There's only one species of opium poppy that's considered a controlled substance, "papaver somniferum l.," to be exact. "The "l." stands for "lactatum." And the Jim Hogshire case resulted in his acquittal because the prosecutor could not prove beyond a reasonable doubt that the dried poppy pods that Jim Hogshire bought from a florist shop and were in his possession were in fact that exact same species.
There are numerous species of opium poppy that contain some amount of opium akaloids. All the other species are 100% legal, in and of themselves (absent the extraction or concentration of morphine, etc., from them).
Maybe this seller was *claiming* to be selling the somnifierum variety. If so, yes, it was a stupid thing to do, because that would be advertising the sale of a C-II substance in a large public marketplace. But maybe they were just being sold as "poppy pods" with no claim that they were papaver somnifierum. To the letter of the law, that is not illegal. It's only illegal if actual p. somniferum is being sold. The burden of proof to prove the actual species is on the government. Maybe there have been advances in genetic technology since Hogshire's trial that would help determine the species. Four years ago, we did not have that technology. In any case, it should be an interesting federal trial to follow if anyone is near Sacramento or San Francisco ... wherever they hold the trial.
BTW, the last time i checked (which was a few years ago) you could go to most any seed company's catalog and find the seed company openly offering the means to produce a C-II substance: that is, "seeds of papaver somniferum." And the way the law is written, the only parts of the plant that is not a controlled substance are its seeds and roots. So, all those seed companies were accessories to a felony for anyone who bought those seds and grew the plants.
There's a popular misconception that the opium poppy law makes some kind of exemption for ornamental uses. Not so. Anyone who thinks otherwise should try to find it at www.gpo.gov or www.findlaw.com. It's not there. Until Jim Hogshire's "Opium for the Masses" book, cops could not be be bothered to track down (and pull up) poppy flowers. Heck, in my city, they are grown every year in gardens on state and city land. Still!
BTW, dried poppy pods used to be very easy to find, with sellers importing them from Canada and The Netherlands. It's been at least three years since i followed that little subculture. I'll bet this story will shake up a lot of people at http://www.poppies.org/