A bitter contract dispute in federal court is shining an unflattering spotlight on a booming, under-regulated corner of America’s hemp industry — a gray-market economy built on synthetic cannabinoids, deceptive labeling, illicit cannabis masquerading as hemp, and overseas chemical sourcing. It’s a lucrative scheme that critics say exploits a legal loophole Congress unintentionally left open in the 2018 Farm Bill.
At the center of the legal storm is Asterra Labs LLC, a North Carolina-based manufacturer of hemp-derived products, and a Texas-Colorado conglomerate of businesses — MC Botanicals LLC and MC Nutraceuticals LLC.
MC Botanicals LLC and MC Nutraceuticals LLC, run by father-son duo Bret Worley and Jeffrey Worley, have alleged in a North Carolina District Court that Asterra is attempting to extort the company for more than $1.6 million. But Asterra Labs, run by North Carolina State Rep. John Bell (R) and funded by Rise Capital, have filed a counter claim leveling wild accusations against the Worleys’ network of companies.
The case, MC Botanicals LLC et al v. Asterra Labs LLC et al, is pending in the U.S. District Court for the Eastern District of North Carolina (Case No. 5:25-cv-00400). While the civil claims center on unpaid invoices and broken contracts, Asterra’s counterclaims read like a federal indictment, alleging racketeering, wire fraud, customs evasion, and a calculated effort to exploit what industry insiders have long called the “hemp loophole.”
The counterclaim accuses the Worley’s of orchestrating a scheme that defrauded vendors, misled consumers, and imported potentially unsafe Chinese-made synthetic cannabinoids to fuel a nationwide arbitrage model. Importantly, however, the legal filing is short on the kind of evidence to substantiate all of these claims that would be required in a criminal case. For example, the allegation that the MC companies have sourced ingredients from China is merely asserted within the counter claim without the kind of evidence that would accompany a federal indictment for the conduct alleged by Asterra.
See below: Excerpts from Asterra’s counterclaim alleging MC Botanicals LLC and MC Nutraceuticals LLC illegally imported and distributed Chinese-sourced cannananoids.
Asterra’s allegations, if true, point to a vast network of dodgy products being marketed and sold across the U.S. under the guise of consumable, non-intoxicating hemp, but which are in fact synthetic intoxicants produced, in some cases, in labs based in China.
To put that in plain English: sketchy chemicals from mysterious Chinese labs are being purchased, eaten, smoked, and vaped by consumers who know the right place to shop for hemp that’s more than hemp. Because these mind-altering drugs are sold, at least according to the packaging, as hemp, they are available at convenience stores, gas stations, and head shops, often times with minimal ID checks and always with zero regulatory oversight. Regardless of the dispute between the two companies, the underlying grey-market company for sketchy intoxicating products marketed as hemps indisputably exists, is unregulated, and business is booming through the U.S., including here in Maine.
Multiple independent journalists, often operating under pseudonyms online, as well as a recent investigation by the Philadelphia Inquirer, have tested products marketed as hemp and found that, in addition to banned substances like pesticides and heavy metals, the products are typical strong enough to qualify as regular cannabis as opposed to hemp.
For readers who think this obscure lawsuit has little bearing on Maine, guess again.
Even though adult-use and medicinal cannabis products are broadly available in Maine, hemp-based products laced with synthetic cannabinoids are even more widely available in the state thanks to a little known loophole that allows for their unregulated sale. Those products include these pre-rolled hemp cigarettes purchased by this reporter just this week in downtown Lewiston.
These product images are used merely to demonstrate the appearance and availability of THC-P products in Maine convenience stores. The Maine Wire has not tested (or smoked) the pictured product and has no reason to believe it is improperly marketed. However, it was purchased without ID at a convenience store…
The cannabis adjacent gray-market includes multiple products, such as THC-P, THCa, delta-8 THC, delta-10 THC, hemp-derived delta-9 THC, and other intoxicating substances that give users a high similar to the cannabis your grandparents used to smoke, but it’s just different enough to qualify as legal under state and federal law. That means it’s far more accessible, including to individuals under the age of 21, than traditional cannabis products sold through tightly regulated medicinal and adult-use recreational cannabis shops in Maine.
