinterpreting 2018 Farm Bill by classifying hemp in progress and waste hemp material, two necessary and inevitable byproducts of hemp processing (the elements that rise above .3% THC), as Schedule I controlled substances. The hemp industry plaintiffs argue that Congress deliberately removed all commercial hemp activity from the DEA’s jurisdiction when it legalized hemp production, including hemp processing, via the 2018 Farm Bill.
The second lawsuit alleges the DEA’s interpretation of the 2018 Farm Bill “has serious, immediate, and irreparable consequences.” Further, “[A]ll hemp processors and manufacturers who work with and/or store hemp in process and/or waste must now choose between ceasing to process, manufacture and/or store hemp; obtaining a Schedule I license from DEA; or risking criminal prosecution under the [Controlled Substances Act]. Given the centrality of hemp processing to the hemp industry’s supply chain, forcing processors to choose between the foregoing options would effectively destroy the entire hemp industry.” The hemp industry plaintiffs asked the court for a judicial determination that (1) the definitions of hemp and THC in hemp in the 2018 Farm Bill includes hemp in progress and waste, and that such materials are therefore not controlled substances; and (2) the DEA lacks any independent authority to regulate any aspect of hemp production, including hemp in progress and waste.
The hemp industry plaintiffs are also seeking an injunction (1) preventing the DEA from enforcing the CSA as to hemp in progress and waste, and from classifying such materials as Schedule I substances, and (2) preventing the DEA from promulgating any rules relating to the production of hemp.It is unclear why the DEA would be involved in promulgating any rules relating to the production of hemp—that is the USDA’s purview. The DEA is not involved in policing the hemp agricultural commodity program, and the few ways in which it is implicated in the USDA’s interim rule is being walked back. Hemp is an incredibly low priority for the DEA, considering the mass influx of deadly drugs, violence, and cartel activity the DEA is charged with pursuing—and as to marijuana—the DEA only pursues large scale illegal trafficking and cartel activity. The DEA was recently quoted as saying COVID caused an interruption in the illicit drug supply chain such that pent up demand is engulfing the floodwaters that have since been re-opened, and people are dying at alarming rates. The DEA is focused on these activities.
The hemp programs are policed locally by the states. The idea that the DEA is going to come busting down the door of an unsuspecting compliant hemp processor, who must register and report to one or more agencies in his state, over a few hundredths of a percentage of THC, is nothing short of ridiculous. However, it is understandable that businesses want to eliminate all risks possible, and the temporary veering into Schedule I territory can cause problems for insurance companies, banks, and conservative investors. But, until Congress changes the definitions of hemp and marijuana to create a special allowance for hemp extract in progress, cannabis extracts over .3% THC simply are marijuana under the CSA, both before and after the publication of the IFR.Another issue from the IFR is the mention of synthetic cannabinoids being Schedule I substances, which they are. Think spice, K2, those types of lab-manufactured drugs intended to mimic marijuana—these definitions of “synthetics” have been defined by case law and are listed on the CSA. But, the hemp sector is concerned that the use of the word “synthetics” could portend an outlaw of “delta-8 THC,” another hemp derived cannabinoid present in trace amounts in the cannabis plant, but that typically requires synthetic processes to convert it to a consumable form. If the hemp industry’s concerns here were founded, then all CBD products would be synthetic because they all need a synthetic process for human consumption.
Again, like with hemp extract in process, it is highly unlikely that Congress imagined delta-8 THC when getting the Hemp Farming Act passed, so, it is unlikely the IFR is any kind of signal that suddenly the DEA is onto this and going to chase down hemp peddlers, again, over a very minute variation in THC type/amount. Synthetic cannabinoids are already on the CSA as controlled substances, so again, the IFR was stating nothing new. And because delta-8 THC is not a synthetic cannabinoid as that term is used, it has not been suddenly made illegal by the IFR. Note, however, that marijuana-derived delta-8 THC is on the CSA, and, some states have individually outlawed hemp delta-8 THC. No other activity has occurred since these lawsuits were initially filed. While I believe the lawsuits were premature, filed before the conclusion of a comment period opened by the DEA on the matter, we will see if the lawsuits have any effect of causing the DEA to issue any clarifications on these issues. The best-case scenario would be for later iterations of the Hemp Farming Act to address and improve these concerns for the hemp program overall for all participants.
There is little doubt many submitted comments about hemp in progress to the USDA in its extensive public commenting process which could lead to some protections with conditions there. The real news will be what the USDA unveils after its consideration of all the comments.
