Earlier this week, I wrote about how hemp organizations ought to not but rely on the 2018 Farm Bill to guard them from their goods becoming seized. This is due to the fact while Section 10114 of the 2018 Farm Bill prohibits states from interfering with the interstate transport of hemp and hemp goods, that protection is restricted to hemp that was cultivated in accordance with Section 10113 of the 2018 Farm Bill. At this time, complete compliance with Section 10113 is not attainable due to the fact the US Division of Agriculture (“USDA”) has but to approve of any state or tribal plans covering the cultivation of hemp or situation its personal strategy enabling for the cultivation of hemp in states that do not have an authorized strategy.
As such, the cultivation of hemp is nevertheless governed by the 2014 Farm Bill, which enables state departments of agriculture to license the cultivation of industrial hemp. States have taken a extensively diverse method to regulating industrial hemp and not all states recognize any distinction amongst industrial hemp and marijuana, regardless of the quantity of THC present.
Back in September 2018, I wrote about how varying state laws created it difficult to ship hemp goods, which includes hemp-derived CBD (“Hemp- CBD”) across the nation. I employed the following instance to illustrate the dangers:
[B]usinesses should very carefully think about how their goods attain shoppers. For instance, picture that Hemp Co. is arranging to distribute Hemp- CBD. Hemp Co. sources its industrial hemp from a farm in Medford, a compact town in Southern Oregon. Hemp Co. has a massive order to fill for a organic meals shop in Billings, Montana. Hemp Co. decides that the quickest and least expensive technique of delivery is ground shipping by means of Idaho. Having said that, according to a 2015 informal opinion from the Idaho Lawyer Common, the state tends to make no distinction amongst industrial hemp and marijuana. Thus, Hemp- CBD, even with out the presence of THC, is not permitted in Idaho. Even although Hemp Co.’s goods come from a farmer who cultivates in-line with Oregon’s industrial hemp plan (and relevant federal law), that does not insulate Hemp Co. from liability if the shipment is inspected by Idaho State Police.
However, this hypothetical now seems to be playing out in actual life as the Idaho State Police not too long ago seized a shipment of industrial hemp traveling from Oregon to Aurora, Colorado.
Huge Sky is a Colorado firm that processes hemp into CBD powder which it then sells to producers who add CBD to a quantity of diverse customer goods. Huge Sky bought 13,000 pounds of hemp from a permitted hemp cultivator in Oregon. Huge Sky contracted with a third celebration logistics firm to have the hemp shipped from Oregon to Aurora, Colorado.
On January 24, 2019, a truck carrying the hemp was stopped in Ada County, Idaho. The driver did not conceal the reality that he was shipping hemp and a bill of lading that accompanied the shipment indicated that the cargo was hemp. The Driver was arrested and charged with marijuana trafficking in Idaho state court. The Idaho State Police seized the contents of the truck: 7,000 pounds of industrial hemp.
Huge Sky’s attorneys filed suit in US District Court in Idaho. Huge Sky is looking for a declaratory judgment stating that Idaho Police improperly seized Huge Sky’s appropriately and are improperly holding the home in light of the 2018 Farm Bill’s prohibition on the interstate shipment of hemp and common principles beneath the Commerce Clause which prohibit states from interfering with the interstate shipment of lawful goods. Huge Sky also filed a motion for a short-term restraining order (TRO) and preliminary injunction to force the Idaho State Police to quickly return the seized hemp.
In order to get emergency relief in the type of an injunction or TRO, a celebration should show that they are probably to succeed on the merits of the underlying case. The Court determined that Huge Sky had not met this burden due to the fact it is unclear no matter whether Section 10144 of the 2018 Farm Bill covers the seized hemp at situation. The Order denying Huge Sky’s claims states the following
The takeaway from an examination of the respective arguments of Huge Sky and the [Idaho State Police] is that a affordable argument can be created that even although Huge Sky could, at some point in time, be in a position to obtain industrial hemp that has been “produced in accordance with Subtitle G,” the hemp that was seized in Idaho could not possibly meet that typical due to the fact no “plans” to regulate the production of industrial hemp beneath the 2018 Farm Act have either been authorized (by the federal government as to Oregon, as pertinent right here) or made and promulgated by the United States Division of Agriculture for the federal government (to apply in the absence of an authorized state or tribal strategy).
To clarify, the Court is not ruling on the query of no matter whether Huge Sky was afforded protection beneath Section 10114 of the 2018 Farm Bill. Alternatively, it is saying that Huge Sky has not but shown a higher likelihood that it prevail on the merits and for that reason it is not entitled to have the seized hemp returned now. The Court has, nevertheless, identified that it is not clear that the 2018 Farm Bill prevents states from interfering with the interstate transport of hemp grown beneath the 2014 Farm Bill.
Huge Sky will no doubt argue that the 2018 Farm Bill does avert Idaho from interfering with this shipment. Even though it is accurate that the Section 10114 does not explicitly cover hemp grown beneath the 2014 Farm Bill, it appears fair to say that the intent of Congress is to have hemp treated like an agricultural commodity, not a controlled substance. Furthermore, Huge Sky’s attorneys can expand their arguments that Idaho is interfering with interstate commerce, an region that is traditionally only to be regulated by Congress beneath the Commerce Clause of the US Constitution.
We’ll continue to monitor Huge Sky’s case against the Idaho State Police. In the meantime, be quite cautious about how you ship hemp goods.