Top: Inside of the Isotex facility located at the Kootenai Business Park in Libby on Friday, Jan. 24 after equipment and products were removed. Photo by Tracy McNew, The Montanian. Bottom: Bales of hemp presumably moved from the former Isotex facility to a field on Parmenter Creek Rd. Photo by Zach McNew, The Montanian.
By Tracy McNew
On Thursday, Jan. 23, Byron Gruber, attorney for Isotex Health, LLC, issued a press release stating, in part, that “Isotex will no longer remain silent. Isotex has gathered evidence exposing a conspiracy aimed at taking-over the company. As such, Isotex began filing lawsuits today in Lincoln County, Montana against these conspiring investors, contractors, and their in-state associates.”
Isotex, a startup company from Texas, in early 2019 had been obtaining investors to develop a large scale Montana-based CBD production company. In August 2019, they posted on their Facebook page, “The beginning of Isotex! 13,500 acres of Licensed and Registered Industrial Seed and Hemp planted in Northeast and Southeast MT…” The hemp was to be processed for extraction of CBD and the left over fibers would be sold to other companies. A few months later, in October, Isotex moved into the old Stinger Welding building at the Kootenai Business Park in Libby with much hopeful anticipation for positive economic impacts from locals. Isotex held a job fair at Libby’s Job Service on Oct. 4 when Jason Cross and others representing the company conducted onsite interviews with the intention of hiring over 100 employees for their newly acquired facility. Subsequently, some employees were hired and equipment installation began, hemp was harvested and delivered to the facility, and it appeared that the new business was off to a good start.
On Friday however, the building that has housed Isotex was empty when The Montanian visited to follow-up regarding their press release. The building, which is privately owned, was open however and Carson Byers, who identified himself as “a representative of Danny Brown and DBA Investments,” greeted The Montanian. He said, “Isotex is no longer here, they were evicted yesterday.”
DBA Investments, along with Real Estate Investment 2019 (REI) are Louisiana-based companies owned by Danny Brown who invested in Isotex and purchased the building then leasing it to Isotex.
Byers went on to say that Brown is going to attempt to right the ship and get things back on track. Byers is identified as a former Isotex employee on court documents.
Gruber, representing Isotex, said something similar in an email. “The company (Isotex) has,” he wrote, “always envisioned a business operation that would greatly utilize a workforce comprised of hardworking men and women from Libby and its surrounding communities. The company will continue to fight to make its company vision a reality.”
Both parties pointed out that due to pending litigation, much of what is happening cannot be discussed but it appears clear at this point that locals will not have jobs at Isotex;s CBD production facility anytime soon.
Tina Oliphant of the Lincoln County Port Authority told The Montanian that there is no financial relationship between Isotex or DBA Investments and the Port, so no information is available to them. “The building sale,” Oliphant said, “was a private sale with Fisher Industries.” She also said that the county didn’t invest any money in bringing Isotex to town. “We do hope this gets worked out because this industry has great potential and it would be truly beneficial to see that building asset used for productive economic development,” said Oliphant.
Based on court documents, it appears that Isotex is involved in two separate court cases locally. One regarding their hemp seed purchase, a nearly $13 million deal, and another regarding the building and other assets.
Gary Crossman of Crossman Farms, LLC of Shedd, Ore. sold the seeds to Isotex. A complaint was filed in November alleging that seeds were provided but not fully paid for, so a crop lien was requested. An Isotex counterclaim was made later and provided along with the company’s Friday press release. Related to the concern over seeds and payment, some seeds may have been stored in a facility in Eureka, and Isotex filed a complaint for damages relating to that storage facility on Nov. 25. A non-jury trial was set for this case on Jul. 22, 2020 at 9:30 a.m. with a pre-trial hearing on June 17 at 8:30 a.m. per judge Cuffe’s Jan. 22 order.
In addition, Judge Cuffe also ordered no removal of property from Isotex’s Kootenai Business Park facility and other local storage locations last week after it was noted that property was being relocated following the termination of Isotex’s building lease on Jan. 6.
REI and Kootenai Tec terminated Isotex’s building lease due to non-payment or breach of contract, however Isotex documents allege that REI did not provide the loaned money that was promised to them. Their counterclaim states, in part, that “Daniel Brown and REI intentionally withheld the additional money owed under the Promissory Note, which delayed harvesting, prevented Isotex from obtaining harvested hemp from the farm fields, and has constrained Isotex’s ability to process hemp.”
The dryers and hemp processing line were never completed at the building. The entities REI, Kootenai, and SMGB claimed breaches of contract against Isotex, including the building lease.
Isotex counterclaims further state that “Conduct of the Conspiring Parties were orchestrated to systematically interfere with Isotex’s business operations, relationships and opportunities, in an attempt to cause Isotex to breach its various contracts with REI, Kootenai and SMGB, LLC, with the end goal of forcing Isotex into insolvency and taking over Isotex’s business operations.”
