Crediting the CBD company’s forthrightness, a federal judge in New York federal judge has dismissed a lawsuit against Massachusetts-based Curaleaf from investors who argued the company misled them about legality of its CBD products.

The investors sued when Curaleaf’s share price fell in 2019 after the U.S. Food and Drug Administration sent the company a warning letter for claiming its CBD products could treat a variety of diseases.

The suit was among a raft of class-action lawsuits in the past three years challenging CBD makers for allegedly misleading investors and making unfounded medical claims. The Curaleaf case was filed shortly after the FDA sent Curaleaf a warning letter.

Judge Brian M. Cogan said in his ruling Tuesday that Curaleaf “publicly and repeatedly acknowledged” in its stock listing statement that the FDA had not yet approved its CBD products for any medical purpose. Cogan said the company also noted it could be subject to enforcement action for “promotion of an unapproved drug.”

“The company clearly disclosed the risk that the FDA could act against it and that the FDA had done so to other companies selling similar products,” Cogan said.

“Describing this risk in terms of potentiality rather than certainty – when certainty of enforcement could not be known anyway – does not violate securities law.”

Law360 first reported on the decision.

After the FDA’s letter to Curaleaf on July 22, 2019, the company discontinued many of the products regulators cited, and removed some of the claims it made about its products.

Investors contended that the company did not explicitly say its products were illegal, but the judge rebuffed their argument.

“There is no requirement that a company disclose its risk in any magic words preferred by plaintiffs,” the judge said in the ruling.

An attorney for the investors told Law360 they were evaluating their next steps.

The case was filed in U.S. District Court for the Eastern District of New York.

“We look forward to focusing on the company’s growth and continuing to serve our customers and patients nationwide,” Curaleaf said in a statement after Cogan’s ruling.

Curaleaf also sells high-THC marijuana products in states where they are legal. Cogan also noted Curaleaf’s forthrightness on its THC business activities.

Caraleaf told investors in a 2018 Canadian filing that it “will derive a substantial portion of its revenues from the cannabis industry in certain states of the United States, which industry is illegal under United States federal law.”

Pennsylvania is awarding $253,000 to organizations with projects designed to increase sales and exports of hemp products.

Pennsylvania’s Department of Agriculture is accepting applications for the grants until March 5, PennWatch reported. Projects aimed at promoting consumer awareness are also eligible.

“Hemp has presented a unique opportunity to build an industry from the ground up, supplying seemingly limitless environmentally sustainable construction materials, industrial fiber and food products just to name a few,” said Agriculture Secretary Russell Redding.

“These competitive grants can help cultivate the growth of the industry that once was a staple of Pennsylvania’s economy and could once again support new jobs and income for Pennsylvanians.”

The projects must have started on or after July 1, 2020, and have to be completed by June 30, 2021. The grants will cover up to half of a project’s cost.

The state’s Department of Community and Economic Development is processing the applications.

Prosecutors have dismissed charges against a Minnesota hemp farmer whose plants had elevated THC levels, saying that they had trouble locating witnesses because of delays in the case.

Fillmore County prosecutors filed felony possession charges against Luis Hummel  in March 2019 after seizing his plants. They tested at 3% THC, 10 times higher than the THC limit for legal hemp, which is 0.3%.

The Duluth News Tribune reported prosecutors filed the notice of dismissing in December, saying that “essential witnesses will be unavailable to testify at trial.”

The case was set for trial in April 2020, but the pandemic forced several postponements.

Hummel told authorities that THC in his hemp products goes up when concentrated, according to the criminal complaint. Hummel allegedly said that he tries to make his hemp products seem like marijuana to “entice the buyer,” then he removes most of the THC.

Industrial conglomerate 3M Co. thinks hemp can be part of the sustainability “megatrend” and is looking at hemp components to do everything from strengthening packaging tape to helping grow human tissue and organs.

But the company sees a lot of kinks to work out in the supply chain before hemp’s potential can be realized, says Don Davidson, 3M’s Global New Product Marketing Manager.

