In the absence of federal enforcement action, state legislatures have stepped into the breach, enacting laws regulating intoxicating hemp products. In turn, challenges to state authority to regulate intoxicating hemp products are being filed. In a recent decision that may foreshadow what is to come, a federal court declined to enjoin Wyoming's hemp law.
As we have previously reported, the passage of the Agriculture Improvement Act, commonly referred to as the 2018 Farm Bill, opened the floodgates to unregulated intoxicating hemp products across the country. Though the 2018 Farm Bill authorized the U.S. Food and Drug Administration to regulate hemp-derived products intended for human consumption, the FDA has yet to promulgate rules. In the absence of federal regulations, states have begun to enact their own rules.
In Green Room LLC, et al. v. State of Wyoming, et al., a group of hemp wholesalers, retailers, and manufacturers filed a federal suit challenging amendments to Wyoming's hemp laws and requesting a preliminary injunction. In pertinent part, the amendments expanded the definition of THC to include any psychoactive structural, optical, or geometric isomers of THC, encompassing both CBD and the popular Delta-8 THC. Because cannabis remains illegal in Wyoming, the amendments effectively prohibited the possession, sale, transport, and production of intoxicating hemp products. The plaintiffs argued, in part, that the amendments were unconstitutional because they were preempted by the 2018 Farm Bill, which they claim legalized intoxicating hemp products for intrastate and interstate purposes.
On July 19, 2024, the federal court denied plaintiffs' request to enjoin enforcement of the new law, finding that they do not have a substantial likelihood of success on the merits.
Specifically, the court found that the 2018 Farm Bill does not prevent states from regulating intoxicating hemp products. The court found the 2018 Farm Bill did not confer any right on plaintiffs to manufacture or sell intoxicating hemp products, but merely redefined the term hemp. Most important, it held the 2018 Farm Bill contains an express "no preemption" clause permitting states to regulate hemp more stringently than federal law. The no preemption clause expressly permits a state to enact laws regulating intoxicating hemp products in a manner "more stringent" than the 2018 Farm Bill. The court further concluded that Wyoming's amendments do not violate the dormant commerce clause, do not amount to a regulatory taking, and are not unconstitutionally vague or overbroad.
Green Room is not the first challenge to state restrictions on intoxicating hemp products. In Bio Gen LLC et al. v. Sanders et al., the State of South Dakota appealed a trial court decision enjoining South Dakota regulations that restrict the manufacture and distribution of hemp products that contain synthetic cannabinoids that could be intoxicating, such as Delta-8 THC. In Northern Virginia Hemp and Agriculture LLC, et al. v. Commonwealth of Virginia, et al., the plaintiffs, a hemp product manufacturer/distributor and consumer, appealed a trial court decision that denied their motion to enjoin the State of Virginia from enforcing Virginia regulations that restrict the manufacture and distribution of hemp products that contain synthetic cannabinoids that could be intoxicating, such as Delta-8 THC.
These pending appeals present the possibility of a federal circuit split on the question whether the 2018 Farm Bill legalized intoxicating substances that could be derived from hemp. On behalf of the American Trade Association for Cannabis & Hemp, Duane Morris filed an amicus brief in each case that asserts that the 2018 Farm Bill did not legalize hemp-synthesized intoxicants like delta-8 THC, and it reserved for states the right to regulate such substances in the interest of public safety.
As more states roll out new restrictions on intoxicating hemp products and operators, we expect to see more challenges. Though not a final ruling on the merits of the suit, the court's decision suggests these plaintiffs and others challenging state intoxicating hemp laws have an uphill battle ahead.
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