The Eighth Circuit Court of Appeals overturned a lower federal court’s two-year-old temporary injunction against a state-wide hemp ban, determining that while the 2018 Farm Bill legalized hemp-derived intoxicants at the federal level, it did not bar state governments from instituting their own limit.
“The text of the 2018 Farm Bill shows only that Congress wanted to facilitate state legalization of hemp, if a state wants to. Congress allows states to legalize hemp by removing the biggest hurdle—federal criminalization,” wrote Circuit Judge Jonathan Kobes in a June 24, 16-page opinion. “And to ensure other states do not become a hurdle to an in-state hemp industry (if the state chooses to legalize hemp), the 2018 Farm Bill prevents other states from interfering with the interstate commerce of hemp.”
The ruling is a major step forward for states that have attempted to rein in their respective hemp industries that sprouted in the wake of the Farm Bill. Gov. Sarah Huckabee Sanders signed Act 629 into law in April 2023, which banned the sale of delta-8, delta-9 and delta-10 products, along with any synthetic or psychoactive cannabinoid.
The plaintiffs, Bio Gen, Dripppers Vape Shop, Smoker Friendly and Hometown Hero, argued Act 629 was unconstitutionally vague and it conflicted with federal law by barring transportation of hemp through the state.
The circuit court was unconvinced by the plaintiffs’ arguments noting the Arkansas law specifically allows for interstate transportation, and the regulations include clearly defined enforcement protocols.
“We also conclude Act 629 is not unconstitutionally vague and the district court abused its discretion when it issued a preliminary injunction based on the statute being void for vagueness,” wrote Kobes.
The judge also reversed the lower court’s denial of motions to dismiss the governor and attorney general. Neither are directly responsible for enforcement of the state’s hemp regulations, so they are protected by sovereign immunity.
“This ruling is a serious setback for Bio Gen, the Arkansas hemp litigants, and the broader hemp industry in the state,” wrote attorney Rod Kight of Kight Law in response to the ruling. “More broadly, it sets a troubling precedent as hemp operators nationwide confront similarly restrictive laws in other jurisdictions.”
A federal judge in Arkansas temporarily blocked the state’s ban on hemp-derived THC on Sept. 7, 2023.
In response to the lawsuit filed July 31, 2023, by the local hemp producers, U.S. District Judge Billy Roy Wilson concluded that the underlying law banning hemp-derived cannabinoid (HDC) products was preempted by the 2018 Farm Bill, which barred states from passing laws that limit interstate commerce of hemp products.
HDC bans gain popularity nationwide
The Arkansas ruling is the latest salvo in a nationwide movement by states to regulate delta-8 THC and other hemp-derived cannabinoids.
HDC products have grown in popularity since the 2018 Farm Bill legalized all hemp products that contained no more than 0.3% delta-9 THC based on total dry weight instead of based on the total amount of THC. For example, most states with legal adult-use cannabis have limits on how many milligrams of THC can be present in a single serving of an edible. That same amount of THC could be less than 0.3% of the total weight of the gummy or chocolate bar. It also means that hemp products can be sold outside of state-licensed dispensaries.
These products have largely been unregulated by the FDA, including for basic product safety and marketing to children, so states have tried to step in and fill the legal void.
At the federal level, Congress is currently considering an appropriations bill that may close the hemp loophole, but those negotiations remain ongoing.
Two days before this ruling, Texas Gov. Greg Abbott vetoed an expansive hemp ban that could have wiped a massive state market with over 8,000 storefronts and almost 50,000 employees. He referred to the Arkansas injunction and constitutionality concerns in his veto letter.
Over in California, Gov. Gavin Newsom recently moved to make permanent an emergency hemp ban his administration put into place last year.
Tennessee’s legislature also recently passed a hemp restriction that limited sales to age-gated businesses such as liquor stores and banned the sale of THCa flower.
The ruling is likely to set legal precedents for other states within the eighth circuit such as Minnesota and Missouri – two states with legal adult-use markets whose legislatures have attempted to stamp out the sale of hemp-derived THC product.
The Fourth Circuit Court of Appeal upheld Virginia’s own hemp ban last January.