Speaking this week at the virtual National Hemp Symposium by Oregon State University, Davidson was bullish on hemp’s potential for industrial applications.

He said 3M has been tinkering with hemp for years outside the U.S., but that the 2018 Farm Bill turbocharged its research-and-development capabilities domestically. Davidson said 3M’s customers are clamoring for environmentally friendly offerings.

“We can incorporate (hemp) into a lot of 3M technologies and products,” he said.

“Pretty much all across the board, regardless of if it’s a consumer or they’re industrial,  health care, transportation or energy, they’re asking for more sustainable solutions.”

He said 3M is actively researching hemp fiber and oil components for use in:

• Adhesives for aerospace and transportation.
• Garbage bags.
• General plastic bags.
• Surgical gauze.
• Nonwoven material to be put down in agriculture to prevent soil erosion and inhibit weeds.
• Conventional box-sealing tape.
• A growing matrix for so-called “induced pluripotent stem cells,” or cells used in regenerative medicine for things like cultivating healthy liver or intestinal tissue.

“This base material has so many applications across the company,” he said.

“We’re looking at, ‘How can we use that hemp fiber for not just a handful of product applications, but an incredible amount of applications, and the positive impact that will have,’” Davidson said.

Davidson called sustainability a “megatrend” that will drive most new products in coming years, not just in high-tech manufacturing but even to replace traditional consumer packaging and packing tape used to ship products.

“The e-commerce trend isn’t going anywhere,” he said.

3M’s hemp development comes as the company responds to cooling demand for some of its older products because of the Covid-19  pandemic. Based in St. Paul, Minnesota, the company said in December it will cut 2,900 jobs in part because of slumping sales for office supplies such as its iconic Scotch tape and Post-It Notes.

Davidson was less clear about when 3M’s hemp plans would come to market. Asked what kinds of hemp fiber the company needs and how much of it, Davidson said he couldn’t guess.

“That’s tough for us to say at this point because we’re still learning,” Davidson said.

“We still want to learn what type of converting has to happen with the hemp fiber, whether it’s using the fiber for material as opposed to an adhesive.”

Davidson said once 3M’s research and development teams can figure out what is available in the hemp supply chain and how they can efficiently get ahold of a decent enough supply to start to work with it, “that’s where things really start to take off.”

“Once we get that base material and we can start to develop prototypes, then we can get that out to customers,” Davidson said. “And that’s when things pick up and really fill out that product pipeline involving hemp.”

He added that global supply of hemp components is still tiny and that hemp’s role in sustainable commerce is still unknown.

“It doesn’t matter what part of this planet I’m talking to people on, everybody’s kind of shaking their heads at these challenges.”

Kristen Nichols can be reached at [email protected].

A New Mexico district court has invalidated the state’s hemp production rules that allowed regulators to revoke or suspend licenses without notice and imposed strict testing requirements.

Santa Fe District Court Judge Bryan Biedscheid said the New Mexico Department of Health’s rules were invalid because the agency failed to consult with the Medical Cannabis Advisory Board as required by state law.

The ruling came in response legal action from New Mexico cannabis company Ultra Health, cannabis news site The Candid Chronicle first reported.

Duke Rodriguez, the company’s president, said the judge’s ruling shows “the department may not attempt to promulgate any rules it wishes without fully consulting stakeholders and providing substantial evidence for such changes.”

He said the state must issue rules that keeps prices low for medical cannabis patients.

Want to know the best time to plant hemp in the Midwest? Or what cultivar consistently produces a crop below 0.3% THC?

Researchers in the Midwest have successfully pooled that information despite the pandemic, creating a database designed to give farmers an idea of what to expect from their hemp cultivars in 2021 and beyond.

Last summer, researchers at the University of Illinois and the University of Wisconsin-Madison invited growers in their states to submit certain information about their crop for the database in exchange for a discount on cannabinoid sampling.

The result is the Midwestern Hemp Database, which also includes participants from Michigan State University, Purdue University and growers in their respective states.

