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*September 28, 2022*




*To: Cannabis Licensees and Stakeholders*

*Fr: Board Chair David Postman*

*Re: Settlement with Unicorn Brands LLC *

 

I am writing to follow up on an issue brought to the board’s attention by some of you and that many licensees expressed concerns about at Board meetings since last year.  When there is an open investigation and adjudication process in motion, the agency, and particularly the board, is not able to fully communicate. Now that there is a resolution, the below is being shared with you and interested media.

 

By this message, the agency is reminding cannabis business of the prohibition on the sort of laboratory conversions involved in a case about synthetically derived THC from hemp.

 

The board this week approved a comprehensive settlement of an enforcement case with Raymond-based processor Unicorn Brands LLC (Unicorn). The agreement ensures the company will not resume converting hemp into THC and brings an end to a lengthy and complex investigation.

 

This was an important case about the integrity of the legal cannabis system voters approved ten years ago and which today flourishes in Washington with a carefully controlled system of production, processing and selling of cannabis to adults.

 

Unicorn cooperated with the investigation and ceased using the conversion process after the LCB issued a July 2021 policy statement that made clear that synthetically-derived THC from hemp was prohibited under current rules and law.

 

I want to thank the many LCB personnel who worked on this case over the past year, including officers from the Education and Enforcement Division, the Examiner’s Unit and our chief chemist.

 

The next important step in protecting the public health is to eliminate the burgeoning market for Delta 8 products and other forms of synthetically derived THC products outside the regulated market. These gummies and other edibles are being illegally sold in convenience stores and online in Washington and across the country. We hope the 2023 legislative session will see action to assist in eliminating these illegal sales.

* *

*Settled AVNs*

On October 12, 2021, Enforcement issued an AVN alleging four violations in connection with Unicorn’s synthesis process: 1) Misuse of License, 2) Criminal Conduct, 3) Noncompliant Extraction, and 4) Traceability Failure. Additionally, because Unicorn had manufactured a controlled substance, outside the safe harbor provided by RCW 69.50.401(3), Enforcement seized the contraband synthetic cannabis products on October 13, 2021.

 

After extensive negotiations, the agency and Unicorn reached an agreement to settle these cases. As part of this settlement, the Enforcement and Education Division has agreed to fully withdraw the alleged criminal conduct charge. In exchange, Unicorn stipulates and fully admits to the remaining three violations: Misuse of License, Noncompliant Extraction, and Traceability Failure. Further, Unicorn has agreed to pay the standard monetary penalties for the three stipulated violations, accept forfeiture of the seized products, and waive further administrative review. Finally, Unicorn has agreed to the condition that “it shall not use its license to produce or manufacture Delta‑8 THC, Delta-9 THC, or any similar synthetically-produced THC from any hemp-based sources in the State of Washington unless _explicitly_ authorized by a subsequent change in state law that allows the licensee to do so.

 

As always, the Board thanks licensees and stakeholders for communicating concerns and for patience in allowing the investigation and process proceed as intended according to the law.

 

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