The battle against hemp-derived cannabinoids (HDCs) certainly got hotter this year as several more states passed laws to regulate them, and hemp companies pushed back in courts. Meanwhile, language that would ban virtually all hemp-derived THC, and potentially even CBD, in consumable products has made it into two significant federal agriculture bills.
The Republican-led House Agriculture Committee in May approved the draft Farm, Food and National Security Act of 2024, better known as the Farm Bill (HR 8467). Hemp industry advocates were seemingly caught off guard when an amendment by Rep. Mary Miller was included. It would change the definition of legal industrial hemp to contain no more than 0.3% total THC, rather than just delta-9.
It also excludes “cannabinoids that are not capable of being naturally produced by a Cannabis sativa L. plant” and naturally occurring cannabinoids that “were synthesized or manufactured outside the plant.”
The language would hit the multi-billion-dollar HDC market hard as many products currently sold at common retail outlets contain delta-8 THC and delta-9 THC derived from delta-8 and THCA.
Miller, in a May 24 press release, said she was “proud my amendment was included to close the loophole that has allowed drug-infused THC products like Delta-8 to be sold to teenagers in packaging that looks like candy. We must stop teenagers and children from being exposed to addictive and harmful drugs.”
Jonathan Miller, general counsel for the U.S. Hemp Roundtable, called the amendment “existential threat to the industry.”
He said the language would ban 90% to 95% of ingestible hemp products currently in the marketplace, including non-intoxicating CBD product because most CBD products have a little bit of THC.
He said that over the last six years, hemp farmers have developed plant varietals designed around the delta-9 limit, so the total THC definition would make most hemp non-compliant.
“It would be a complete disaster for the industry,” he said.
The new hemp definition was also added to a draft appropriations bill for Agriculture, Rural Development, FDA and related agencies (HR 9027).
However, a Committee on Appropriations report included language added by Rep. Dan Newhouse, R-Wash., that “directs the FDA to evaluate the public health and safety implications of ingestible, inhalable, or topical products on the market that contain intoxicating cannabinoids.”
“Of course, report language is not binding. But having the Committee on the record calling for regulation, not prohibition, — and using language that echoes the regulatory principles favored by a consensus of the hemp industry — will be critical during negotiations down the road, whether in the vote on the House floor, or later when compromising with the Senate,” Miller said in a July 11 statement.
Rep. Morgan McGarvey, D-Ky., has since filed amendments to strike the hemp ban and affirm state rights to regulate HDCs in the budget bill.
The Senate version of the appropriations bill filed in July (S 4690) does not have the total cannabinoid language or any other language to clarify the law on HDCs. Yet, a Committee on Appropriations report on the bill said the committee “recognizes the growing interest for U.S. hemp and hemp-based products for a variety of uses and directs FCA to work with the institutions under its jurisdiction to provide access to guaranteed loans for hemp producers and businesses.”
12 states pass new HDC laws, while bills fail in Florida, California
Legislation to regulate or ban HDCs were enacted in 12 states this year: Connecticut, Georgia, Iowa, Louisiana, Minnesota, New Hampshire, Oregon, South Dakota, Utah, Vermont, West Virginia and Wyoming. However, several states failed to pass new laws.
While opposing a November ballot initiative to legalize adult-use cannabis in Florida, Gov. Ron DeSantis vetoed the state legislature’s bill to ban nearly all HDCs, including CBD.
In his June 7 veto letter, DeSantis mentioned that he signed legislation in 2023 that regulated the HDC industry. “Senate Bill 1698 would introduce dramatic disruption and harm to many small and retail and manufacturing businesses in Florida — businesses that have emerged due to recent legislation paving the way for the commercial use of hemp,” he said.
He called for legislators to continue working on legislation addressing quality control; labeling, marketing and packaging; and retail sales.
However, DeSantis is reportedly hoping the action will compel hemp companies to contribute toward the campaign against Amendment 3 to legalize adult use and to the Republican Party of Florida.
At least one Florida hemp company, POB Ventures, doing business as Chronic Guru, has contributed $100,000 to the Florida Freedom Fund to oppose the ballot measure. Its owner, Patrick O’Brien, reportedly said he isn’t opposed to adult-use legalization. Rather, he objects to the ballot language because it doesn’t guarantee more licenses to allow new operators to enter the market.
Miller said the organization is “very grateful” the governor vetoed the hemp legislation, but as a lobbying group, it won’t be providing money to the campaign. However, some contributors are members, he said.
In California, a bill that would have required hemp-derived products exceeding 1 mg of THC (0.25 mg per serving), including CBD products, to be regulated under the state’s cannabis program and require hemp manufacturers to be registered is considered dead for this year. After the state assembly passed AB 2223 in May, the senate appropriations committee held it under submission. The legislative session ends Aug. 30.
Oklahoma and Missouri also failed to pass legislation to regulate HDCs this legislative session.
But then on Aug. 1, Missouri Gov. Michael Parson used his executive power to order the Department of Health and Human Services “to embargo and condemn any food containing unregulated psychoactive cannabis products” beginning Sept. 1. The Division of Alcohol and Tobacco Control was also ordered to amend its regulations to prohibit unregulated psychoactive cannabis products from being sold in licensed liquor stores. The order does not apply to products regulated by the state Division of Cannabis Regulation.
