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A federal court vacated a preliminary injunction on June 24 that had been blocking Arkansas from implementing a ban on certain hemp-derived cannabinoids, including delta-8 THC, for the past two years.
Arkansas Gov. Sarah Huckabee Sanders signed Senate Bill 358 (Act 629) into law in April 2023, legislation to prohibit intoxicating hemp-derived cannabinoids by classifying a list of tetrahydrocannabinols as Schedule VI substances in the state. That list included delta-8, delta-9 and delat-10 THC, among other compounds.
The intent of the Arkansas General Assembly and Sanders was to stop the production and sale of intoxicating substances derived from federally compliant industrial hemp, as defined under the 2018 Farm Bill. State lawmakers and the governor specifically had concerns with products derived from industrial hemp that were produced as a result of a synthetic chemical process.
While Act 629 took effect in August 2023, U.S. District Judge Billy Roy Wilson placed a preliminary injunction on its implementation five weeks later after a quartet of cannabis-related businesses filed a lawsuit claiming that the ban violates the U.S. Constitution’s Supremacy, Due Process, Takings and Commerce clauses.
The plaintiff businesses include Bio Gen LLC, Drippers Vape Shop LLC, Cigarette Store LLC (d/b/a Smoker Friendly) and Sky Marketing Corp. (d/b/a Hometown Hero)—collectively, “Bio Gen.”
Wilson also denied a motion to dismiss that Sanders, Attorney General Tim Griffin and other Arkansas officials filed in the Eastern District Court. In part, the district court judge ruled that Bio Gen would likely succeed on the merits of its Supremacy Clause claim because the 2018 Farm Bill likely preempted Act 629.
However, the U.S. Court of Appeals for the Eighth Circuit reversed the lower court’s ruling this week, dealing a victory to the Arkansas officials.
“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,” Eighth Circuit Judge Jonathan Allen Kobes wrote in the June 24 ruling.
Kobes said that, under the 2018 Farm Bill, Congress authorized the U.S. Department of Agriculture to allow states to apply for and receive the primary regulatory authority over their in-state hemp production programs.
Under the 2018 Farm Bill, states cannot interfere with the interstate commerce of hemp by preventing the continuous transportation of federally compliant materials through their borders. The Eighth Circuit ruled that Act 629 does not do that.
“The [2018 Farm Bill] text does not support Bio Gen’s claim that Congress intended to ‘federally protect hemp’ and coercively mandate nationwide legality,” the judge wrote. “States may obtain primary regulatory authority over hemp production. And with that primary regulatory authority, states may ‘regulate the production of hemp’ in any manner ‘more stringent than [the 2018 Farm Bill].’”
In other words, it’s the Eighth Circuit Court’s opinion that just because states may legalize hemp under the 2018 Farm Bill does not mean they are required to, nor does it mean they have to utilize the federal definition of hemp: a plant that tests at or below 0.3% delta-9 THC by dry-weight during a pre-harvest field test.
“This is a huge victory for the state and a great step towards protecting generations of Arkansas’ children from the dangers of synthetic marijuana,” Sanders said on social media following Tuesday’s court decision.
The American Trade Association for Cannabis and Hemp (ATACH), which filed an amicus brief in December 2023 supporting Arkansas officials, provided a statement to Cannabis Business Times in support of the Eighth Circuit’s decision.
“ATACH welcomes today’s Eighth Circuit ruling, which affirms the right of states to regulate intoxicating hemp-derived products and provides clarity to state lawmakers seeking to address these products in their states,” ATACH Vice President of Policy Chris Lindsey said.
The Eighth Circuit’s opinion holds jurisdiction in seven states: Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota and South Dakota.
Still, when Texas Gov. Greg Abbott vetoed legislation late Sunday night that would have banned consumable hemp products with trace amounts of THC in the Lone Star State, he pointed to neighboring Arkansas.
In his veto proclamation, Abbott argued that had he signed Senate Bill 3, its enforcement would have been enjoyed for years, leaving public health and safety concerns related to intoxicating hemp products unaddressed.
“In 2023, Arkansas enacted Senate Bill 358, which (like this bill) would have criminalized hemp products that Congress expressly legalized in the 2018 Farm Bill,” Abbott wrote on June 22, two days before the Eighth Circuit’s ruling.
“[The 2018 Farm Bill] converted hemp and hemp products from contraband to lawful commodities. The Arkansas law was challenged, and a federal court swiftly halted it in its entirety, finding it was likely preempted by federal statutes and that its criminal provisions were likely unconstitutionally vague,” Abbott wrote. “The result in Arkansas? Their law has sat dormant, meaningless, having no effect for nearly two years while further legal proceedings play out. That result must be avoided in Texas.”
RELATED: Texas Governor Vetoes Ban on Hemp Products, Calls For Special Session to Regulate THC
Instead of signing S.B. 3 to prohibit intoxicating hemp products in Texas, Abbott included the legislation as one of five bills for legislators to address during a 30-day special session slated to begin July 21, recommending they instead craft a regulatory framework for hemp products similar to alcohol.
The following day, Texas Lt. Gov. Dan Patrick, who spearheaded S.B. 3’s passage as the presiding officer in the state Senate, accused his GOP ally in the governor’s office of wanting to “legalize recreational marijuana.”
“That’s the headline, folks, because that’s what his proclamation does,” Patrick said during a June 23 press conference. “Now, whether it’s unintentional and he didn’t think through it, or whether it’s intentional, that’s the result of the veto.”
Patrick also questioned whether the state’s hemp businesses were running terrorist or cartel money laundering schemes, claiming that someone told him to “I better watch my step.” The lieutenant governor also asked, “Who convinced [Abbott] on his staff from the outside to kill Senate Bill 3?”
Patrick also reaffirmed that the governor indicated to him that he would sign S.B. 3, saying that he was puzzled by the last-minute veto because of the broad support for the legislation by lawmakers and law enforcement officials.
Patrick pointed to the 105 of 108 Republicans in the Texas Legislature who supported S.B. 3, suggesting that Abbott should have respected that near-unanimous backing for the bill.
“The governor and I will work together in the future, and we’ll disagree from time to time, but this is a fight that didn’t need to be,” he said.
Patrick also targeted Abbott’s inclusion of the Arkansas injunction in his veto proclamation, calling into question the governor’s argument that S.B. 3 would be subject to “valid constitutional challenges.” Abbott leaned on his background as a former Texas Supreme Court Justice and state attorney general in making that conclusion.
Despite Abbott’s law background, Patrick said the governor’s argument was “flawed.”
“We believe the Eighth Circuit will stand with Arkansas,” said Patrick, whose prediction came true the next day. “And so, if that happens while we’re going through this charade, then what’s the governor going to say? ‘Oh, I guess I was wrong about Arkansas?’”
Patrick said it should not matter if the same legal battle unfolds in the U.S. Fifth Circuit Court of Appeals, which holds jurisdiction over Texas.
“Since when did we care who sued us when we passed a bill?” the lieutenant governor asked. “We deal with lawsuits all the time, so that shouldn’t be a surprise.”
Following the Eighth Circuit Court’s ruling on June 24, Patrick posted an I-told-you-so message on X, indicating that he’ll fight to maintain S.B. 3’s prohibition language in the upcoming special session.
“As I said yesterday at my press conference, it appeared to my legal team and me that Arkansas would win this case and be able to ban THC,” he wrote. “It won’t be long before 8,000 smoke and vape shops will be out of business in Texas. All we have to do is pass S.B. 3, just like we passed during the regular session.”
