Owners of two shops selling delta-8 in Nebraska settle with state AG

Attorney General Mike Hilgers speaks during a news conference in Lincoln. (Zach Wendling/Nebraska Examiner)

LINCOLN — Nebraska Attorney General Mike Hilgers announced settlements Wednesday with three of several owners targeted in 11 state lawsuits filed against vape shops selling legally murky variants of the THC-containing substance delta-8.

Hilgers has prioritized closing legal loopholes around delta-8, which he said opened when the 2018 federal farm bill limited delta-9, but not delta-8. The substance is often sold in modified food products made to look and taste like candy and snacks.

He and others have argued the potential health risks of solvents and substances that could be used in the loosely regulated manufacturing of the psychoactive products. Buyers and sellers of delta-8 products call such concerns a scare tactic.

The U.S. Food and Drug Administration received more than 100 reports of “adverse events” from delta-8 products with THC, officials said, including anxiety and vomiting. THC is the psychoactive ingredient in cannabis. 

“I am proud to announce these settlements, which represent important steps towards getting these untested, mislabeled, and dangerous THC products off the shelves in Nebraska,” Hilgers said in a statement. 

Time running short for settlements

He called on the other retailers that the Attorney General’s Office has sued in Dawes, Hall, Keith, Lancaster, Lincoln, Madison, Platte, Saline, Sarpy and Scotts Bluff Counties to negotiate with the state soon or watch the window close.

“Time is running short to settle on favorable terms with our office,” Hilgers said. “The door will soon close on obtaining settlements that waive penalties, and for those who do not settle, we will seek relief to the fullest extent of the law.” 

The state’s consumer protection lawsuits argue that the products are mislabeled, deceptively advertised and possibly contaminated. But lawyers for the targeted retailers say that Nebraska law regulating delta-8 products is at best unclear and that it might sidestep regulating the substance altogether.

The AG appeared to acknowledge the need to clarify the law by including more explicit language banning delta-8 products as part of his broader criminal justice proposals this year. State Sen. Teresa Ibach’s Legislative Bill 999 stalled in April.

Businesses feel stuck

W. Randall Paragas, an attorney for two of three defendants who settled, Stewart Scott Ritter and Alejandro Castro, criticized the state’s aggressive stance on the delta-8 products. Both owned the now-closed High Flow Cannabis of Grand Island.

For many of the affected vape shops, sellers of water pipes and similar retailers, these THC-containing products represent half of their sales and sometimes more, Paragas said. That can be the difference between keeping the doors open and not.

But he said business owners who lose these lawsuits risk paying hundreds of thousands of dollars in fines and penalties, plus the potential of having to pay the state’s cost of suing them. 

Those who settled agreed to stop selling any THC-containing hemp products and to turn over any of the unsold products already in their inventories for destruction. Failure to comply risks escalating six-figure costs for breaching the deal.

“The law in the State of Nebraska is not clear as to what’s prohibited and what is not prohibited,” he said. “The problem my clients run into, and I’m talking about small businesses, they don’t have the resources to fight the government.”

The third shop owner who settled, Lisa Lomack, who owns Ms. V Shop in Crete, did not immediately return calls seeking comment Wednesday afternoon. Her shop was still open Wednesday.

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