The Farm Bill Loophole That Opened Pandora’s Box
The cannabis plant comes in three varieties. There’s cannabis sativa and cannabis indica, the species most commonly associated with the drugs that get users high. But the third species within the genus, cannabis ruderalis, is better known as hemp. While hemp has a lot in common chemically with the intoxicating plants, it has low levels of Delta-9 THC, the main psychoactive ingredient, and it also has some legitimate uses as an industrial product. For these reasons, some Members of Congress, notably Republican U.S. Sens. Mitch McConnell and Rand Paul of Kentucky, banded together to legalize the cultivation and sale of hemp as part of a 2018 omnibus bill known colloquially as the Farm Bill.
In so doing, Congress created a galaxy-sized loophole that less-than-scrupulous entrepreneurs have maximally exploited to sell dodgy intoxicating substances at gas stations, tobacco shops, and head shops across the U.S. At every point in the supply chain — from grower, to trafficker, to seller, to user — everyone knows that the substance in question is what the average person would recognize as weed, pot, ganja, or marijuana, but since everyone is either making money or getting high, everyone just pretends the substance is actually legal hemp. In some cases, it is legal hemp — but hemp that has been adulterated with a legal and little known substance (THC-P) that can be synthesized from hemp-derived CBD oil or synthesized completely from raw chemical ingredients.
The 2018 Farm Bill, complete with the massive Hemp Loophole, passed with bipartisan support. Officially, it was The Agriculture Improvement Act of 2018 (Public Law 115-334), and every member of Maine’s congressional delegation backed the proposal. Under the law, hemp products containing less than 0.3 percent delta-9 THC could legally be grown and sold over state lines without any of the baggage that comes with state-level cannabis sales, such as restrictions of banking, insurance, and inter-state commerce. What lawmakers didn’t foresee was that manufacturers would begin synthetically producing alternative cannabinoids like delta-8 THC, THC-P, and now so-called “THC-C” — many of which are derived from hemp but have intoxicating effects equal to or exceeding that of marijuana. In some cases, even delta-9 THC is being synthesized from hemp plants and sold commercially at convenience stores and gas stations across Maine with none of the regulatory or tax barriers associated with traditional cannabis.
The hemp-derived THC is chemically identical to the THC derived from cannabis sativa or cannabis indica, but it’s regulated in a totally different manner. To use an analogy, it would be like regulating alcohol based on the plant matter its fermented from, with potato derived vodka available at every 7-11 and Dysarts, while corn-derived whiskey was strictly limited to agency liquor stores. If that sounds like a confusing way to regulate any product, let alone mind altering drugs, then welcome to the struggle that law-abiding cannabis business owners in Maine, and across the country, have been fighting since 2018.
Asterra’s Explosive Allegations: Fraud, Extortion, and Chinese Imports
According to Asterra’s court filings, companies like MC Nutraceuticals have built a business model around these synthetic cannabinoids that are sold on the backs of hemp-based or hemp-derived products. But instead of manufacturing in the U.S., they allegedly source bulk cannabinoids from China — including compounds like THCP — and skirt federal tariffs by breaking shipments into smaller parcels and mislabeling them to exploit the “de minimis” exception under U.S. customs law.
“These products are sprayed onto hemp flower or used in vape cartridges and then passed off as compliant hemp,” Asterra alleges in its 88-page counterclaim, which outlines a sweeping scheme involving shell companies, fraudulent wire transfers, and criminal extortion tactics.
Asterra paints MC Botanicals and MC Nutraceuticals as an enterprise operated by Bret and Jeff Worley — a father-son duo who allegedly used overlapping companies to hide financial distress while securing more than $1.6 million in products on credit. When Asterra demanded payment, the Worleys allegedly responded with false wire transfer confirmations and then filed suit in retaliation to stall collection efforts.
But the most damning allegations extend beyond unpaid bills.
Asterra accuses the Worleys of importing cannabinoids from China using a company called Hau Processing, which allegedly helped disguise the contents of shipments to avoid U.S. tariffs. Some products were sourced from Shanghai Minstar Chemical Co. Ltd., a Chinese supplier, and sold domestically under false claims of being American-made — a violation of federal labeling and safety laws, the complaint says.
According to publicly available information about Shanghai Minstar Chemical Co. Ltd., the company is located in Pudong, Shanghai, China, and specializes in the production of chemicals, many of which are involved in both legitimate and illegitimate U.S. drugs. Although there’s no direct evidence that the company is involved in the production of fentanyl precursors, there is some publicly available information that shows the company is involved in producing chemicals that are used in synthesizing controlled substances, as well as cannabis analogs.
