Hemp Industry Leaders Question Allen, Texas Hemp Store Raids
Hemp Industry Leaders of Texas and Sabihe Kahn filed a lawsuit to hold the City of Allen, Texas, the Allen Police Department, and others accountable for their arrests of members of HILT for selling a legal substance, hemp, and calling it Marijuana after using a discredited testing method. David Sergi, the lead lawyer for the Hemp Industry Leaders of Texas and one of the nation’s premier hemp and cannabis attorneys, filed the lawsuit on Thursday in the US District Court Eastern District of Texas. This is the same Court that previously quashed administrative subpoenas from the DEA seeking information about the members of the Allen Vape Coalition (a predecessor of HILT.)
The City of Allen, Texas; Allen Police Department; Allen Police Chief Steve Dye; Collin County Sheriff Jim Skinner; and the US Drug Enforcement Agency are accused in the lawsuit of violating HILT’s and Sabhie Kahn’s Fourth, Fifth, Eighth, and Fourteenth Amendment rights, before, during, and after the defendants raided his legal hemp business. The lawsuit is attached below.
On August 27, 2024, the Allen Police Department raided Mr. Kahn’s business, known as Allen Smoke and Vamp, and other Allen-based members of Hemp Industry Leaders of Texas. These search warrants were based on questionable laboratory testing methods and standards. These search warrants were executed in coordination with the DEA and direct violation of Federal Judge Amos Mazzant’s order, staying enforcement of the DEA’s subpoenas. The DEA used the Allen Police Department to do what it could not. The DEA failed to respond and went to great lengths to do an end-run around a federal judge’s order.
Mr. Khan, a seventy-year-old man who’s never been in trouble (other than a speeding ticket), began operating a retail business in the hemp industry along with his wife and son. Mr. Khan is the manager of Allen Smoke and Vape in Allen, Texas. As managers of a retail operation in a highly regulated, newly legalized industry, Mr. Khan and his colleagues took great care to ensure compliance with all applicable laws and regulations, including requiring Certificates of Analysis (“COA”) for all products they sold. “In August, Mr. Khan sat in shackles in a jail cell without bond for two days.
The DEA, Allen Police Department, and Collin County Sheriff’s Office targeted Mr. Khan’s small business, bringing the full force of the federal government, teamed with an aggressive, headline-seeking police department, and together they treated Mr. Khan like the kingpin of a drug cartel, despite hemp being legal,” said Sergi.
“Mr. Khan, like other members of the Hemp Industry Leaders of Texas Hemp Industry Leaders of Texas are hard-working small businesspeople pursuing the American Dream,” said AJ Valador, founder of the association. “Every day, Mr. Khan and our members, many running minority-owned businesses, provide a much-needed and legal product to their community assisting people with challenges resulting from PTSD and physical pain.”
This campaign against businesses owned by Mr. Kahn and other Allen-based Hemp Industry Leaders of Texas members began in May 2024. The Allen Police Department sent a letter to various CBD and vape establishments in Allen, Texas, including Hemp Industry Leaders in Texas members, stating that their local businesses were selling ‘illegal THC products’ and violated the Texas Health and Safety Code Section 443 regarding ‘delivery of a controlled substance.’ The letter alludes to ‘various investigations’ leading the department to believe that certain businesses violate the Texas Controlled Substances Act and Section 443. The letter states that items are being sold ‘with a THC content well above the limits prescribed in Chapter 443.
Texas Health and Safety Code 443.151 provides as long as the hemp is tested prior to manufacture or processing, “e) A consumable hemp product is not required to be tested under Subsection (d) if each hemp-derived ingredient of the product: (1) has been tested by: (A) Subsections (b) and (c); or Subsection (d); and does not have a delta-9 tetrahydrocannabinol concentration of more than 0.3 percent. At the time of purchase by law enforcement prior to testing, products in Mr. Kahn’s store were legal. They had Certificates of Analysis performed at the time of harvest that were available to law enforcement to review. Hemp business owners such as Mr. Khan should be allowed to rely upon Certificates of Analysis that have previously determined the product to be legal.
“Mr. Kahn’s business was raided, yet they have Certificates of Analysis for all their products, and they rely on the COAs,” Sergi said. “They, in good faith, believe the COA is correct.”
Defendants sought a search warrant after testing a product that did not require further testing under Texas or Federal law. They sought testing that changed the chemical structure of the products that, rendered it illegal. The questionable testing standards combined all THC into a Delta-9 concentration and baselessly sought a search warrant that was overbroad and vague, which caused the law enforcement Defendants to seize legal items.
