[[{“value”:”
The Fourth Circuit Court of Appeals struck a blow in favor of states regulating hemp beyond federal oversight, at the same time that hemp-derived intoxicants have grown into a multi-billion dollar industry.
The Jan. 7 court ruling in Northern Virginia Hemp and Agriculture LLC v. Commonwealth of Virginia, which originated in the Eastern U.S. District Court of Virginia, could have staggering implications beyond just Virginia’s hemp industry. Many other states have enacted tighter regulations on hemp since 2018, drawing litigation from opponents of such efforts.
The federal government essentially legalized several forms of hemp-derived products when the 2018 Farm Bill was signed into law. That law descheduled hemp products as long as the total amount of delta-9 THC is less than 0.3% of that product’s total weight. That meant that other cannabinoids, such as delta-8 THC and THCA were suddenly legal federally.
Since then, numerous states have attempted to regulate these cannabinoids with varying levels of success, including Virginia, which passed SB 903 in 2023 in an attempt to curb the proliferation of hemp products.
SB 903 set a limit on total THC in a hemp product, including THCA, delta 8 THC and other similar cannabinoids that had been omitted from the Farm Bill. The law banned the sale of such products and made it illegal for hemp growers to knowingly sell their products to other companies that intended to convert that hemp into illicit products.
A consumer of hemp products, an in-state company that grows and sells hemp and a multi-state retailer all sued the state of Virginia in federal court, challenging SB 903 and seeking an injunction to block enforcement of the new law.
“The plaintiffs seek the extraordinary relief of a preliminary injunction enjoining parts of state statutes designed to promote the health and safety of its citizens,” wrote Circuit Judge Marvin Quattlebaum in a 36-page opinion released on Jan. 7. “But as the district court properly found, they have not shown that they are entitled to such relief.”
The Fourth Circuit affirmed the Eastern U.S. District Court of Virginia’s denial of a preliminary injunction on the grounds that Virginia’s THC limit law is not preempted by the 2018 Farm Act. In short, while the Farm Act removes federal prohibitions on certain hemp products, that law still leaves room for states to add their own restrictions.
“The only specific prohibition these statutory notes place on states is that they cannot prevent hemp or hemp products that comply with federal law from being transported through the states,” wrote Quattlebaum. “The 2018 Farm Bill says nothing about the ability of states to regulate the sale of hemp products within their borders.”
Ruling Could Establish a Precedent for Similar Cases
The ruling is the first major hemp ruling from the federal appellate level, in over four years, which currently has two other similar cases that are ongoing in other circuits. Specifically, the Eighth Circuit Court of Appeals is considering a case out of Arkansas, while the Tenth Circuit is considering a case out of Wyoming.
In 2020 the Seventh Circuit Court of Appeals became the first circuit court to rule on state hemp laws in regard to conflict with federal law when it vacated a lower court ruling in C.Y. Wholesale Inc. v. Holcomb.
The court struck down an injunction that had halted Indiana’s ban on hemp products for being too broad. At the same time, the court sent the case back to the U.S. District Court to consider a narrower injunction.
Indiana’s ban prohibited the possession of intoxicating hemp products, which also applied to out-of-state companies that might travel through the state with hemp. The circuit court noted that the ban would have been permissible if it had only been placed on the cultivation and production of hemp products in the state.
Shortly after the Fourth Circuit ruling, on Jan. 8, The Office of the Arkansas Attorney General wrote a letter to the Eight Circuit, citing the ruling in the Virginia case as further support of Arkansas’ own hemp regulation.
“In upholding Virginia’s law, the Fourth Circuit joined the Seventh Circuit in rejecting preemption challenges to state regulations of hemp, with no court of appeals decisions to the contrary,” wrote Arkansas Senior Assistant Solicitor General Asher Steinberg.
With the Fourth Circuit ruling, the plaintiffs’ next available move would be to petition to have their appeal heard by the Supreme Court.
“}]] Many other states have enacted tighter regulations on hemp since 2018, drawing litigation from opponents of such efforts. Read More