The suit further alleges that the imported synthetic cannabis-like drugs — sold under the guise of legal hemp — were never transformed or safety-tested in the U.S. before being sold in gummies, vapes, and other consumable products.
Asterra isn’t the only victim, the lawsuit contends.
The complaint lists multiple companies across the country, including JL Processing in Tennessee, BioVivo Sciences in Indiana, and Atlantic Global Supply in North Carolina. The suit notes that those enterprises have filed separate breach-of-contract lawsuits against the Worley-run companies, citing unpaid debts and deceptive business practices.
In one instance, Asterra claims the Worleys threatened a former employee with a false report to his probation officer unless he returned to work and publicly apologized for quitting. The employee, fearing jail, complied.
“This is a coordinated, nationwide scheme built on deception, intimidation, and fraud,” the suit claims.
Asterra is seeking more than $1.6 million in damages, plus punitive and treble damages under both federal and state RICO statutes. They also want the corporate veils of the Worley companies pierced, arguing the entire operation is a “Ponzi-like” structure meant to defraud suppliers.
MC Botanicals and MC Nutraceuticals deny wrongdoing and have accused Asterra of breach of contract and trade secret theft. But the tide may be turning, as Asterra’s filings suggest federal prosecutors have been notified of the alleged criminal conduct.
Adding yet another layer of intrigue to the unresolved legal dispute between Asterra and MC Botanicals/MC Nutraceuticals is Bret Worley’s high-level relationship to President Donald Trump’s White House vis-a-vis his romantic relationship with Caroline Wiles, the daughter of Trump’s highly regarded Chief of Staff Susie Wiles.
The entire story has, to date, been confined to niche cannabis publications and discussions on social media, but the pseudonymous poster @TheDankInformer has fastidiously documented Worley’s connections to the Wiles family, including social media posts that show Worley posing alongside the top-ranking Trump administration official.
According to The Dank Informer’s origin story, he started a personal crusade against sketchy hemp-based intoxicants after he was, in his own telling, poisoned by a dodgy hemp-derived gummy and soon after had acquaintances and family members who were hospitalized with symptoms they attributed to synthetic cannabinoids.
In a May 31 social media post, which included screen-captured pics of the White House taken from Caroline Wiles Instagram, The Dank Informer wrote, “THE KING OF GAS STATION WEED”HAS ENTERED THE WHITE HOUSE.” Whether Worley has had any actual access to White House policymaking is the realm of Internet speculation, though The Dank Informer has proven a more diligent and reliable source of industry information than many industry-backed bloggers with Forbes bylines. Officially, the Trump Administration has taken limited actions on cannabis, hemp, and marijuana re-classification, with the process largely characterized by delays, omissions from priority lists, and indirect policy moves.
Intoxicating Hemp vs Legal Cannabis
Economically, the hemp-derived intoxicants present yet another threat to the legal, law-abiding cannabis industry, which is already struggling under the burden of high taxes, expensive regulatory compliance costs, soaring energy costs, and competition from international drug cartels. In the market for products that’ll get you high, dodgy hemp products can be produced cheaper and be sold more easily than traditional cannabis.
There’s another major benefit that intoxicating hemp has over traditional adult-use and medicinal cannabis: access to mainstream financial systems.
Currently, law abiding cannabis companies are forced to rely on cash transactions and smaller, state-specific banking institutions. Often times, they face debanking and time-consuming struggles finding insurers due to the federal illegality of their business. The purveyors of these gray-market cannabis-adjacent substances, however, have unhampered access to traditional financial systems, like Visa, Square, and major American banks. That means the profits from intoxicating hemp substances — or good ole fashion cannabis masquerading as intoxicating hemp — can be laundered into the traditional financial system alongside Monster Energy Drinks, Newport cigarettes, Haribo gummy bears, and whatever else might be for sale at the local corner store.
If proven true, the case could become a landmark moment for exposing the dark underbelly of the hemp industry — and a wake-up call for regulators who underestimated what a “non-intoxicating” loophole could unleash.
Regardless, the entire Hemp Loophole racket may be closing faster than any court will resolve the dispute between the two companies.
According to an article in Politico Pro, a group of U.S. Senators have reached an agreement that would strip certain hemp-related language from the latest version of the semi-annual agriculture funding bill.
Although McConnell and Paul are widely regarded as being responsible for creating the loophole in the first place, only McConnell is onboard with closing it up, with Paul reportedly threatening to block passage of the appropriations bill entirely if the hemp loophole language is stripped.
