Sandpoint business owner files tort against city of Sandpoint

By Ben Olson
Reader Staff

A Sandpoint business owner has filed a tort claim against the city of Sandpoint five months after a police raid on her business has yet to result in criminal charges. 

The tort involves an incident with Sandpoint Chocolate Co. owner Julie Breuer, alleging Sandpoint police raided her chocolate factory on Sept. 9, 2023 after what the filing describes as a “disgruntled” ex-manager gave the police a tip that Breuer had laced her chocolate bars with marijuana and cocaine, as well as allegations of “sex trafficking children.” 

Breuer flatly denies the claims.

Sandpoint Police raided the Sandpoint Chocolate Co. factory on Lake Street on Sept. 9, 2023. Photo courtesy of the tort claim filed by Davillier Law Group.

“We had terminated an employee that was stealing from us,” Breuer told the Reader. “Three hours after we terminated him, we got raided by the police.”

The complaint, filed by Breuer’s attorneys at Davillier Law Group, names the city of Sandpoint, the Sandpoint Police Department, SPD Chief Corey Coon and three Sandpoint police officers as defendants, as well as several “John and Jane Does.”

Sandpoint Chocolate Co. sells novelty chocolate bars to regional stores, with varieties decorated with candy toppings, fruit, cookies and other confections. 

Breuer said she learned the chocolate-making trade after living in Hawaii and discovering kava, an extract made from the ground roots of a tropical plant historically taken as a drink or supplement to relieve anxiety.

After moving to Sandpoint in 2004 and returning to raise her children several years later, Breuer said her mother was diagnosed with cancer.

“It was a terminal diagnosis,” she said. “I felt really hopeless, and when you can only go so far with doctors, you take to the internet.”

Breuer said she researched cannabidiol, or CBD, which is derived from hemp. CBD is different from tetrahydrocannabinol, or THC, which is the chemical in cannabis, which produces a high when ingested. CBD contains only trace amounts of THC and does not result in a high.

“I was able to secure some CBD out of Colorado,” she said. “I gave it to her and four months later, she scanned clear of any cancer.”

While she acknowledged that her mother’s situation might not always happen for everyone who uses CBD, Breuer said she “believe[s] in CBD and its natural healing properties.”

In April 2023, Breuer said she met with city of Sandpoint officials to discuss steps to employ in order to begin manufacturing chocolate within city limits. After meeting with city employees, she “received a list of items to complete to procure her change of use permit to operate light manufacturing,” out of the Lake Street facility, according to the complaint. At issue were several points to satisfy before the city would issue a business permit, which included establishing a retail space, as well as paving the parking lot — improvements Breuer said she supported.

“We had a conditional use permit,” Breuer said. “We asked them, ‘Can we still make chocolate, since it’s going to take a while to build out, pave the lot, etc. to get the retail store built?’ They said, ‘Absolutely.’ We were making chocolate all summer. We were selling it in Winter Ridge and other stores all over town.”

Along with novelty bars, Breuer began a medicinal line of chocolates, manufacturing bars with kava and CBD derived from industrial hemp.

The 2018 Farm Bill removed industrial hemp from schedule I of the Controlled Substances Act — which is the same type of hemp Breuer claims she uses in her CBD derivatives. The bill defines “industrial hemp” as cannabis that does not contain more than 0.3% of THC on a dry weight basis.

In 2021, Idaho became the 50th state in the nation to legalize hemp after enacting the Industrial Hemp Research and Development Act, which allows the cultivation and sale of hemp with THC not exceeding 0.3%.

Meanwhile, Idaho is one of only four states in the U.S. where marijuana remains fully illegal, along with Wyoming, Nebraska and South Carolina — all others have either permitted recreational use, medicinal use or have decriminalized possession.

“If you read the Idaho statutes, you’re allowed to have 0.3% or less of THC in any hemp product,” Breuer said. “I haven’t broken any laws.”

The raid

Sandpoint Chocolate Co. owner Julie Breuer and daughter Gracie in their Sandpoint factory. Photo by Ben Olson.

On the morning of Sept. 9, 2023, Breuer said she and her then-business partner Brandon Miller terminated an employee.

After clearing the apartment and leaving the facility, Breuer and her employees began to salvage a chocolate pour already in progress. Meanwhile, according to the complaint, the ex-employee contacted the Sandpoint Police Department with claims that Breuer was making “‘weed chocolate bars’ from a massive grow operation, was putting ‘cocaine in chocolate bars’ and was ‘sex trafficking children.’” A search warrant for the factory was signed by a magistrate judge that same day.