“We wanted to work together to stop working in silos all the time and share information across the region, not just within our own state, and figure out what’s working and what’s not for our growers,” said Phillip Alberti, educator for commercial agriculture at the University of Illinois Extension.

“Also very importantly, what sources of genetics, what varieties out there might be more suited to their environment for performance issues or ultimately (THC) compliance, which of these varieties are going to produce a compliant crop.”

First-ever data sharing

The database includes information on:

• When a particular cultivar was planted.
• When it started flowering.
• When it was harvested.
• A cultivar’s CBD and THC profile.

Collectively, the data also provides growers an idea of how high CBD levels can get before the plants exceed 0.3% THC, for example, or what soil type is being used most (silt loam), and what planting method is most popular (transplants from seed).

Alberti said the database also helps get a picture of when is the best time to test plants for THC.

“Because that ultimately determines compliance,” he said. “What is kind of the peak window that growers can expect they’re going to be busier, that they really need to be paying attention to cannabinoid levels.”

Alberti said growers pay $30 for cannabinoid testing – about half the normal cost – per sample at Rock River Laboratory, Inc., in Watertown, Wisconsin.

“Cannabinoid profiling is very expensive,” he said. “It’s kind of the scariest thing growers have to deal with because in order to harvest their material, they have to show compliance.”

Success through the pandemic

Covid-19 restricted agriculture officials’ ability to collect data from the field last year, so having growers submit their own information was a good way to get data despite the pandemic, said Shelby Ellison, an associate professor of horticulture at the University of Wisconsin-Madison.

“It was great that we were able to get participation across the number of different states,” she said.

Paul Grethey Jr., owner of Simple Livin’ Farms in Groveland, Illinois, was among the growers who shared information for the database last year.

“What’s really cool about the hemp database is now you can actually compare what you grew against what other farmers grew, compare your soils, your nutrients…and you can see what’s going yield best in your type of soil,” he said.

The universities plan to continue collecting data again this year and hope to add participants from other states.

Ellison advises farmers not to focus on one factor when analyzing the database, but instead look for the bigger picture.

“Really look at the trends that you’re observing to inform you for both agronomic practices and cultivar decisions for the next year.”

Ivan Moreno can be reached at [email protected]

Clint Eastwood has filed a third lawsuit alleging CBD companies are falsely claiming he’s endorsing their products.

The legal action is the second the legendary actor has filed against Los Angeles-based Norok Innovation Inc. and its CEO Eric Popowicz but includes a different set of defendants, according to Law 360, which first reported the case.

“Like many of his most famous characters, Mr. Eastwood is not afraid to confront wrongdoing and hold accountable those that try to illegally profit off his name,” the lawsuit filed in California federal court says. It accuses Norok and other entities of hiding his name in metadata tags to draw online traffic to their CBD stores.

“With rare exception, Mr. Eastwood reserves the exploitation of his personality rights and the goodwill associated therewith for his motion pictures and other entertainment related projects, and for business ventures in which he is personally involved,” Eastwood’s attorneys say in the lawsuit.

Eastwood sued Norok and Popowicz in July but voluntarily dropped the lawsuit in November. That lawsuit made similar allegations.

In a separate lawsuit filed last summer, Eastwood accuses three other CBD companies of creating articles and emails that portrayed him as an endorser of their products. That lawsuit is still pending in California federal court.

The number of hemp processors in Illinois doubled over the last year as the new industry tries to establish itself in a state that’s already an agricultural powerhouse.

Row crops are nothing new to growers in Illinois – one of the top corn-producing states in the country – but the infrastructure required to process hemp is still a work in progress. But there are signs of a maturing industry: Last year the state registered 362 hemp processors, up from 146 in 2019.

More people want to cultivate the crop, too, with 798 licensed growers in 2020, compared to 601 in 2019. Even so, agriculture officials expect to see a decrease from the 7,141 acres planted in 2019, as growers get a better sense of how much they really need to plant to suit their capacity and needs.

