DEA Targets Smoke Shops Selling THC and Hemp Products in “Operation Vape Trail”

Business owners selling THC vapes, kratom, and other smoke shop products are increasingly being targeted for arrest and civil asset seizures by federal law enforcement agencies. The Drug Enforcement Administration (DEA), for example, recently put out a press release announcing that it had conducted several raids at smoke shops across the nation as part of “Operation Vape Trail.”

According to the press release, the DEA has been targeting businesses and individuals that purportedly sell illegal marijuana and psilocybin mushrooms. In total, the DEA claims that the agents conducting these raids have seized 2.3 million products containing THC, marijuana, and other substances, about $3.5 million in cash, more than $5.2 million in seized assets, and 115 firearms. The raids have resulted in at least 106 arrests as well.

While it appears that some of these businesses may have been operating illegally or knowingly selling illegal substances, it also appears that several of them are being unfairly targeted based on the government’s misinterpretation of the law, especially federal hemp laws which legalized a broad variety of cannabis products. 

Operation Vape Trail is the latest development in a trend of federal law enforcement agencies aggressively targeting smoke shops and other similar businesses. The raids in Operation Vape Trail come after a recent raid by other federal agencies in September that resulted in the seizure of 4.7 million Chinese e-cigarette products in Chicago. The Justice Department and Food and Drug Administration (FDA) formed a multi-agency task force in June 2024 to investigate illegal e-cigarette distribution and sales, pleading to “bring all available criminal and civil tools to bear against” the distribution of illegal e-cigarettes. 

Is the government targeting all smoke shops?

Not all smoke shops are being targeted by federal law enforcement, but all smoke shops are at risk of government overreach. While the government claims that it is only targeting those who market and distribute illegal or counterfeit products, the government has targeted innocent main street businesses too. 

The raids conducted as part of “Operation Vape Trail,” for example, suggest that the DEA is pursuing smoke shops and vape stores that are selling THC vapes and other hemp products containing THC and cannabinoids. The FDA has conducted several raids as well.

What kinds of smoke shop products are being targeted by the federal government?

Federal law enforcement agencies like the DEA and the FDA are increasingly targeting hemp products and other smoke shop products containing substances that are either legal or that exist in a legal grey area. Notably, for example, the products targeted in Operation Vape Trail were not limited to legal nicotine vapes.

According to the DEA, the seized products in Operation Vape Trail fall into four main buckets:

1. THC products including THC vapes, THC edibles such as gummies and candies, THC-infused cannabis flower, and pre-rolled cannabis cigarettes.
   • It is unclear whether these products were actually illegal marijuana or legal hemp products that the DEA mistook for illegal controlled substances. There has been an unfortunate trend of police mistaking legal hemp products for illegal THC or marijuana.
2. Products containing other hemp-derived intoxicating cannabinoids such as delta-8, delta-10, HHC, THCP, and THCA. These products may resemble illegal THC and marijuana products but are legal under the 2018 Farm Bill and various state laws as long as they are under 0.3% delta-9 THC. Notably, the DEA treats THCA as delta-9-THC after decarboxylation when distinguishing hemp from marijuana, which is a flawed and incorrect method that has been challenged in court.
   • Unfortunately, some of these hemp products can be defective and contain over the legal limit of THC without the store owner’s knowledge, though those store owners have a strong defense against criminal charges if they relied on lab results and vendor representations that the products were compliant hemp.
3. Non-cannabis psychoactive products such as mushroom-infused gummies, nitrous oxide (or “whippits”), bath salts, and synthetic kratom products (hydroxymitragynine, or 7-OH for short). While some of these products are illegal, some of them are not. Amanita mushrooms, for example, are a legal and common type of psychoactive mushroom that are often mistaken for psilocybin mushrooms, which are illegal under federal and most state laws. Moreover, the FDA has moved to schedule several of these products that are currently legal. Some products, like “whippits,” are illegal to sell for certain purposes.
4. Nicotine e-cigarettes that are unauthorized under FDA rules. That could include counterfeit products or mislabeled products.

Can smoke shop owners and employees be charged with a crime for selling THC vapes?

While THC vapes are legal under federal law if they contain less than 0.3% Delta-9-THC, many compliant retailers are still at risk of getting targeted by the DEA and other federal agencies based on misinterpretations of the law or due to the patchwork of inconsistent and contradictory state and federal laws governing hemp products.

Mom and pop smoke shops must rely on their supplier’s test results and Certificates of Analysis (COA) to determine whether their products are legal, all the more difficult when legal limits and packaging requirements vary state by state. Unfortunately, inconsistent and unclear laws have led law enforcement to target law-abiding businesses and individuals.

What federal crimes could smoke shop owners be charged with?

Primarily, criminal charges against smoke shops and their owners will usually be brought under the Controlled Substances Act (CSA). Any THC product containing more than 0.3% delta-9 THC by dry weight is classified as a Schedule I drug under federal law. Common felony charges include distribution or possession with intent to distribute under 21 U.S.C. § 841, maintaining a “drug-involved premises” under 21 U.S.C. § 856, and civil or criminal forfeiture of seized assets under 21 U.S.C. § 881. The CSA also criminalizes synthetic cannabinoids, opioids, and psilocybin mushrooms.

