Sold as Legal, Seized as Evidence: The Maryland Hemp-THC Crackdown

A Troubling Trend in Maryland Retail

Over the last year, I've noticed a troubling trend.

Maryland smoke shops, vape stores, convenience stores, and CBD retailers are being told by distributors that they can legally sell THC products because those products are "hemp-derived." The sales pitch usually sounds something like this:

"The product contains less than 0.3% THC, so it's legal under federal law."

The distributor provides a certificate of analysis. The packaging looks professional. The product is marketed as compliant with federal hemp regulations. The store owner assumes everything is legal.

Then investigators show up with a search warrant.

Unfortunately, I have represented business owners who learned this lesson the hard way.

The Biggest Mistake Maryland Store Owners Are Making

Many retailers are relying exclusively on federal hemp laws while ignoring Maryland cannabis laws. That is a dangerous mistake.

The 2018 Farm Bill legalized hemp under federal law and created a distinction between hemp and marijuana based largely on THC concentration. However, Maryland has created its own regulatory system governing cannabis products and intoxicating cannabinoids. The fact that a product may be marketed as legal under federal law does not automatically mean it can be legally sold in Maryland.

This is where many retailers get into trouble. The distributor is looking at federal law. The retailer is relying on the distributor. Meanwhile, Maryland regulators are looking at Maryland law.

Those are not always the same thing.

A Real Maryland Example

Recently, I represented the owner of a Maryland smoke shop that became the target of an investigation by the Maryland Alcohol, Tobacco, and Cannabis Commission (ATCC).

The investigation did not begin with a large-scale raid. It began with a single undercover purchase.

According to investigative reports, ATCC agents entered the business and purchased THC flower. After testing the product, investigators obtained a search warrant and returned to the store with ATCC agents, local law enforcement officers, and members of a DEA task force. Investigators then seized inventory, business records, and surveillance equipment.

Think about that for a moment. A business owner who believed he was operating a lawful retail store suddenly found himself facing a search warrant, the seizure of thousands of products, and the possibility of serious criminal charges.

That is not a hypothetical scenario. That is happening in Maryland.

What Investigators Are Looking For

Many store owners assume regulators are focused only on traditional marijuana dispensaries. That is not what I am seeing. Investigators are looking at products such as:

• THC and THCA flower
• Delta-8 and Delta-10 THC products
• THC gummies and beverages
• THC vape cartridges, concentrates, and tinctures

In the case I handled, investigators alleged the store contained thousands of THC-related products. Many were sold with labels suggesting they were federally compliant hemp products. The problem is that Maryland regulators may not view them that way.

Certificates of Analysis Are Not a Legal Defense

One of the most common statements I hear from store owners is: "My distributor told me the products were legal."

Unfortunately, that statement will not stop a search warrant. It will not prevent inventory from being seized. And it will not prevent criminal charges from being filed.

In the investigation I reviewed, regulators recovered supplier documentation and laboratory reports showing cannabis flower with THC concentrations ranging from approximately 28% to 35%.

The Hidden Cost of a Cannabis Investigation

When most business owners think about legal trouble, they think about criminal charges. In reality, the financial damage often begins long before a case reaches court. During a search warrant, investigators may seize:

• Retail inventory and product packaging
• Business records and invoices
• Security systems and surveillance footage
• Computers and devices

Criminal Charges Are a Real Possibility

Many retailers believe that the worst thing that can happen is receiving a warning letter or being told to remove products from their shelves. That assumption is dangerous.

Maryland law contains serious criminal penalties for individuals accused of unlawfully distributing cannabis products. One of the statutes frequently implicated in these investigations is Maryland Criminal Law § 5-602, which prohibits possession with intent to distribute and distribution of controlled dangerous substances.

A conviction can carry severe consequences, including incarceration, fines, probation, and a permanent criminal record. And the risks do not stop with the business — owners, managers, and employees may all become subjects of the investigation.

In the case I handled, the store owner was charged with possession with intent to distribute and faced potentially life-changing consequences. Fortunately, through aggressive representation, we were able to avoid the most severe outcomes. However, the case serves as a warning to every retailer who assumes supplier assurances are enough. Being charged does not mean being convicted — but early intervention matters.

Why Licensed Dispensaries Matter

One question I hear frequently is: "If these products are legal, why do dispensaries need licenses?"

The answer is simple. Maryland created a regulated cannabis market. Licensed dispensaries must comply with Maryland Cannabis Administration regulations, security requirements, product testing, seed-to-sale tracking, packaging and labeling rules, advertising restrictions, and age verification.

Dispensaries spend significant time and money complying with these regulations. Smoke shops and vape stores that attempt to sell intoxicating THC products outside of that framework may face substantial legal exposure.

Common Mistakes Store Owners Make

• Relying on federal law alone. Federal law is only part of the analysis. Maryland law matters.
• Trusting distributors without independent review. A supplier's opinion is not legal advice.
• Assuming everyone else is doing it. Industry practices do not determine legality.
• Ignoring regulatory changes. Cannabis laws continue to evolve rapidly.
• Waiting until after a search warrant. By the time investigators arrive, many important decisions have already been made.

What To Do If Investigators Contact Your Business

1. Do not consent to searches without legal advice.
2. Preserve records and invoices.
3. Avoid making statements without counsel. Know your rights during any police encounter.
4. Maintain copies of certificates of analysis and supplier information.
5. Contact an attorney immediately. Early intervention can significantly affect the outcome of a case.

"The cost of a compliance review is almost always less than the cost of defending a criminal investigation."
— Mandeep S. Chhabra, Esq., Founding Partner

The Bottom Line

The days of assuming that every hemp-derived THC product is automatically legal are over. Maryland regulators are actively investigating businesses, conducting undercover purchases, obtaining search warrants, seizing inventory, and pursuing criminal charges.

If you own a smoke shop, vape store, convenience store, CBD store, or wellness business, now is the time to evaluate whether your products comply with Maryland law — not just federal law. Do not rely solely on what a distributor tells you. Do not assume a certificate of analysis will protect you. And do not wait until investigators are standing at your front door.

Mandeep S. Chhabra is a Maryland criminal defense attorney and founding partner of Cochran & Chhabra, LLC. For more than two decades, he has represented clients throughout Maryland in high-stakes criminal matters, including drug distribution cases, search warrant litigation, and asset forfeiture proceedings. This article is provided for general informational purposes and is not legal advice. Reading it does not create an attorney-client relationship. For advice about your specific situation, contact a licensed Maryland attorney.