Board Settles with Unicorn Brands LLC

Settles multiple violations for creating synthetically-derived THC from hemp 

OLYMPIA, WA -

The Liquor and Cannabis Board (board) Tuesday approved a settlement agreement with Raymond, WA cannabis processor Unicorn Brands LLC (Unicorn). The agreement settles a year-long investigation and multiple Administrative Violation Notices (AVNs) for creating synthetically-derived THC from hemp and distributing it into the state-regulated cannabis market.

“This was an important case about the integrity of the legal cannabis system voters approved ten years ago and which today flourishes in Washington with a carefully controlled system of production, processing and selling of cannabis to adults,” board chair David Postman wrote in an email sent to all cannabis licensees. The message reminds cannabis businesses of the prohibition on the sort of laboratory conversions involved in the Unicorn case.

The board found that Unicorn cooperated with the investigation and ceased using the conversion process after the LCB issued a July 2021 policy statement that made clear that synthetically-derived THC from hemp was prohibited under current rules and law. The comprehensive settlement ensures that Unicorn will not resume converting hemp into THC and brings an end to a lengthy and complex investigation.

The board wants to thank the LCB staff for its hard work, including officers from the Education and Enforcement Division, its Examiner’s Unit and the agency’s chief chemist.

The next important step in protecting the public health is to eliminate the burgeoning market for Delta 8 products and other synthetically-derived products outside the regulated market. These gummies and other edibles are being illegally sold in convenience stores and online in Washington and across the country. We hope the 2023 legislative session will see action to assist in eliminating these illegal sales.

Settled AVNs
On October 12, 2021, Enforcement issued an AVN alleging four violations in connection with Unicorn’s synthesis process: 1) Misuse of License, 2) Criminal Conduct, 3) Noncompliant Extraction, and 4) Traceability Failure. Additionally, because Unicorn had manufactured a controlled substance, outside the safe harbor provided by RCW 69.50.401(3), Enforcement seized the contraband synthetic cannabis products on October 13, 2021.

After extensive negotiations, the agency and Unicorn reached an agreement to settle these cases. As part of this settlement, the Enforcement and Education Division has agreed to fully withdraw the alleged criminal conduct charge. In exchange, Unicorn stipulates and fully admits to the remaining three violations: Misuse of License, Noncompliant Extraction, and Traceability Failure. Further, Unicorn has agreed to pay the standard monetary penalties for the three stipulated violations, accept forfeiture of the seized products, and waive further administrative review. Finally, Unicorn has agreed to the condition that “it shall not use its license to produce or manufacture Delta 8 THC, Delta-9 THC, or any similar synthetically-produced THC from any hemp-based sources in the State of Washington unless explicitly authorized by a subsequent change in state law that allows the licensee to do so.