A trucker who faced the grim prospect of several years behind bars for transporting hemp through the state of Idaho has reached a plea agreement that will keep him out of jail, but the wholesale supplier of CBD that purchased the hemp hasn’t got its goods back from law enforcement and is still awaiting a resolution in a civil dispute.
Denis V. Palamarchuk of Oregon will plead guilty to a misdemeanor, and in exchange, prosecutors will drop a charge of felony trafficking, his attorney, James (“Jim”) Ball, said.
Ball said his client will receive credit for jail time served. He will be fined US$1,000, assessed court costs of $200 and must pay restitution of $1,800 for testing of the sample.
It could have been worse for Palamarchuk, who was carrying hemp destined for Colorado when he was stopped in January by Idaho law enforcement. If convicted of the felony trafficking charge, he faced a minimum sentence of five years in jail, Idaho attorneys said.
Instead, Palamarchuk will be sentenced to one year of unsupervised probation, and if he pays the court-ordered fees, the judge will dismiss the misdemeanor count from his record, said Ball, a former prosecuting attorney now with Manweiler, Breen, Ball & Davis PLLC.
“For him, it’s really good news,” the lawyer said in an interview.
On Sept. 26 in Ida County District Court in Boise, the judge overseeing the criminal case is expected to accept the plea and sentence Palamarchuk.
Timothy Marsano, a public information officer for the Idaho State Police, declined to comment on pending litigation.
The Office of Ida County Prosecuting Attorney Jan Bennetts recently filed stipulations in several cases related to hemp, including the prosecution against Palamarchuk.
“The 2018 Farm Bill’s intent of allowing the interstate transportation of hemp will only be realized in Idaho once there is a regulatory system in place, which has not yet occurred in Idaho,” Bennetts said in a statement. “It is our hope that such a regulatory system will be in place soon so those who would transport or ship through Idaho are not at risk of violating Idaho’s law.”
Big Sky Scientific—a Colorado-based wholesaler of CBD whose nearly 7,000 pounds of hemp was seized from the tractor-trailer—still hasn’t had the opportunity to view its goods since they were confiscated.
After a federal magistrate judge in February denied Big Sky’s motion for a temporary restraining order and preliminary injunction, the company took its grievance to the U.S. Court of Appeals for the Ninth Circuit. But since the related “in rem forfeiture” proceeding is pending in Idaho state court, the Ninth Circuit agreed with authorities in a Sept. 4 order that the federal court should have abstained from the case.
The Ninth Circuit “effectively reversed the district court and said, ‘You never should have [come] up with a decision,’ and then kicked it back down to the state court,” said Elijah Watkins, an attorney representing Big Sky Scientific, in an interview. “Now we need to go to the state court and ask the state court judge to decide whether or not hemp is legal.”
A crucial question in the litigation is whether Idaho authorities had the right to confiscate the goods or whether U.S. law preempted them from interfering with the interstate transportation of hemp sourced from a grower in Oregon and destined for Colorado.
The 2018 Farm Bill, which President Donald Trump signed, removed hemp with no more than 0.3 percent THC from the Controlled Substances Act. But Idaho state law doesn’t distinguish between marijuana and hemp with any amount of THC.
According to Big Sky Scientific, the 2018 Farm Bill preempted state police from interfering with the interstate transportation of industrial hemp. Idaho authorities argued they had the right under state law to confiscate the hemp, and Big Sky Scientific’s arguments were based on a regulatory framework under federal law that had not yet been created.
“Big Sky Scientific remains confident in its legal position, and its interpretation of the 2014 and 2018 Farm Bills—an interpretation agreed to by multiple federal agencies,” the company stated in a recent press release. “If it must, Big Sky stands ready to press the issue to the Idaho Supreme Court and beyond.”
Watkins, a trial attorney in Boise with Stoel Rives LLP, said he has requested to see and test the hemp to assess its current value, but the requests have been denied. The CBD in the hemp had an estimated value of $1.3 million, he said.
“We don’t know if there’s really any CBD value left, in which case it would pretty much be a total loss,” Watkins said in an interview. “I’m not a scientist, but the way nature works, if you pull a plant out of the ground, it eventually dies.”
Big Sky Scientific has offered to settle the case and future actions, including claims for money damages, if the state will return its hemp and allow it to transport it in interstate commerce, according to its Sept. 12 press release.
Watkins will potentially request damages for the value of the hemp if the case doesn’t settle.
“Pretty much any … farmer in our position would look at the same option if the police seized their giant truckload of potatoes and then caused them to rot,” he said. “They would ask for the money back for the value of the potatoes.”
Asked whether companies transporting hemp across the U.S. could learn any lessons from the case, Watkins responded, “Frankly, I don’t know so much that it’s a lesson for industry as it is a lesson for law enforcement. From an industry standpoint, Big Sky did everything it could possibly do to comply with the law. It bought from a licensed grower licensed under Oregon law by the Oregon Department of Agriculture. It had three different testing labs test it and certify that it was hemp.”
He recommended industry “cross those T’s and dot those I’s, make sure that the product you’re buying is below 0.3% THC, and when you’re driver is traveling, make sure they have all their paperwork in order, including copies of the actual testing results so that you can show an officer if they pull you over.”
Ball said Palamarchuk will plead guilty to failure to secure a proper or permitted load. He identified a problem with the paperwork his client was carrying, namely the bill of laden.
“The bigger lesson is to be learned by law enforcement that historically may have a hard time distinguishing between hemp and marijuana,” Watkins said.
He suggested law enforcement needs better testing procedures and training to identify differences between hemp and marijuana.
“Hopefully, we can avoid these sorts of misunderstandings in the future,” he said.
Ball said it’s important truck drivers carrying hemp understand the state laws where they are traveling.
He said his client had no idea he faced risks transporting hemp. “He essentially was a third-party driver,” Ball said. “His boss says, ‘This is what it is. It’s legal. Off you go. You’re going to Colorado … Go up there next week, and get it done.’ He had no idea there was anything that was illegal about it.”
Ball recommended a truck company’s legal counsel assess the truck route. And for the foreseeable future, he agreed that truck drivers transporting hemp will be avoiding the state of Idaho.