Wisconsin hemp grower sues for Illinois hemp dryer’s alleged fire damage and resulting loss to hemp crop intended for CBD extraction. Bonus: docs include a hemp growing and storage contract.

Hemp producer (and CBD extractor) Lake Country Growers filed an action against a company it contracted with for hemp drying and storage services alleging the 84,000 wet pounds of hemp they delivered alleging that a problem with a hemp dryer caused a fire that resulted in approximately $1.3 Million in crop losses.

The complaint tells the story asserted by the hemp grower, delineating the issues arising after they delivered the hemp and drying began:

• Approximately two weeks into the operation of the industrial dryer, pipes began to smoke and embers were coming out of the conveyer of the dryer.
• Despite warning and knowledge that the industrial dryer was not functioning properly, Moest nonetheless continued to utilize the dryer on Lake Country’s hemp product.
• On Thanksgiving morning, November 28, 2019, a fire occurred at Moest’s [the dryer] farm at 11113 North Christian Hollow Road, Winslow, Illinois.
• Upon information and belief, the fire occurred after an ember from the industrial dryer landed in a bag of Lake Country’s hemp product.
• After approximately four to five days, the ember caused the bag of hemp to catch on fire.
• Over the course of several hours, the fire destroyed 30 bags of Lake Country’s dried hemp product.
• In addition to the hemp product that was lost in the fire, an additional 18 bags of Lake Country’s dried hemp product, was, upon information and belief, smoke-damaged and further contaminated by residue and charred materials depositing into the hemp during the drying process.
• On January 25, 2020, a representative of Lake Country went to Moest’s farm to pick up the remaining bales of untreated hemp product and to collect samples for testing from the 18 bags of contaminated hemp product to determine whether the product was salvageable. When the representative of Lake Country went to collect the samples, he was told by a representative of Moest that Moest had destroyed the 18 bags of contaminated hemp product.

In addition to suing the drying company for breach of contract, negligence, and bailment, the complaint makes particular reference to the company that the plaintiff believes sold and installed the dryer, Innovative Environmental Companies, Inc., a company specializing in hemp and other agricultural drying technology. This could mean that additional parties may be joined.

Reminder: This is the perfect scenario to remind everyone that including insurance limits that actually reflect the potential loss in the economic exchange in your hemp drying/supply/storage agreements are important. Here, the loss allegedly exceeds the limits the dryer was contractually obligated to obtain, so if a full recovery at that level is anticipated, insurance might not be available for all of it. 

You can find the complaint that the hemp farmer filed here along with the attendant exhibits that include a copy of the hemp drying and storage contract.