The DEA recently subpoenaed nearly all of the hemp shops in the city of Allen, requesting that they turn over a plethora of records. From financial documents, including customer transactions, to lists of suppliers, the DEA wanted it all. However, late last month, a federal judge gave thee businesses in question a small win when he said the agency can’t have everything it’s asking for and stopped the subpoena.
Working the legal case is Texas cannabis attorney David Sergi, one of the lawyers who was able to halt the statewide ban on hemp-derived THCs. He said the shops are more than willing to share all records required by state and federal law, but the DEA’s subpoena goes beyond its duties and authorities and is a violation of the Fourth and Fifth Amendments to the U.S. Constitution.
The Fourth Amendment requires that the subpoena be limited in scope, relevant in purpose, and not unreasonably burdensome. The attorney said that the DEA subpoena also implicates the Fifth Amendment and is far outside of anything that could be considered reasonable.“I mean, this is stuff worthy of the KGB and the Russian Mafia.” – David Sergi, attorney
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Sergi represents the Allen Hemp Coalition, which includes shops like Lit Smoke & Vape, Chasing Vapes and Hazel Sky.
“These Allen-based businesses operate legally and each day follow all laws and regulations,” Sergi said in a written statement. He added that the shops are grateful that Federal Judge Amos Mazzant halted the subpoena. "They are committed to the community and will continue to operate their business to the highest legal and moral standards," he wrote.
Hemp was legalized federally in 2018. In 2019, Texas also legalized hemp. The state and federal hemp laws define the substance as cannabis with 0.3% or less of delta-9 THC. Delta-9 THC is the chief psychoactive component in weed that gets users high. Once hemp was legalized, manufacturers started creating products with different forms of THC such as delta-8, which is generally regarded as less potent than delta-9.
These products are sold at the Allen shops and, yes, they can feel every bit as powerful as marijuana can. But Sergi said each business maintains certificates of analysis (lab reports) for all their products to show that they meet legal requirements.
During a phone call with the Observer, Sergi said he’s not sure what’s going on between the DEA and Allen hemp shops. “The DEA was very ham-fisted, and instead of having any individualized suspicion, just tried to vacuum all the financial information,” Sergi said. “I mean, this is stuff worthy of the KGB and the Russian Mafia.”
He added, “We were willing to provide the things that we’re required to but we were not going to allow them to get into our financial records without a compelling reason.”
Now, the DEA will have to go back to the federal judge to explain the subpoena and why it needs the information it is seeking. But a week after the judge granted the attorney's motion to quash the subpoena, he still hasn’t heard anything from the DEA.
“If there’s a legitimate reason within the law," Sergi explained "We’ll provide it for them.”
