Licensed marijuana operators sue hemp retailers for alleged illegal THC sales and unfair competition
A coalition of Missouri marijuana companies has filed suit in Jackson County Circuit Court against a group of retailers and online sellers they accuse of trafficking high-THCa marijuana products disguised as hemp.
The plaintiffs, including Missouri marijuana brands – Agri-Genesis, C4, The Forest, Heya, Teal, Proper, and Vertical, operate state-licensed cultivation, manufacturing, and dispensary facilities under the oversight of Missouri’s Division of Cannabis Regulation (DCR).
In the petition for damages and injunctive relief, the group alleges that defendants including American Shaman Ecommerce LLC, American Shaman Franchise Systems LLC, American Shaman Online LLC, and others “are actively, knowingly and purposefully engaged in the large-scale trafficking of high THC marijuana and marijuana products disguised as industrial hemp” without state licenses or oversight.
The filing describes what it calls “the THCa Two-Step,” arguing that products labeled as THCa hemp flower are chemically identical to marijuana once heated.
“THCa flower can provide the same effects as typical THC and marijuana, but only after it has been heated and decarboxylated,” the petition states, citing American Shaman’s own website as evidence.
The plaintiffs claim these unlicensed businesses use the 2018 federal Farm Bill as a loophole, marketing cannabis with THCa concentrations exceeding legal limits. The petition counters that the Farm Bill defines hemp by its delta-9 THC content measured after decarboxylation, meaning products that exceed 0.3 percent THC once heated are still classified as marijuana.
“Using this conversion rate, the 36 percent THCa flower advertised by American Shaman contains over 31 percent delta-9 THC after decarboxylation, over ten times the legal limit on delta-9 THC for hemp,” the filing states.
The suit cites a May 2024 DEA letter and a May 2025 cease-and-desist order from the Missouri Attorney General’s Office, both affirming that high-THCa flower constitutes a Schedule I controlled substance when tested after heating.
Beyond alleged criminal violations, the plaintiffs contend that unlicensed retailers gain an “unfair competitive advantage” by avoiding the costs and restrictions imposed on licensed cannabis operators. The filing details the regulatory expenses Missouri licensees must bear, including “annual fees exceeding $28,000 for cultivators,” product testing at $400 per lot, state excise taxes, METRC tracking, and costly security systems.
By contrast, the petition says defendants “take credit cards, do not pay any excise tax, do not track the marijuana they sell from seed to sale, do not test products at a state licensed testing facility, and ship their high THC marijuana and marijuana products directly to consumers by way of FedEx”.
The filing states that plaintiffs seek monetary damages “exceeding $75,000,” those damages could total millions of dollars more, according to McHugh.
The suit also seeks a permanent injunction “barring the defendants from marketing, distributing or selling any marijuana or marijuana product in Missouri, including THCa flower or THCa products with a post-decarboxylation delta-9 tetrahydrocannabinol content of .3 percent or more of dry weight.”
Attorney Christopher McHugh of Joseph, Hollander & Craft LLC filed the case on behalf of the plaintiffs. McHugh is an accomplished cannabis industry attorney, was the first to bring suit against tax entities in Missouri for stacking marijuana taxes, and is the former CEO of Vertical.
If successful, the case could have sweeping implications for Missouri’s hemp and marijuana markets, and coupled with proposed changes to the federal legality of intoxicating, the case could have broad ramifications outside the state.