An Order granting a temporary restraining order and setting an expedited briefing schedule and hearing on the motion for preliminary injunction was signed by Judge Cuffe on Jan. 23. A hearing will be held on Feb. 5 at 2 p.m for two hours with each party getting equal time.
LC SnoKats Fun Run this weekend
By Brian Baxter
On Saturday, Feb. 1, the Lincoln County SnoKats Club will be holding their annual fun run beginning at 7 a.m. and running until 10 p.m. Join them for a great day of snowmobiling, fun, food, and winter enjoyment. All snowmobilers and tracked vehicles are welcome. The meeting destination is the 17 mile marker on Pipe Creek Road. From Libby, take highway 37 north across the Kootenai River bridge, make the second left onto Pipe Creek Road, and follow it for 17 miles to Seventeen Mile Creek Road (#471). Follow the signs from there for parking and registration. There will also be free lunch offered from 11 a.m. until 1 p.m. at the warming hut.
Pre-registration will be held on Friday, Jan. 31 between 6 and 9 p.m. at the Pastime Bar located at 216 Mineral Ave. in Libby. Visit www.lcsnokat club.com or email info@LCSnoKatClub for more information.
After a day of snowmobiling on the first of February, meet the group back in Libby at the V.F.W. for dinner. Tickets can be purchased at Northwest Motor Sports, Dream Marine, Montana Power Products, or from any member of the club. The dinner, raffle, and auction will begin at 5 p.m. at the Veterans of Foreign Wars Post 1548 located at 114 West 2nd Street in Libby.
There will be lots of raffles for everyone, and the SnoKats will be auctioning off some fantastic items including gun and grill raffles. Guns include a Browning AB3 – 6.5 cal. Creedmoor rifle, and a Remington 200th Commemorative 870 – 12 guage shotgun. There will also be a raffle prize of a Traeger PRO 575 freestanding grill with a front shelf, and some items for the kids.
During the month of January, Cabinet Mountain Brewery will be hosting their Brews for Benefits event every Thursday evening from 6 until 8 p.m. for the Lincoln County SnoKats Club.
New federal ruling on e-cigarettes, Pop’s Vapor Shop to close
By Mckenzie Williams
For years the e-cigarette market has run without Food and Drug Administration (FDA) approval. In May that will all come to an end thanks to a Federal Judge ruling issued on Jan. 2. According to their website, the FDA has constructed a comprehensive plan with an already shortened deadline.
As of Aug. 2016, all e-cigarettes were subject to the approval process, but no action was ever made. E-cigarette makers will have to submit applications for market approval. The FDA previously configured an Aug. 2022 deadline for companies to submit applications which would include why they should be able to keep selling e-cigarette products. Success on this application will mainly depend on a company’s ability to prove its e-cigarette products provide more public health benefit than harm. All applications have to be submitted by May, 12.
This is nothing like the 120-day flavor ban which went into effect Dec. 18 and remains in effect in Montana. This new action will effectively be a nationwide shut down of sales. All companies were Federally ordered to remove all flavored e-cigarette cartridges from the market. Tobacco or menthol flavored cartridges are still allowed. After May 12, no un-approved vaping product nor accessories will be legal for sale.
The main reason for this recent, sudden, and lengthy approval process through the FDA is the youth smoking epidemic, which in part, caused the original flavor ban.
FDA’s website reads, “FDA and CDC released findings from the 2019 National Youth Tobacco Survey. The results show disturbing rates of e-cigarette use among both middle and high school students in 2019, with more than 5 million youth reporting having used e-cigarettes in the past 30 days and nearly one million reporting daily use. While cigarette smoking is at an all-time low among high school students, increases in e-cigarette use have reversed progress made in the decline of overall youth tobacco use.”
The ruling does keep the door open for the sale of flavored cartridges in the future, with the FDA going so far as to specify that this is “not a ‘ban’ on flavored or cartridge-based ENDS.”
The FDA says that it is already considering applications from companies for flavored e-cigarette products through its tobacco approval pathway. If the agency signs off, those products can then be sold legally.
As of right now, it remains un-clear if possessing an unapproved e-cigarette item or using one will be against the law.
Unfortunately this process will cause the end to locally owed and operated business, Pop’s Vapor Shop that bases there sales on e- cigarette products and CBD. The Libby business which has been open for about six years will close its doors on Friday, March 13.
An employee of Pop’s Vapor Shop said, “It is sad to see so many people come in every day and tell me their story. They have been vaping for years and it has done them good. Many have said they will go back to smoking, many!”
The flavor ban had affected about 70 percent of Pop’s sales, and it is unclear what kind of effect the new federal ruling would have. Pop’s Vapor Shop will remain open Monday through Saturday, 9 a.m. until 1 p.m. until March 13. They are located at 513 Mineral Ave. in Libby. You can also reach them by calling 334-5027.