“That’s a trend that we’re seeing across the country as well,” said Phillip Alberti, educator for commercial agriculture at the University of Illinois Extension. Alberti said “growers are starting to kind of figure out that for high cannabinoid hemp, it’s very easy to plant more than you’re willing to handle or able to handle.”

The number of hemp acres planted in 2020 are not yet available.

Paul Grethey Jr., owner of Simple Livin’ Farms in Groveland, Illinois, has grown horticulture crops including ornamentals and vegetables, but said cultivating hemp was “the most fun” he has ever had.

“I’ve got 12 acres of the richest farm ground on the planet, and my goal has always been, ‘OK, how do I make more money than corn and soybeans off this valuable ground?” he said.

Grethey said he plans to grow hemp again this year. But for now, he’s still considering what to do with last year’s yield.

“With the processors in Illinois being so limited, there’s not a whole lot of options to choose from,” he said. “I’ve really been waiting for the proper opportunity to maximize the value of my product.”

Most of the hemp grown in Illinois is for cannabinoid extraction, but Rachel Berry, the founder and CEO of the Illinois Hemp Growers’ Association, predicts a shift to grain and fiber “once the industry catches up and there’s an outlet for farmers to send” their crop.

She said she has spoken to farmers who are interested in fiber and grain, “but they’re very apprehensive until they can get a contract and there’s nobody doing grain and fiber contracts in Illinois right now.”

Growing hemp for cannabinoids is time-consuming and expensive – hiring a processor, making sure the plant is below the 0.3%THC limit – and it may not be so appealing to some farmers.

“We’re used to growing row crops here,” Berry said. “So I think that traditional farmers – corn and soy farmers – will be more interested in something that is a little more straightforward.”

Alberti said among the things growers are learning is that hemp season can be long, depending on where you are in the state. That means growers can delay planting until June if the spring is particularly wet.

“You have to be aware of where you are in the state, what type of climate you have and the variety that you’re growing because all three of those factors kind of play into each other,” he said.

Ivan Moreno can be reached at [email protected]

Dallas-based Generation Hemp Inc. has acquired a processing company in Kentucky with a 48,000-square-foot facility for $5.1 million.

The acquisition of Halcyon Thruput LLC  will be payable in $2.5 million of restricted common stock, $1.75 million in cash and a $870,000 promissory note, Generation Hemp said Tuesday. Generation Hemp will also take over $1 million in existing debt.

Halcyon Thrutput processes harvested hemp directly from the field and wet-baled hemp at the company’s facility in Hopkinsville, Kentucky.

“The drying services technology greatly increases efficiency and capacity during harvest for farmers who need to quickly move harvested hemp while preserving the cannabinoid potency,” according to Generation Hemp.

The facility can process about 4,000 wet pounds per hour.

Molson Coors Beverage Co. says it has launched CBD drinks in Colorado through TRUSS CBD USA, its joint venture with HEXO Corp.

The beverage line will be available in three flavors – Grapefruit Tarragon, Strawberry Hibiscus and Blueberry Lavender under the name, “Verywell,” Molson Coors and HEXO said Wednesday.

The companies first partnered in 2018 to launch beverages in Canada through another joint venture called Truss Beverages, which sells non-alcoholic cannabis-infused drinks.

“Our joint venture with Molson Coors Canada saw Truss Beverage Brands become the No. 1 choice for consumers in Canada, and we are expecting similarly great results in the U.S.,” said HEXO CEO and co-founder Sebastien St-Louis.

Production and distribution for the Colorado CBD beverages will be kept within state lines because Colorado is one of the few states with an established regulatory framework for hemp-derived CBD in food and beverages, the companies previously said.

The companies did not elaborate on where in Colorado the drinks would be sold. Pete Marino, president of the emerging growth division for Molson Coors, told Bloomberg that Colorado will be a testing ground for the new brand.

Molson Coors trades on the New York Stock Exchange as TAP. Hexo Corp. trades on the Toronto Stock Exchange as HEXO.