As state governments across the country try to strictly regulate hemp-derived cannabinoids (HDC), and industry players file suit to stop them, three key cases in U.S. appellate courts continue to slog on.
All three cases in Virginia, Arkansas and Wyoming are mainly still deciding on appealed motions for preliminary injunctions to block implementation of HDC laws. District courts in Virginia and Wyoming denied preliminary injunctions, and the judge in Wyoming also dismissed the lawsuit. But a district court judge in Arkansas has allowed a preliminary injunction, blocking enforcement of an HDC ban.
Hemp advocates argue that the 2018 Farm Act legalized the production of hemp that contains less than 0.3% delta-9 THC. Once the plant is deemed hemp, all of its “derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not” are legal under the law. It also specifically preempts state laws that would prohibit interstate commerce.
State legislators and regulators focus on other language in the Farm Act that says “[n]othing in this subsection preempts or limits any law of a State or Indian Tribe that (i) regulates the production of hemp; and (ii) is more stringent than this subchapter.”
Many states have tried to define hemp by its total THC concentration, not just delta-9, because delta-8 is also intoxicating. THCA, another cannabinoid, turns into delta-9 when heated. New Jersey did so in September, and the law was challenged by hemp manufacturers and retailers in Loki Brands LLC v. Platkin.
While U.S. District Court Judge Zahid N. Quraishi ruled in October that New Jersey’s law violated the express-preemption clause in regards to transportation of hemp through the state, the judge also said the state legislature “remains free to regulate the production of hemp as stringently as it would like.”
Meanwhile, the Arkansas case, BioGen et. al. v. Sarah Huckabee Sanders, et. al, has been pending for over a year, after the state appealed the preliminary injunction. Arguments were heard in September, and there’s still no ruling. The underlying case in U.S. District Court for the Eastern District of Arkansas has been stayed pending an appellate court ruling.
On Dec. 3, Arkansas’ Senior Assistant Solicitor General Asher Steinberg submitted a letter to the Eighth Circuit Court of Appeals informing Judge Maureen Gornik about the New Jersey District Court ruling in the Loki Brands case.
Steinberg wrote, “With that decision, one court of appeals and a total of eight district courts spanning five other circuits – in Alaska, California, Hawaii, Iowa, South Dakota, Virginia, Wyoming, and now New Jersey – have rejected implied-preemption challenges to laws like the one at issue here.”
The one appeals court ruling Steinberg refers to is in the case C.Y. Wholesale Inc., et al. v. Eric Holcomb, et. al. by the Seventh Circuit Court of Appeals in 2020.
In Virginia, oral arguments were heard in May in Northern Virginia Hemp & Agriculture, et. al, v. The Commonwealth of Virginia, which has been sitting in the Fourth Circuit Court of Appeals since November 2023. As of Dec. 31, 2024, there’s still no ruling.
Meanwhile, state regulators have been enforcing an HDC law that went into effect in July 2023.
The Virginia Department of Agriculture and Consumer Services keeps a voluntary registry of edible hemp products containing a total THC of less than 0.3%. Beginning Nov. 15, 2024, the department required hemp retailers to register, with a deadline of Dec. 31.
Briefs filed in Wyoming HDC case in the 10th Circuit
Steinberg had also alerted the Eighth Circuit on Aug. 1 to a case in Wyoming where the judge upheld the state’s law to restrict HDC products.
Senate Enrolled Act 24, signed by the Wyoming governor in March, redefined legal hemp as:
“’Hemp’ or ‘hemp product’ means all parts, seeds and varieties of the plant cannabis sativa l or a product made from that plant with no synthetic substances and with a THC concentration of not more than three-tenths of one percent (0.3%) on a dry weight basis.”
In June, 11 hemp companies filed suit in the state’s district court in Green Room et. al. v. State of Wyoming, et. al. They alleged that the federal Farm Act preempts state law, that the law violates the dormant commerce clause, that it amounts to unconstitutional regulatory taking, and it should be void for vagueness.
U.S. District Judge Kelly Rankin upheld the state law under the “more stringent” language of the Farm Act and denied a TRO. On Aug. 15, she dismissed the case with prejudice.
The plaintiffs then appealed to the 10th Circuit Court of Appeals. In its opening brief filed in November, they argue that the Farm Act only allows to more stringently legislate the production of hemp. They claim the word production is a “term of art” in federal statutes that means to grow or cultivate a crop or seeds.
“Clearly, to ‘produce’ hemp means to grow hemp, and [the] state may restrict the ability to grow hemp more stringently than under federal law with provisions directly related to growing hemp like requiring certified seed and setback requirements.”
They also said witness testimony in the lower court showed that there is no way to legally determine whether delta-8 is natural or synthetic.
State attorneys argued in their Dec. 9 brief that the district court “properly found that Green Room failed to present facts that legally could support the essential elements of each of its claims.”
Farm Act update delayed into 2025
Because of all the confusion and tension over HDC products, federal lawmakers are urged to address the issue in the Farm Bill. While the 2018 Farm Act expired last year, Congress has again extended the behemoth omnibus legislation, which covers a wide range of policy, for Fiscal Year 2025, delaying any potential changes.
But it’s appearing that a total-THC definition of legal hemp may happen as both the Republican-led House of Representatives and Democratic-led Senate bills have language to that effect.
An amendment introduced by Rep. Mary Miller, R-Ill., in May to the House version of the bill (HR 8467) goes even further by banning HDC products with “quantifiable amounts” of THC or THCA. Her amendment is also included in a FY 2025 agriculture appropriations bill.
A June 17 Congressional Research Service report explained, “While the amendment does not define intoxicating, it would prohibit hemp cannabinoid products with ‘quantifiable amounts’ of Total THC (including THCA) or any other cannabinoids that have (or are marketed to have) “similar effects on humans or animals” as THC, as determined by USDA.”
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’s version of the Farm Bill (S 5335) introduced in November, would relax requirements for producers of “industrial hemp” that “will not be used in the manufacturing or synthesis of natural or synthetic cannabinoid products.” It would also create a certified seed pilot program.
But with the Senate changing to Republican leadership in 2025, it remains to be seen whether the current Senate version will stick.