According to the lawsuit alleges that the Allen Police Department, under the direction of Police Chief Dye, violated the constitutional rights of Mr. Kahn and others because of the following actions:
i. the use of objectively unreasonable and inaccurate information.
ii. search and seizure of persons and property without probable cause
or without legal basis, such as a properly written warrant as
required by law.
iii. the use of outdated, unreliable THC Presumptive Field Tests; and
iv. misunderstanding the law, regardless of complexity.
The defendants named in this lawsuit continue to utilize unreliable scientific methods like Gas Chromatography and overbroad, vague search warrants for THC seizures. The entire basis for probable cause in this warrant presented to an unsuspecting magistrate was derived from an inadequate understanding of the law. Additionally, they should have known that the products being seized were legal under Texas and federal law at the time of the raids in Allen, Texas.
On June 25, 2024, Mr. Khan and other members of Hemp Industry Leaders in Texas, who are simply small local business owners selling consumable hemp products, e-cigarettes, vapes and cigarillos, ashtrays, and related items, received subpoenas from the DEA demanding:
“Records in the business’s possession containing identifying
information for the owner(s) of the business, including government
issued IDs, residential addresses, phone numbers, and vehicles
used for business purposes…financial accounts…. bank account
numbers…any accounts used to purchase inventory, pay for
utilities and/or upkeep of the business facilities and accounts used
to pay employees, sources of inventory, distributors, and
transportation services.”
“These subpoenas from the DEA were fishing expeditions. The DEA attempted to intimidate and bully these family businesses selling legal hemp,” said Sergi.
Judge Mazzant subsequently stayed the subpoenas on July 26, 2024. The Court ordered the DEA to respond to the movant’s allegation that the subpoenas were without lawful authority. However, no response to the Motion to Quash was ever filed.
Shortly after receiving the DEA subpoenas, on June 28, 2024, Mr. Khan, and other Hemp Industry Leaders in Texas members received a notice from the City of Allen. The city was considering rezoning certain areas and amending the local zoning codes to prohibit hemp-related businesses from operating in certain parts of town.
This Zoning Ordinance violated the Texas Health & Safety Code, which prohibits this regulation. Section 443.003 of the Code states: “Local Regulation Prohibited”. A municipality, county, or other political subdivision of this state may not enact, adopt, or enforce a rule, ordinance, order, resolution, or other regulation that prohibits hemp processing or the manufacturing or sale of a consumable hemp product as authorized by this chapter.
The attempt at rezoning was pushed to September 3, 2024, after Sergi began correspondence with the City of Allen’s Attorney, explaining Texas Law Section 443.003 prohibits a municipality from adopting a rule prohibiting the sale of consumable hemp.
Later, in September 2024, after some creative rewording, the City of Allen passed a different Zoning Ordinance limiting the locations of new smoke shops (more than 50% of sales related to the sale of cigarettes, electronic cigarettes, vapes, cigars, tobacco, pipes, and other smoking supplies), which tried to accomplish what Section 443.003 attempted to prevent. Though existing shops could continue, they could not expand, and no new shops could open.
The wrongful actions of the City of Allen Police Department have cast a negative public perception on the entire hemp industry and Hemp Industry Leaders in Texas. Many members of the public now associate hemp businesses, including those within our association, with illegal activity despite our members’ strict adherence to the law.
This stigma has already caused substantial harm to Hemp Industry Leaders in Texas. and its members, undermining the significant efforts and investments Hemp Industry Leaders in Texas have made to educate the public and authorities about the legality and benefits of hemp production and sales. The confiscation of Mr. Khan’s inventory, which consists solely of hemp products compliant with the 2018 Farm Bill and Texas law, has not only caused a financial loss to individual Hemp Industry Leaders in Texas members but has also discouraged other hemp businesses from participating in Hemp Industry Leaders in Texas’s events and initiatives.
Multiple members have reported a decrease in sales because of the increased scrutiny and fear of similar police actions, further exacerbating the negative financial impact on the hemp industry at large.
The City of Allen, the Collin County Sheriff’s Office, and the Allen Police Departments have created a climate of fear among Hemp Industry Leaders in Texasmembers, discouraging them from participating in everyday business activities and interactions with law enforcement. Many Hemp Industry Leaders in Texas members have expressed concerns that they, too, may be targeted by law enforcement despite operating within the confines of the law. This fear directly hampers its ability to promote and support the hemp industry in Texas, undermining its mission. The Defendants’ actions have deterred potential new members from joining the association. They have had several inquiries canceled from individuals who, before the raid, were interested in becoming members and engaging in lawful hemp commerce. Now, Hemp Industry Leaders in Texas’s ability to grow and effectively represent the broader hemp community is diminished.
Sergi and the Hemp Industry Leaders in Texas seek justice for these small businesses and their owners. These minority-owned businesses are committed to providing legal hemp products to their community.
For media interviews. Please contact Kevin Lampe at (312) 617-7280 or kevin@kurthlampe.com.
