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Concerning news out of Idaho, where the U.S. District Court in Idaho delivered some bad news to the owners of the contents of a tractor trailer recently seized by the Idaho State Police. The trailer contained nearly 7,000 pounds of Cannabis sativa en route from Oregon to Colorado. Seizures of outbound Oregon marijuana are an unfortunate status quo these days — overproduction and cratered prices in Oregon have led to regulatory lamentation over black-market sales across state lines.
This seizure is different, however, as Big Sky Scientific LLC (“Big Sky”), the Colorado-based owner of the plants, sued Idaho law enforcement for the release of the shipment. Big Sky claims that the plants are hemp, that hemp is now legal since the passage of the Agricultural Improvement Act of 2018 (“2018 Farm Bill”), and that the 2018 Farm Bill protects the interstate commerce of hemp. The case highlights important questions about what the 2018 Farm Bill does and doesn’t do with respect to hemp, and Magistrate Judge Ronald Bush provided some worrying initial answers to these questions last week when he denied Big Sky’s motion for an injunction to have the shipment released.
The crux of the dispute isn’t over whether the plants are or aren’t “hemp,” but rather whether or not the 2018 Farm Bill preempts Idaho law, which prohibits cannabis and makes no exception for hemp. Big Sky points to Section 10114(b) of the 2018 Farm Bill that states, “[n]o State…shall prohibit the transportation or shipment of hemp or hemp products produced in accordance with subtitle G of the Agricultural Marketing Act of 1946 (as added by section 10113) through the State.” Big Sky contends that Section 10114(b) prevents Idaho from prohibiting the transport of hemp.
Idaho law enforcement, however, contends that Section 10114(b)’s prohibition applies only to hemp that is “produced in accordance with subtitle G of the Agricultural Marketing Act of 1946.” The 2018 Farm Bill authorizes states and the U.S. Department of Agriculture to create plans regulating the production of hemp, but no such plans have been approved yet. Therefore, Idaho argues, the seized hemp was not “produced in accordance with subtitle G,” and is not protected by 10114(b).
Judge Bush agreed with Idaho’s arguments, holding that in the absence of state or federal plans approved pursuant to the 2018 Farm Bill, the hemp at issue was not “produced in accordance with Subtitle G,” and therefore not afforded the interstate commerce protections of the 2018 Farm Bill. Further, the 2018 Farm Bill doesn’t preempt state laws prohibiting cannabis if the cannabis is not produced in accordance with Subtitle G.
This decision should be taken with a measured portion of concern. On the one hand, it is deeply unsettling for the burgeoning hemp industry. Conventional wisdom held that the 2018 Farm Bill would immediately usher in a new era for hemp, which would be legal, protected from state prohibitions by federal law, and freely tradeable. This decision throws cold water on such exuberance — if it stands (which, more below), interstate commerce in hemp will remain risky, especially in states like Idaho that have chosen to aggressively police it. On the other hand, the decision is only the first step in answering the questions raised above. An injunction of the kind sought by Big Sky is an “extraordinary remedy,” which courts are generally reluctant to wield. Big Sky has appealed the decision, and will have another chance to argue its case before the 9th Circuit Court of Appeals. The 9th Circuit covers a broad swath of the west coast, where hemp production is prevalent. Further, there is language in the 2018 Farm Bill to suggest that hemp produced under a license issued by a 2014 Farm Bill pilot program (Oregon has one of the most permissive) may be “produced in accordance with Subtitle G.”
In the interim, anyone transporting hemp across state lines should be very careful about which state lines they cross. The Idaho seizure is not an isolated incident — we’ve seen similar seizures recently in Wyoming, Oklahoma and elsewhere. If you have questions about the production and transportation of hemp, our cannabis team can assist.