“This Executive Order effectively bans the sale of these potentially harmful products in Missouri until such time approved sources can be regulated by the FDA or State of Missouri through legislative action” Parson said in a press release. “Protecting Missourians, especially the most vulnerable, our children, has been our guiding principle since the very beginning and remains so today.”
Meanwhile, a North Carolina bill to regulate the industry passed both houses in June and is now in conference committee. H 563 would require a license to manufacture, distribute and sell HDC products, ban sales to people under age 21, and establish a 10.5% tax. It would restrict consumable products to the federal 0.3% delta-9 dry-weight limit. The version that passed the senate would allow up to 25 mg of delta-7 through delta-10 THC in non-liquid consumable products and establish limits on liquid products.
Another appellate court to hear hemp law challenge
As Congress seeks to clarify the definition of legal hemp, a third U.S. appellate court is going to hear one of the latest challenges to state bans and restrictions.
In Wyoming, a legal challenge over the state’s new hemp law is going to the 10th Circuit Court of Appeals after a lower court judge denied a temporary injunction and dismissed the case with prejudice on Aug. 15.
In Green Room LLC, et al. vs. State of Wyoming, 11 plaintiffs, including one woman who uses delta-8 THC to treat her epilepsy, claim the HDC market in the state “is now threatened with extinction” as a result of SEA 24, which was signed by the governor on March 7 and took effect July 1.
SEA 24 defines legal hemp products as containing “no synthetic substance and with a THC concentration of not more than three-tenths of one percent (0.3%) on a dry weight basis when using post-decarboxylation or another similarly reliable testing method.”
In a June 28 request for a temporary restraining order or preliminary injunction, the plaintiffs claim the 2018 Farm Act “declares all derivatives and isomers of hemp to be legal.” Because it’s illegal to possess these products in Wyoming, the law also inhibits interstate commerce, they allege.
In a July 9 response, the state said SEA 24’s definition of legal hemp is consistent with federal law.
“Plaintiffs also seem to argue that it is impossible to grow a reasonable yield of hemp under the current language of the law,” they wrote. “However, the only change to the definition of ‘hemp’ in SEA 24 is the addition that hemp cannot contain ‘any synthetic substance,’ or ‘psychoactive substance’ containing more than three-tenths of one percent (0.3%) THC.”
The state said the DEA had already determined that synthetic substances are not legal hemp.
Following a hearing, U.S. District Court Judge Kelly H. Rankin agreed with the state. She denied the temporary restraining order and preliminary injunction on July 19 stating in her order that the 2018 Farm Bill “permits States to impose more stringent restrictions,” and the law places an “insignificant burden on interstate commerce.”
The judge added, “SEA 24 also does not constitute a taking because it does not attempt to regulate property, but instead is a prohibition on substances the government passed by valid legislation.”
Rankin then dismissed the case on Aug. 15. The plaintiffs, represented by Domonkos & Thorpe LLC in Cheyenne, appealed the case to the 10th Circuit.
But the decisions the industry has been waiting months for are in the 4th Circuit and 8th Circuit U.S. Court of Appeals. Lower court rulings in Kentucky and Virginia came to opposite views on whether states can ban HDC products. An injunction has been placed on Kentucky’s state law banning synthetic hemp-derived THC substances, while a U.S. District Court judge in Virginia has upheld that state’s law limiting “total THC” in products.
Both cases – Bio Gen LLC, et. al. vs. Sarah Huckabee Sanders, et al. and Northern Virginia Hemp and Agriculture LLC, et. al. vs. The Commonwealth of Virginia, et al. – remain pending.
Oral arguments in the Virginia case were held in May, but the court hasn’t yet issued a ruling. In the meantime, the state has been actively enforcing the law under a new Office of Hemp Enforcement in the Department of Agriculture and Consumer Services. Since the law took effect on July 1, 2023, through July 2024, the office has fined 389 businesses more than $12.4 million for over 20,000 violations, reported the Cannabis Business Times.
Meanwhile, in Iowa, cannabis beverage makers Climbing Kites and Field Day Brewing Co. dropped their legal challenge after a federal judge denied their motion for a temporary restraining order to block enforcement of HF 2605, which was signed by the governor in May and took effect July 1.
The companies claimed that new THC limits on beverages to 4 mg per serving and 10 mg per container were unconstitutionally “vague beyond comprehension.”
In her July 25 order denying the motion, Chief Judge Stephanie M. Rose of U.S. District Court for the Southern District of Iowa, Southern Division, said the Iowa Department of Health and Human Services’ filing of final emergency rules on July 17, “ends the inquiry into a due process claim based on constitutional vagueness. Accordingly, Plaintiffs have not established that they are more likely than not to succeed on their claim and a preliminary injunction on that basis is unwarranted.”
Climbing Kites and Field Day Brewing then filed to dismiss the case without prejudice on Aug. 8.
Another federal lawsuit challenging hemp law in Alaska remains pending, as do cases in Texas and Maryland state courts.
