For more than a year, the Portland company True North Extracts has sold a marijuana product it says is pure, safe and legal.
True North manufactures and sells CO2 oil—a marijuana concentrate made by stripping compounds like THC from the plant using compressed carbon dioxide. Users inhale the gooey, amber oil through vaporizer pens.
True North sells its vape-pen cartridges at medical marijuana dispensaries, advertising its product as free from the chemical solvents in some cannabis oils.
"True North products are designed for anyone looking for a completely clean and gentle experience," the company's website says, "that benefits the mind, body and soul."
But the owners of True North Extracts have been recently waylaid by a traditional nemesis of the marijuana business: the U.S. Drug Enforcement Administration.
A federal search-warrant affidavit shows that DEA agents searched the homes of True North's owners, Michael Andrew "Drew" Dillon and Michael Corby, after the Multnomah County Sheriff's Office shut down True North's oil-extraction facility in Wood Village, saying the warehouse violated building and fire codes.
In the Dec. 23 search-warrant affidavit, DEA agent Laci Larsen said True North Extracts' operators had only enough Oregon Medical Marijuana Program registration cards to supply a handful of patients, yet had produced more than 50 pounds of CO2 oil.
Larsen also wrote she suspected Dillon and Corby of money laundering and endangering human life while illegally manufacturing a controlled substance—both federal felonies.
"I believe that Michael Corby, Michael Dillon and [facility manager] David Daley are still participating in an illegal marijuana/hashish oil manufacturing and distribution business," Larsen writes, "and are trying to use the OMMP laws as a legal smoke screen for their operation."
The DEA assertions highlight the tangled, confusing legal framework that surrounds marijuana in Oregon.
The state continues to enforce different regulatory frameworks for medical and recreational marijuana—while federal law doesn't recognize either of them.
County district attorneys are loath to prosecute pot cases, and even the U.S. Department of Justice acknowledged in a 2014 document known as the "Cole Memo" that it won't try to clamp down on legal marijuana—so long as the plant doesn't cross state lines.
Yet the search-and-seizure operation the feds executed just before Christmas shows it is still possible to run afoul of the DEA in Oregon, where recreational marijuana became legal in 2014—even though no charges have yet been filed.
Dillon's lawyer, Bear Wilner-Nugent, says Assistant U.S. Attorney Pat Ehlers has assured him no one from True North Extracts will face criminal charges.
The U.S. Attorney's Office for the District of Oregon declined to comment on the status of the investigation.
Vaping—inhaling heated cannabis vapors from an electronic pen—remains a tiny part of the marijuana market.
That's partly because in Oregon, concentrates like CO2 oil can be legally sold only to medical marijuana cardholders. Recreational users still can't buy them, although that's likely to change later this year.
But weed connoisseurs say vape pens—and the extracted cannabis oil that fills them—are the vanguard of cannabis, delivering a high without putting smoke in users' lungs.
True North Group LLC was registered with the state in September 2014, and True North Extracts started selling CO2 oil in early 2015. The product met with rave reviews.
"Instead of bringing weed with me before work, I brought my pen," a reviewer at the website Cannabis Chronicles wrote last August. "My car didn't smell like weed, and the high left me feeling clearer than when I smoke herb, and that's what you want if you're a before-work smoker."
The federal affidavit says an investigation of True North Extracts began Dec. 16, 2015, when a Wood Village code inspector asked for the Multnomah County Sheriff's Office to help in shutting down the company for fire-code violations.
Sheriff's deputies asked to see the company's OMMP licenses—but employees could not find the licenses, and state officials told the deputies that there were no cards on file in True North's name.
Company operators individually possessed enough OMMP registration cards to grow medical pot for just 12 patients, deputies told the DEA.
The affidavit says True North employees, including manager David Daley, agreed to let sheriff's deputies search the building. Deputies found "2,000 grams of finished hashish oil…in vials" and another 50 pounds of CO2 oil. That's enough to supply thousands of people.
In her Dec. 23 affidavit, Larsen wrote that records obtained from the search show True North expected to make $1.2 million in 2015, with a net profit of $400,000.
She also said the search found U.S. Postal Service shipping receipts for packages sent to Florida and California.
"It is illegal to ship hashish oil via U.S. Mail," Larsen's affidavit says. "In fact, it is illegal to ship marijuana products, in any form, out of state."
Agents searched Dillon's Portland home and Corby's Damascus home Dec. 28. At Dillon's home, according to a Jan. 8 court filing, they seized financial records, a pistol, two rifles, butane hash oil and THC extract. At Corby's home, they seized 312 marijuana plants, butane hash oil and processed marijuana.
Corby's attorney, Amy Margolis, declined to comment. "It is not my practice to comment on criminal cases, pending or not, even if we do not anticipate charges," she says.
Wilner-Nugent, Dillon's lawyer, says he expects his client to be vindicated.
"Mr. Dillon remains confident," he says, "that True North will soon be free to focus on what it is best known for—its expertise in crafting CO2-extracted oils preferred by medical marijuana patients around Oregon."
Clarification: This story identified Bear Wilner-Nugent as the lawyer representing Michael Andrew "Drew" Dillon. Wilner-Nugent represents Dillon in potential civil forfeiture. Leland Berger represents Dillon as a criminal defense attorney. Berger declined comment.