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Federal Judge’s ‘Watershed’ Ruling Protects Hemp Industry in Arkansas

3 min read

A federal judge’s ruling last month that blocks Arkansas from criminalizing certain hemp-derived cannabinoid products, such as delta-8 THC, is being hailed as a landmark decision for the hemp industry.

U.S. District Court Judge Billy Roy Wilson’s order prevents Arkansas from enforcing Act 629, which passed during the 2023 regular legislative session.

“Judge Wilson’s order represents an important watershed moment for the hemp industry,” attorney Abtin Mehdizadegan of the Little Rock office of Hall Booth Smith, who represented the plaintiffs, said via email. “The order only applies to Arkansas; however, we hope and expect that other states with similarly misguided ideas about banning industrial hemp products will take note.”

Abtin Mehdizadegan

The plaintiffs who challenged the act as unconstitutional include companies that grow, distribute and sell retail hemp plants and hemp products.

Act 629 narrowed the definition of hemp “to recriminalize the possession, manufacturing, transportation, and shipment of certain popular hemp-derived cannabinoid products,” the plaintiffs said in their lawsuit, filed in U.S. District Court in Little Rock. The plaintiffs said they feared that if the state law wasn’t blocked, it “would lead to thousands of lost jobs around the state and turn farmers, business owners, and consumers — including Plaintiffs — into criminals overnight, despite no change in federal law.”

One of the plaintiffs, The Cigarette Store LLC, which operates as Smoker Friendly of Boulder, Colorado, said it has 58 retail stores in Arkansas that offer, among other things, low-THC hemp extract products, such as delta-8.

The company’s senior vice president said in a declaration filed in the case that its employees and members were “in jeopardy of criminal prosecution” under Act 629 in connection with shipping, handling or selling low-THC hemp extract products in Arkansas. The law went into effect Aug. 1.

The other plaintiffs are Bio Gen LLC of Fayetteville, Drippers Vape Shop LLC of Greenbrier and Sky Marketing Corp., which operates as Hometown Hero, of Austin, Texas.

The plaintiffs named Arkansas officials, including Gov. Sarah Huckabee Sanders, Attorney General Tim Griffin and prosecuting attorneys as defendants.

The plaintiffs said the Arkansas law is unconstitutional because Act 629 is in conflict with the federal 2018 Farm Bill, which removed hemp from the federal schedule of controlled substances.

The plaintiffs asked Wilson for a preliminary injunction preventing Arkansas from enforcing the law and to say that Act 629 is void.

Wilson agreed and issued a preliminary injunction and said in his 17-page order that the plaintiffs have shown they have a likelihood of success in their lawsuit. Wilson also said the plaintiffs suffer “a credible threat of criminal prosecution” that could affect their ability to obtain a license to grow or handle legal hemp as well as an untold amount of lost profits.

Wilson denied the defendants’ motion to dismiss the case. A bench trial is set for Sept. 7, 2024.

Attorney General Griffin said in a statement to Arkansas Business that he was disappointed with the ruling. “We’re considering all our options and will continue to aggressively defend the law to protect Arkansans from these dangerous drugs,” he said.

Rod Kight, an international cannabis lawyer based in Asheville, North Carolina, called Wilson’s decision a “landmark ruling.”

“Due to its broad findings, the ruling arguably makes this the single most important hemp case to date and one that every participant in the hemp industry should read,” Kight wrote in his Sept. 8 blog. “It is not an overstatement to say that every state law that defines hemp differently from federal law or that restricts downstream hemp products based on anything other than their delta-9 THC concentrations is now in jeopardy … .”

Delta-8 and delta-9 are different products, and delta-8 is less powerful.

The plaintiffs also were represented by attorneys Justin Swanson and Paul Vink of Bose McKinney & Evans LLP of Indianapolis and attorneys Allison Scott and Joseph Stepina of the Little Rock office of Hall Booth Smith.

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