4 businesses sue, saying action will make them close. Before federal officials outlawed synthetic pot last month, stores got rich selling it. In fact, they became addicted to the profits and now argue their businesses can't survive without it.
"If my business were to suffer an immediate loss in sales, it could not survive," Scott Farrell, general manager of Down in the Valley in Golden Valley, said in an affidavit. He said the newly banned stuff accounted for more than 41 percent of the store's gross profit between April and September.
Down in the Valley is one of four Minnesota shops that have sued the U.S. Drug Enforcement Administration and the Justice Department over the DEA's Nov. 24 emergency order making synthetic cannabinoids just as illegal as marijuana and methamphetamine.
The shops claim the DEA's action is illegal and violates due process. They also contend there is no scientific evidence showing the newly banned substances actually have narcotic effects. They want an injunction and temporary restraining order banning enforcement of the law.
"The DEA has overstepped its bounds by taking over the acts of Congress without sufficient scientific evidence or support," said Marc Kurzman, the attorney representing the shops. "We're arguing that the government should not be above the law."
Charles Miller, a Justice Department spokesman in Washington, said the government wasn't commenting on the suit but would be filing an answer with the court by Jan. 6.
"We will file something at that time, and it will speak for itself," he said.
A chemistry professor discovered synthetic cannabinoids in 1995, and users believe they mimic the effects of marijuana. They are sold as incense under a variety of names that evoke the marijuana world, including K2, Spice, Mojo, Smoke, Genie, Yucatan Fire, Skunk, Red X Dawn and Pandora Potpourri.
When the DEA published its emergency notice in the Federal Register, it said that it was doing so "to avoid an imminent hazard to the public safety" and that the order "will not have a significant economic impact on a substantial number of small entities."
Kurzman and the shops dispute both contentions. In sworn affidavits accompanying the lawsuit, the owners of the four shops contend the DEA's action will have a big impact on them, if not put them out of business.
Wael Sakallah, owner of Hideaway in Minneapolis, said that in the past year, the incenses the DEA seeks to criminalize have accounted for more than 70 percent of his sales and that from Jan. 1 to Oct. 31, the products accounted for almost $609,500 in gross profits.
"If my business were to suffer an immediate 70 percent loss in sales, it could not survive; I would be forced to close the business within weeks," Sakallah wrote.
Last year, fake pot accounted for $1.1 million in sales, or about 40 percent of the annual sales at Discontent, a shop in Moorhead that is one of the plaintiffs, said the company's president, Tom Tepley.
"Currently, the sale of incense is 57 percent of my sales, and I would lose over $6,000 a day in sales if I had to stop selling the product," Tepley said in an affidavit. "If my business were to suffer an immediate 40 percent loss in sales, it could not survive; I would be forced to let 16 employees go, raise health insurance premiums or cease health benefits for my employees and close two stores within three months."
Some cities, including Duluth, had moved individually to outlaw the substances. When Duluth enacted its ordinance, it said it was doing it on public-health grounds, claiming preliminary studies had shown that three synthetic cannabinoids "are between 3 and 100 times more potent than THC, the active ingredient in marijuana."
But proponents of the substances say there isn't much scientific research backing the claim that the stuff acts like a narcotic. Todd Vanderah, a professor of pharmacology and anesthesiology at the University of Arizona Medical School in Tucson, wrote in an affidavit provided by the plaintiffs that the five compounds included in the DEA's emergency order "have not been tested for their ability to produce rewarding effects in animals."
"In my professional opinion the five listed synthetic cannabinoids have not been shown to result in addiction, activation of the central nervous system rewarding behavior, nor tested for psychoactivity in animals," he wrote, going on to say there was no evidence the substances would have an effect on humans.
So why do people use it?
"I personally don't know people who use it, but I'm representing people who sell it," said Kurzman in response to the question. "They say people are buying to use it as incense, which they use for comfort. The belief that you can get high from it is fueled by the newspapers."
He said there was a need to research the substances before outlawing them. "Without scientific research, we think it's premature to turn tens of thousands or millions of people into felons overnight," he said. "We prefer the regular rulemaking. It's the whole process of due process."
The fourth shop involved in the suit is Duluth's Last Place on Earth, owned by James Carlson. In his affidavit, he said that the synthetic pot had accounted for more than 50 percent of his store's sales over the past year and that in November alone, he made $96,500 profit off the herbal incense.
So far this year, his store in downtown Duluth has made $932,000 profit from the substances the DEA is outlawing.
"If my business were to suffer an immediate 50 percent loss in sales, it could not survive," he wrote. "I would be forced to close the business or file bankruptcy within weeks."
David Hanners can be reached at 612-338-6516.
By David Hanners
Updated: 12/29/2010 11:36:30 PM CST
Minnesota sellers of fake pot fighting DEA's ban