Ryan Shore wants his hemp back.
The problems started in January, when Idaho State Police confiscated 6,700 pounds of hemp the company was having shipped from a farm in Oregon to Colorado.
The truck driver was arrested for illegally hauling hemp and goes to trial in October. Big Sky has filed a lawsuit against the Idaho State Police and the Ada County Idaho prosecutor’s office for taking the hemp.
It has also filed an appeal with the United States Court of Appeals for the Ninth Circuit to grant an injunction to force the county to release the product.
“They are holding the hemp. They are holding the truck,” Shore said.
Big Sky, which distills the CBD contained in hemp, purchased the product in question from Boones Ferry Berry Farm in Oregon at a cost of $300,000.
CBD is the non-psychoactive chemical present in hemp and marijuana.
The hemp’s market value at the time of purchase was around $1.2 million, Shore said, but in the intervening months, prices for CBD have declined slightly.
“If we had it months ago and sold it months ago, it would have been very beneficial compared to now.”
Getting swept up in a drug trafficking case wasn’t the auspicious beginning Big Sky envisioned when the company launched in the fall of 2018. Along with hundreds of other hemp startups, the company was founded in anticipation of the passage of the Agriculture Improvement Act of 2018, which legalized hemp at the federal level.
“We officially signed all of our papers days before this happened,” Shore said.
The global industrial hemp market size was estimated at $3.9 billion in 2017, and is projected to expand by 14 percent annually between 2019 and 2022.
The fastest-growing segment is extracting and separating out CBD, an ingredient manufacturers are using in a dizzying array of lotions, balms and other personal and health care products.
The CBD market could hit $16 billion by 2025, according to a recent analysis by Cowen and Co.
“We buried hemp in a time capsule, and we just dug it up,” said Shore, referring to the long-held view that hemp is one of humankind’s oldest agricultural products. “It’s an awesome opportunity.”
The lawsuit has changed the nature of Big Sky operations, for better and for worse. Orders slowed down initially, but the high profile nature of the case has opened the door to some strategic partnerships, such as a cloning venture in New Mexico.
Big Sky is lucky in that it’s extremely well-capitalized, said Shore.
“If we didn’t have supportive investors who really believed in our cause, we wouldn’t be able to defend rights against state government,” he said. He declined to reveal the names of investors or the amount of funding the company has received.
In addition to fighting its own legal battles, Big Sky is paying legal fees for Denis Palamarchuk, the driver who faces drug trafficking charges.
The Idaho State Police has apparently asked Big Sky for guidance on how to care for the hemp and to pay for storage while the case is being litigated.
“I believe it is their responsibility to pay,” Shore said.
Big Sky is still transporting hemp but has overhauled its shipping procedures. The company obtains licenses to transport hemp in targeted states and puts them in a booklet for drivers to carry on the job.
“We recommend they only go through states where they have paperwork,” he said.
The U.S. Court of Appeals has put Big Sky’s case on expedited filing, and Shore said he expects a hearing to take place in the next four or five months.