Criminal Investigation Shows CBD Still Faces Legal Threats Even In Oregon

The Linn County Sheriff’s Office declined to comment

The packages smelled strongly of marijuana. That’s what a UPS worker told Albany police and a Linn County sheriff’s deputy Jan. 18, when four parcels addressed to Key Compounds, a CBD processing company in Albany, arrived from Massachusetts.

That call sparked a monthslong criminal investigation of the company, which processes hemp to create cannabidiol oil, leading to the search and seizure of most of the business’s assets. Investigators even tried to obtain a search warrant for the office of the attorney who represents Key Compounds, a highly unusual move.

Alex Reyter, CEO of Key Compounds LLC, says he was trying to follow the rules when he received the four packages of CBD. Law enforcement disagrees. “I still believe that what they had was marijuana and marijuana extract by definition,” Linn County prosecutor Coleen Cerda wrote in a May 30 email obtained by WW to one of Reyter’s attorneys.

The Linn County Sheriff’s Office declined to comment because its investigation is still open, but the case highlights one more aspect of the confusing nature of running a business in which state and federal laws do not align.

Congress opened up the industrial hemp industry when it passed the 2018 Farm Bill, which allows farmers to ship hemp products across state lines, so long as they contain no more than 0.3 percent THC. But that places the burden on local law enforcement, which may not have expertise in hemp, to recognize the difference between what’s legal and what’s not. Hemp is different from cannabis because it does not contain enough THC to give users a high.

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