Elemental Processing of Lexington, a CBD producing company, has filed a lawsuit worth $44 million against HP Farms of Troutdale, Oregon. Elemental Processing claims that HP Farms sold it almost useless hemp seeds. This led to huge losses to the Kentucky based CBD producer.
The crop aimed at satisfying the rising demand for CBD in the country. CBD has become popular for its ability to treat health problems such as insomnia and anxiety.
Elemental Processing claims that HP Farms sold it over 6 million “male” seeds instead of “female” seeds as agreed. According to the suit, male seeds sell for pennies in comparison with female seeds. The female seeds go for as much as $1 each. This is because the female plant yields CBD-rich flowers. The existence of the male plant can prevent the female plant from producing flowers.
The suit filed by Elemental Processing states that after distribution of the seeds sold to it by HP Farms, farmers realized they were male. Elemental Processing is estimating a loss of over $44 million in profits.
HP Farms cannot be reached for a response to the lawsuit. Its lawyer Warner Allen did not return a call seeking HP’s comment on the lawsuit on Thursday.
The suit and its supporting documents show that Elemental Processing made $352,000 advance payment to HP Farms. It had promised to settle $3.5 million more or 15% of the total proceeds from the harvested flowers.
Oregon is a significant hemp grower with production increasing at a fast rate. The state leads the nation in the production of hemp. According to the Oregon Department of Agriculture, hemp farmers in Oregon planted approximately 7,000 acres of hemp in 2018. The number has shot up to 50,000 acres of hemp planted in Oregon this year.
Oregon State University has launched a Global Hemp Innovation Center this summer. The center has 40 scientists studying hemp and its uses.
Attorney Cartel Mann is representing Elemental Processing. He filed the lawsuit in Multnomah County Circuit Court on Wednesday.