Back in January, Tahoe Hemp LLC – a Nevada-based hemp producer – filed a lawsuit against Carson City. The suit claimed that the city denied the grower access to a plot of land for hemp cultivation purposes. Although Tahoe didn’t clarify its plans to grow hemp plants on the plot of land at the point of purchase/sale in 2010, Nevada’s First Judicial District Court saw fit to reject the city’s motion to dismiss.

A motion to dismiss is typically filed by a defendant at the beginning of a lawsuit. In this particular case, Carson City had been told by a judge that it cannot sidestep the lawsuit just because it did not anticipate hemp legalization. Hemp cultivation became federally legal two years ago, following President Donald Trump’s signing of the United States Farm Bill on December 20, 2018. 

The land being fought for by Tahoe in the hemp grower lawsuit was not expected to be transformed into a cultivation site, according to the District Court ruling. Covering 100 acres, the land is owned by the city and is based in the Buzzy’s Ranch region. It was leased to Tahoe on June 6, 2019 by the Jarrard Family Trust.

Based on the judge’s decision in mid-April, matters regarding hemp cultivation’s impact on city liability – of which were raised by Carson City’s District Attorney’s Office – can now move forward for trial.

Nevada city hemp lawsuit: Previous property owner can continue using/leasing land for agricultural purposes 

The District Attorney’s Office filed the motion in response to Tahoe’s suit in March. Following the filing, Buzzy’s Ranch – the property’s previous owner – has been told that it can continue to either use or lease the land for agricultural reasons. However, this excludes hemp cultivation and has done so since the sale agreement was confirmed 10 years ago.

Jarrard Family Trust did not foresee the circumstances surrounding hemp’s legalization, argued the city. Moreover, the defendant made the argument that the family trust is safeguarded by a protectable protective private property interest. Nonetheless, this did not stop Tahoe from suing for $15 million in damages; citing that the city violated its agreement with the family trust by rejecting rights to use the property for agricultural purposes.

Details surrounding the Nevada city hemp lawsuit are highlighted below in a letter addressed to Tahoe from  Ben Johnson of the Carson City District Attorney’s Office:

“In 2010, Carson City applied for and received a Conservation and Resource Protection Grant from the Nevada Division of Lands to help fund the purchase of the property. Pursuant to the grant, the State contributed 75 percent of the total project cost ($2,793,000) with remaining 25 percent ($931,048) paid from the Carson City Open Space funds. The funding agreement required the City to enter into a Nonrevocable Agreement to Restrict Property that was recorded and runs with the property in perpetuity.

The authorized uses for the property are defined as follows:

• The Property will be used only for open space purposes that are consistent with the objectives for which the Property is acquired and the local jurisdictions’ adopted open space plan. 
• The Grantee further agrees that the property will be used for ranching and purposes that are consistent with the protection or enhancement of wildlife habitat, protection of sensitive or unique vegetation, protection of historic or cultural resources, protection of riparian corridors, floodplains, or wetlands and/or to protect or preserve the benefits of the Property or natural resources within the State for the public.

Carson City, through its Open Space Advisory Committee and Department of Parks, Recreation and Open Space identified the Jarrard property as one of the most environmentally sensitive open space projects in the City due to its large presence of wetlands along the western edge as well as the riparian zones along the Carson River. Open Space identified preservation of the scenic pastoral landscape as a break from the urban development as a primary goal of the acquisition. The active ranching operation was also cited as having historic and cultural significance as it is one of the few remaining operations in the area.

Open Space believes that the proposed 100-acre hemp project would directly interfere with the City’s planned use of the property, the goals identified in the grant application, and the intent in which the land was acquired. The hemp project would fundamentally alter the nature and landscape of the property by converting 65 acres of pasture utilized for grazing and 35 acres of alfalfa to hemp. This would profoundly change the scenic views currently available while negatively impacting wildlife on the property.”

Nevada city hemp lawsuit: Two more parties must be added to the suit for Tahoe Hemp to proceed

Various questions will now proceed to trial, such as the topic of potentially permitting hemp growing as a means of boosting Carson City’s economy. This has proved to be the case in various U.S. cities, states and territories, where hemp plants are commonly grown for the production of CBD (cannabidiol). According to projections from Brightfield Group, the U.S. hemp-derived CBD market will soar to $23.7 billion by 2023.

Based on the details of the April 17 order, Tahoe Hemp must add two additional parties to the suit if it wishes to move forwards. Those parties should be Nevada State Lands and Jimmie Peter Jarrad Children’s Trust; the latter of which is the previous owner’s family trust.

District Attorney Jason Woodbury says that, in the event the lawsuit is amended by the plaintiff, a response must be provided by the city and the state within a 45-day window.