Column: Hemp legal fights heat up in California and beyond
Refiles to add 'Column' in the headline. The opinions expressed here are those of the author, a columnist for Reuters.
By Jenna Greene
Oct 9 (Reuters) -In the cooler of my local mini-mart tucked alongside the sodas, juices and iced teas, a new product showed up this summer.
“Cannabis-infused social tonic,” the label said. “CBD + THC. Hemp derived.”
I was confused.
Cannabis has been legal for adult recreational use in my home state of California since 2016, but distribution is strictly limited to state-licensed stores. So how can a mini-mart sell citrus seltzer water infused with cannabis in its soda case? And can anyone buy it, even kids?
Those questions are at the heart of legal and regulatory battles now playing out in California and beyond as state officials seek to clamp down on the retail sale of food, beverage and dietary products containing intoxicating hemp.
Hemp industry proponents are squaring off in Los Angeles County Superior Court on Thursday against California regulators, asking for a temporary restraining order to halt the state’s new emergency ban on the products.
The new regulations, which took effect last month, forbid the sale of hemp products containing any detectable intoxicating cannabinoids and now require purchasers in California to be 21 or older and limit serving and package sizes.
Similar fights are unfolding not just in the 24 states and District of Columbia that have legalized recreational cannabis, but across the country. Officials in states including Alaska, Arkansas, Indiana, Missouri, New Jersey, Tennessee and Virginia are also defending moves to regulate or ban products such as gummies, chocolates and vape cartridges with psychoactive hemp-derived compounds.
Lawyers tell me this relatively new market sprang up in response to a loophole in the federal Agriculture Improvement Act of 2018 — commonly referred to as the Farm Bill — that legalized industrial hemp.
A variety of the same cannabis plant that produces intoxicating marijuana, hemp comes mainly from the plant’s fibrous stalks and can be used, for example, to make cloth, biofuels or insulation. The key distinction, per the Farm Bill, is that hemp cannot contain more than 0.3% of delta-9-THC, the component in cannabis that gets you high.
Except it turns out that with a bit of creative chemistry, hemp can also get you high, with industry players extracting and synthesizing a range of intoxicating THC compounds such as delta-8-THC, delta-9’s milder but still potent cousin.
At a press conference in September, California Governor Gavin Newsom, brandishing a bag of hemp gummies in a shiny purple package, said the emergency ban, which expires in March 2025, was prompted by the need to crack down on “intoxicating products that are leading to more and more abuse by our children.”
Until the ban went into effect on Sept. 23, there was no minimum age in the state to buy the hemp-based products, which under federal law are not a controlled substance. Newsom said the gummies and drinks were often sold “specifically in and around grocery stores” near schools to target children.
A spokesperson for Newsom declined additional comment.
In response, hemp industry plaintiffs including a venture founded by comedy duo Cheech and Chong sued to block the ban, claiming the “draconian regulation” will devastate the emerging hemp industry and runs afoul of California’s Administrative Procedure Act.
Frost Brown Todd partner Jonathan Miller, who represents the plaintiffs and also serves as the U.S. Hemp Roundtable’s general counsel, acknowledged there may be some “bad actors” selling hemp products aimed at kids. Industry leaders support 21-and-over age restrictions, he told me. But he also argues that the emergency ban “far overreaches.”
In seeking a temporary restraining order to halt the measure, the plaintiffs want Judge Stephen Goorvitch to find California wrongly invoked an “emergency” to bypass the normal rulemaking process. Moreover, the plaintiffs note, California’s legislature on Aug. 31, 2024, failed to pass a measure that would have enacted similar provisions.
Procedural questions aside, the plaintiffs in court papers also argue that the ban “directly conflicts” with existing federal law by expanding the Farm Bill’s definition of hemp, adding another 30 cannabinoids including delta-8 THC to the restricted list. That means the same product that is “legally under and protected by the 2018 Farm Bill” could be illegal in California.
To date, federal appellate courts have had limited opportunities to weigh in on the issue, but in 2022, the 9th U.S. Circuit Court of Appeals handed hemp proponents a win in a copyright and trademark case.
In AK Futures v. Boyd Street Distro, the panel unanimously found that an e-cigarette company was entitled to trademark its “Cake”-branded products containing delta-8 THC, rejecting a claim that the products were ineligible for intellectual property protection because delta-8 THC is illegal.
The Farm Bill’s plain, statutory text “compels the conclusion” that the company's products are lawful, the panel wrote. Under the statute, the only difference between controlled marijuana and legal hemp is the plant's delta-9 THC concentration level, the court held. That meant the company’s delta-8 products “fit comfortably” within the definition of legal hemp.
Last month, the 4th U.S. Circuit Court of Appeals in a wrongful termination case reached a similar conclusion.
The plaintiff, who was fired for failing a drug test, asserted that every hemp-derived product she took was legal. In what the panel called “an issue of first impression,” the 4th Circuit rejected the employer’s contention that the hemp-derived products were illegal (though the plaintiff lost for other reasons).
As the California hemp case unfolds, it’s likely to have “enormous implications” given the state’s sheer size, said Dentons partner Eric Berlin, who heads the 6,000-lawyer firm’s global cannabis practice and is not involved in the litigation.
“The industry recognizes the need for some oversight and reasonable regulation for sure,” Berlin told me, including age limits for purchase. “We’re seeing greater tension now because the [hemp] industry has grown so large.”
Reporting by Jenna Greene
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