Stacey and Mary Ruth Hamilton say CBD bust has cost $50K so far
By Michelle Willard
One Murfreesboro business owner said “Operation Candy Crush” has cost her and her wife more than $50,000 in seized cash, attorney’s fees and lost revenue.
Stacey Hamilton and her wife Mary Ruth co-own two vapor stores in Murfreesboro – Kaleidoscope Custom Vapor Lounge on South Church Street and Memorial Boulevard – that were caught up in a raid targeting stores that sell products containing cannabidiol, a.k.a., CBD.
“The officers at my Church Street location photographed and seized CBD products, close to $3,000 in cash, the cash register and without a warrant they seized several bottles of eLiquid (which is tobacco based) stating ‘they were appealing to kids,'” Hamilton said.
Hamilton said she was at her Memorial Boulevard storefront around 10:30 a.m. Monday, Feb. 12 when she received a call from an employee at her store on South Church Street. The employee told her the police were there, confiscating products containing CBD and demanding her presence.
“I was preparing to leave when three officers entered the Memorial location and told me my store was being closed by order of Judge Royce Taylor,” Hamilton said. The officers posted a notice on the door, padlocked the store and loaded Hamilton into a paddy wagon to be taken to the Rutherford County Adult Detention Center along with her wife and business partner.
The Candy Crush saga
The same scene was taking place at her South Church Street store as well as other vapor and discount tobacco stores across the county.
“Teams of officers from Smyrna, Murfreesboro, Rutherford County, La Vergne, the TBI, DEA and FBI conducted raids on stores selling candy containing marijuana derivatives,” Rutherford County Sheriff Mike Fitzhugh said at a press conference held Monday, Feb. 12.
In all, 23 stores were closed and padlocked until Friday evening. All the store owners were also charged with civil and criminal offenses of selling and possessing a schedule VI drug.
The raids were dubbed “Operation Candy Crush” because the departments were focused on seizing candy products containing CBD, which is derived from industrial hemp and not marijuana, that the agencies claimed were attractive to children.
Cannabidiol is a derivative of hemp that has been legal to sell in Tennessee since 2015. It is sold in the form of liquids used in vapors or as a nutritional supplement, as well as gummy bears, gummy worms and items that commonly look like candy.
“We feel these stores are marketing these items toward minors,” Fitzhugh said, referring to gummy bears and other candy-flavored items. The officers also seized products from Vapesboro on Middle Tennessee Boulevard that contain synthetic drugs, which are illegal in Tennessee.
Fitzhugh said sheriff’s narcotics detectives and Smyrna Police launched the investigation last year following complaints from parents and advertisements about the products.
The store owners were charged under a state law that regulates high potency CBD products, but the items seized from the store owners may be governed by a different law.
Jones indited the store owners under a separate Tennessee law that allows for the use of a more potent variety that allows for a THC threshold of 0.9 percent. The more potent varieties are derived from marijuana and require a physician’s recommendation and proper labeling to be sold. If those products don’t meet the state’s standard then they are to be treated as a schedule VI drug, the sale of which is a felony.
“I believe you need a prescription to buy them and a judge agreed with me,” Jones said, adding the TBI classified some products containing CBD as a schedule VI drug so he treated these as such.
While Judge Taylor may have agreed with the Grand Jury indictments, advocates for industrial hemp believe Jones used the wrong statute to charge the business owners.
“General Jones could not be more misguided in his attempt to interpret the law. He is completely mistaken, perhaps intentionally so,” said Joe Kirkpatrick, president Tennessee Hemp Industries Association.
Kirkpatrick said the sale of products containing CBD is legal and governed by Tennessee Public Chapter 369, which was passed by the legislature and signed into law by Gov. Bill Haslam in 2017.
The law makes any topical or ingestible, industrial hemp-derived products legal to sell and possess in Tennessee as long as the products do not exceed a THC threshold of 0.3 percent. THC is the compound that makes marijuana psychoactive and illegal.
After Public Chapter 369 became law, Hamilton decided to start selling CBD because she had personally seen the how the compound can help with a variety of medical issues.
Kirkpatrick said most of the items seized Monday are likely derived from industrial hemp and not marijuana. The two plants are defined differently under state and federal law.
But it may be impossible to tell where the CBD came from, Kirkpatrick said. They can only test for the level of THC in the products.
The origin of the products can be verified if the manufacturer can provide certificates of analysis from a third party and a chain of custody.
“Since CBD is an isolated molecule it is impossible to tell if it is derived from industrial hemp or marijuana,” he said. “Nonetheless, it doesn’t get anyone high, adult or child.”
Hamilton said she has documentation that proves her products, none of which were packaged to look like candy, are derived from industrial hemp and fall under the 0.3 percent threshold. She further clarified, “Kaleidoscope does NOT sell CBD candy. There was none purchased undercover and none confiscated because we DO NOT sell it.”
Court rules in store owners’ favor
The Hamiltons and 15 other defendants were arraigned Friday morning, Feb. 16 where each defendant pleaded not guilty to the criminal charges. If found guilty, they each face two to 12 years in prison and a fine of up to $5,000 for each charge.
In a hearing Friday afternoon on the civil charges, Taylor ruled the stores would be allowed to reopen pending a March 19 hearing date as long as they do not sell any products containing CBD.
“I was so elated and happy,” Stacey Hamilton said following the hearing Friday afternoon. She reopened her two Kaleidoscope Custom Vapor Lounge locations at 5 p.m. Friday.
Taylor’s ruling also placed the burden of proof on the prosecutors to prove that the products violate state law, which requires them to prove that the products contain CBD derived from marijuana and not industrial hemp.
“His full statement let us all know that if it was derived from industrial hemp, it’s legal,” Hamilton said.
Hamilton also said she and the others were offered plea deals to resolve the cases quickly. The pleas would require them to forfeit all the cash and products confiscated. They would also be banned from selling CBD products. In exchange, the owners get to reopen their stores, have to serve six months probation and have a chance to have their records expunged after a few years.
“No one has accepted a plea deal and I hope it won’t be necessary for anyone to,” Hamilton said, adding she plans to fight the charges and defend the business she believes is legal.
The cost of the fight and having to close for five days has been high for the Hamiltons.
Between both stores, the officers confiscated more than $5,000 in cash, the cash registers, all products containing CBD and several vials of tobacco-based e-liquid for use in vaping. In all, the officers took more than $10,000 in cash and products, Hamilton said.
She also said she has lost more than $20,000 in revenue from having her stores closed for the week.
With the cost of bonding the couple out of jail ($4,000), attorney’s fees ($10,000) and lost employee wages ($1,500), the total breeched a $50,000 economic impact on one store.
Michelle Willard is a freelance journalist who fills her days with social media marketing, politics, true crime, and taking complaints. You file complaints with her on Twitter @MichWillard.
