Montana Hemp Farmers Awarded $65M Over Fraud Hemp Crop Deal
State By State

Hemp Growers In Montana Win $65M Settlement Over “Deceptive” Deal

State By State

Hemp Growers In Montana Win $65M Settlement Over “Deceptive” Deal

Author Contributing Writer
Published Aug 06, 2021
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Cannabis is one of the most versatile plants on planet earth. It produces flower that serves as medication to many, while hemp is an incredible resource that creates everything from rolling papers to hand soap. That being said, it was only a matter of time until major companies attempted to milk local farmers for their hemp crops.

Per Marijuana Moment, 25 hemp farmers in Montana have been awarded $65M in punitive damages after the court found that they were scammed by American and Canadian entrepreneurs who promised farmers major compensation for their crops. The court found these businessmen from both Canada and the U.S. committed negligence, fraud, and deceit after they didn’t uphold their end of the bargain.

Montana’s hemp production began blossoming in 2018 which is when farmers planted upwards of 22,000 acres of the plant. USA Biofuels entered a contract with over two dozen farms for 22,000 acres of hemp. The agreement between the farms and the company promised farmers would receive seeds for their crops and an additional $100 per acre. Once the hemp was harvested, farmers would receive another $400 for each acre on dry land and $600 per acre on irrigated land.

Things started taking a left turn early when USA Biofuels began to promise that their payment for the first $100/acre was coming soon. Six weeks later, they did receive their payment but not from USA Biofuels. Canadian company Vitality Natural Health, LLC moved forward with paying the farmers, though that would be the first and the last time they would receive proper compensation from either company. USA Biofuels, in fact, told the farmers that they’d pursue legal action if they chose to sell the crops elsewhere, leaving the crops untouched.

Attorney Ross Johnson, who represented 25 plaintiffs in the case, said that USA Biofuels was a shell company without assets or even a banking account. Johnson said that the entrepreneurs were trying to cash out on the rising trend of CBD in America by acquiring large quantities of hemp and establishing processing and distribution before taking their product to the public.

Johnson explained that a few of the defendants in the lawsuit would’ve made hundreds of millions of dollars if a successful IPO was launched, though “the whole house of cards would have tumbled right off the bat if they let the farmers sell their crop [to someone else].”

“[The defendants] were gambling with the farmers’ livelihood, their land, and their labor, for the shot that they might hit a big IPO,” said Johnson. “And when it went south, they just tried to ride off into the sunset with the hope that nothing would happen to them, but the jury in Wolf Point didn’t want that to happen.”

The plaintiffs were awarded $65M, the largest civil award in Montana’s history. $56M of that was paid out as punitive damages which the jurors hope would send a message to the defendants and those who attempted to execute a similar scheme.

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