Breuer told the Reader it was sometime in the early afternoon of Sept. 9, when four Sandpoint police officers raided her factory.

“They came into our facility without knocking, with guns drawn, wearing tactical gear,” she said. “They handcuffed me, my business partner and a 16-year-old employee; tore our facility apart; and confiscated a whole bunch of our stuff.”

Breuer and Miller were handcuffed and placed in the backseat of a police vehicle for about an hour as the police seized cell phones, three laptops, three Visa cards, multiple large plastic containers and totes filled with chocolate and ingredients, as well as 148 boxes of retail chocolate ready for shipping.

“They finally let us go because they couldn’t find anything to charge us with,” Breuer said, but added that the police warned her if any THC showed up in the bars, she would be charged with the “full weight of the chocolate,” claiming that could result in a five-year prison sentence.

“I told them we didn’t have any THC in the chocolate,” she said. “We always get lab reports on everything we have; and, immediately after, we sent chocolate bars to two of the premier cannabis labs in California … our bars came in way under the legal limit. The THC is so minuscule it shows up as ‘non-detected’ on the lab report.”

Breuer declined to share the lab report with the Reader on advice from her attorney. 

A few days later, Breuer contends the city of Sandpoint “retaliated” against her business with the arrival of a letter under the door of her factory, which stated she was not permitted to operate her business within city limits.

Now, more than five months after the raid, Breuer is frustrated because she has yet to be charged with a crime, she’s unable to conduct business and her property has yet to be returned.

“It took us two days to get back results from the lab on our bars, yet it’s been more than five months now and still they don’t have an answer,” Breuer said.

Bonner County Deputy Prosecuting Attorney Katie Sherritt told the Reader she’ll likely be assigned the case if charges are filed.

“I can offer that in general the Idaho State Police can only test for the presence of THC,” Sherritt wrote to the Reader. “Once an item has tested positive for THC it has to be sent to a private lab out of state to determine the concentration of THC in the item and that can take a fairly significant amount of time.”

Sherritt declined to comment further on the case since it is still an open investigation.

Sandpoint police denied a public records request for the police report, also stating it was an open investigation. 

Sandpoint Mayor Jeremy Grimm provided a statement to the Reader, though the raid took place before his term began in January 2024. Former Sandpoint Mayor Shelby Rognstad did not respond to a request for comment.

“The alleged activity may represent one or more felony violations including those outlined in Idaho Code 37-2732,” Grimm wrote. “As such, our professional law enforcement personnel are not rushing to judgment and have engaged with an independent testing laboratory to verify what was found on the premises.”

Grimm said the “process takes time, and we are moving as quickly as possible to bring the situation to its rightful conclusion.”

A close-up of some of the varieties of novelty chocolate bars in the Sandpoint Chocolate line.
Photo by Ben Olson.

In answer to Breuer’s claims that the city “retaliated” against her by denying a business license, Grimm wrote, “No license had been issued due to significant land use-related compliance issues.”

Grimm included correspondence between Breuer and Sandpoint City Planner Amy Tweeten after the police raid, the latter informing Breuer that she was unable to continue operating the factory until multiple issues were resolved, including establishing a retail space and paving the parking lot.

“Although the timing of the independent events overlaps, the criminal investigation is entirely separate from the land use, building and business licensing matters,” Grimm wrote. “The city does not retaliate against business owners.”

Along with products seized in the raid, Breuer said the future of her business is in limbo. Most of the raw ingredients used to make chocolate are no longer suitable for sale, and she claims to have lost numerous contracts with customers she had obtained through “decades of hard work.”

The tort alleges 13 separate violations against the defendants, which include unlawful search and seizure, excessive force, retaliation, false imprisonment and others.

A notice of tort claim, emailed to the Reader on Feb. 7 from Breuer, concluded with a claim for “amounts that exceed” $5 million, stemming from “a proximate result of the above referenced actions and inactions” of the respondent — that is, the city of Sandpoint. 

That document was dated Jan. 30. However, in the subsequent official filing, dated Feb. 21, the tort contained no dollar amount. Rather, Breuer requested compensatory damages as restitution for the costs associated with the destruction of her property, for loss of business contracts and income, for humiliation and emotional distress, and attorneys fees, as well as a declaratory relief requiring defendants to update training, policies and procedures.

Despite the setbacks and legal peril, Breuer said she’s continuing to fight.

“Nowhere in Idaho statutes does it say I broke any laws,” she said. “I’m not going anywhere. Sandpoint is my home, it’s where I’ve raised my kids. They’re not going to run me out of town.”