For nicotine products, the Food, Drug, and Cosmetic Act (FDCA) and Family Smoking Prevention and Tobacco Control Act are in play. The FDA has interpreted e-cigarettes and other “electronic smoking devices” as subject to the tobacco regulations. Except for a small set of authorized products, selling e-cigarettes can result in fines and imprisonment under the FDCA.

Additionally, Congress has amended the Prevent All Cigarette Trafficking (PACT) Act to prohibit the sale of tobacco products to people under the age of 21, and to ban the mailing of vapes and other smokeless tobacco products using the United States Postal Service.

Are state law enforcement agencies also conducting raids against smoke shops?

Yes. There have been several cases involving state and local law enforcement agencies conducting raids and arrests at smoke shops and vape stores. These cases often involve issues arising under state laws governing hemp/marijuana, e-cigarette regulations, sales to minors, licensing, public nuisances, or even RICO laws—racketeering crimes originally developed to target violent gangs, not local retailers. 

Because state laws regulating hemp, vapes, THC, and other smoke shop products can vary widely from state to state, a shop that is compliant in one state can be noncompliant in another. This can raise issues when purchasing from national or even regional wholesalers who may not know, or care, that some of their products are illegal to sell in certain states.

What defenses are available to smoke shop owners charged with federal crimes?

Innocent smoke shop owners usually have strong defenses against federal charges, especially if they work hard to stay in compliance with the law. The Supreme Court has held that federal drug charges require proof that the defendant knew they were dealing with an illegal drug.

The knowledge element can be critical in cases where the federal government has charged a retailer with selling THC products that were over the legal THC limit, but the retailer relied on lab results provided by a vendor that shows their products were compliant “hemp” under the Farm Bill. Even if the products were in fact over the limit, the defendant could introduce the lab results as evidence that they did not know that the product was over the limit.

Someone charged with selling illegal marijuana or THC products can also challenge the government’s testing and storage methods. This is especially pertinent in states where THCA is legal because THCA decarboxylates to delta-9 THC over time and when exposed to heat, meaning a compliant product can become non-compliant before it is tested by law enforcement. Many states also rely on testing methods that cannot distinguish between different types of THC and other hemp-derived cannabinoids.

There may also be chain-of-custody issues that arise in garden variety drug cases. The government is constitutionally required to save all lab results and data, custody forms, photographs, and other documents related to its investigation, and provide these to you and your attorney before trial.  

Just as federal drug charges require proof of a defendant’s knowledge, federal charges based on unlawful nicotine products also require evidence of a defendant’s criminal intent. Although a misdemeanor sale of unauthorized e-cigarettes under the FDCA has strict liability, the government must prove intent to defraud or mislead to secure a felony conviction.

The “good-faith guaranty defense” is available for FDCA violations under 21 U.S.C. § 333(c) for those who received products via interstate commerce in good faith and can furnish supplier identity and a signed U.S. guaranty that the goods were compliant.

And of course, in any criminal case, if the government violated your Fourth Amendment rights to privacy and property during the raid and search of your property, any evidence they obtain may be “tainted” and inadmissible against in court. If the police did not acquire a valid search warrant based on probable cause, or if the warrant was constitutionally deficient, the “fruits” of the search must be suppressed.

What best practices should businesses follow when selling THC vapes and other smoke shop products?

After any raid or inspection by law enforcement, having the right paperwork is often the difference between an administrative fix and criminal exposure. By following these best practices, you can reduce risk at the register long before an inspector walks in.

• Buy only from licensed, U.S.-based vendors. Collect copies of their licenses, EIN and W-9, insurance, and a written guaranty that all products meet federal and state law. Require batch-specific COAs with each shipment and make vendor indemnity part of the purchase terms. 
• Verify COAs before stocking. Ensure the COA matches the brand, product, flavor, and lot. Make sure it includes testing dates, methods, and lab accreditation. In some states, businesses must keep copies of the COAs for each of their THC products.
• Maintain thorough records. Keep all vendor files, purchase order and invoices, COAs, QR screenshots, intake checklists, training logs, and SKU inventory.
• Familiarize yourself with your state’s cannabis laws and regulations. Nothing can guarantee that a local district attorney or sheriff won’t overreach or misinterpret the state’s cannabis laws, but a firm knowledge of regulations and standards on retailers help minimize the chances of any misunderstandings. Stay in compliance and keep your license current.
• For nicotine e-cigarettes, stock only products with FDA marketing orders. If in doubt, consult the FDA’s Searchable Tobacco Products Database of authorized products.

What should I do if I am arrested for selling THC products or other smoke shop products?

The first thing you should do is invoke your Miranda rights to remain silent and request an attorney prior to speaking to law enforcement. Do not consent to any searches and preserve surveillance footage and POS data. Then consult an attorney on what strategies you should pursue to ensure the best possible outcome given your unique circumstances.

If you’ve been arrested or charged with a federal crime based on the sale of smoke shop products like THC vapes, it’s critical to have an experienced criminal defense lawyer who understands both state and federal drug laws. Contact our firm.

The Church Law Firm has defended dozens of people and businesses facing cannabis-related charges, including based on the sale of legal vape and cannabis products. Our team understands the science and the law governing THC and hemp products and have secured favorable outcomes in THC product disputes and returns of seized goods. If your store has been searched, your inventory seized, or you received a federal or state notice, contact our firm today.