Companies fail to enjoin Virginia hemp-related law

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Where companies argued that federal law preempted Virginia’s prohibitions on the manufacture and sale of hemp products in the commonwealth that contain higher concentrations of tetrahydrocannabinol, or THC, but the federal statute expressly allows states to enact “more stringent” regulations of hemp production, the companies’ motion for injunctive relief was denied.

Background

Northern Virginia Hemp and Agriculture LLC, Rose Lane and Franny’s Operations Inc. move the court to enjoin defendants from implementing or enforcing those provisions of Virginia law that impose a limit on substances containing THC according to their concentration of “total THC” or a “synthetic derivative of THC,” instead of the concentration of delta-9 THC as defined in the Agriculture Improvement Act of 2018, and from implementing or enforcing those portions of Virginia law that restrict the interstate commerce of hemp.

Likelihood of success

In plaintiffs’ view, Congress “legalized hemp solely according to its concentration of delta-9 THC and mandated that the interstate commerce in hemp as so defined could not be inhibited by the States,” and thus did not allow states to impose a stricter standard for industrial hemp. This argument ignores the express permission granted to states and Indian tribes in the Farm Act to enact “more stringent” regulations of hemp production. Virginia did just that when its legislature made the decision to regulate the manufacture and sale of hemp products in the commonwealth that contain higher concentrations of THC.

Plaintiffs further argue that Virginia Code § 3.2-4116(C) is expressly preempted by the Farm Act. This argument fails because by not having pleaded sufficient facts showing that they are Virginia “processors” subject to potential enforcement under § 3.2-4116(C), none of these plaintiffs have standing to raise this argument. And plaintiffs’ field preemption argument ignores the clear text in the Farm Act that expressly grants states the authority to regulate hemp production by empowering them to enact more stringent regulations than that provided by federal law.

Next, plaintiffs assert a theory of conflict preemption premised on the notion that SB 903 stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress in passing the Farm Act. This court finds that with respect to the regulation of the production and sale of hemp products containing varying amounts of delta-8 THC or other THC variants manufactured and sold in Virginia, SB 903 is not in conflict with the Farm Act either through theories of impossibility or obstacle
preemption.

Although plaintiffs appear to raise claims under the Constitution’s Commerce Clause and Dormant Commerce Clause, their arguments rely nearly exclusively on a Dormant Commerce Clause violation by alleging that SB 903 impedes the interstate commerce of industrial hemp. This challenge to SB 903 fails for multiple reasons.

First, this is another attempt by plaintiffs to challenge the commonwealth’s decision to control the production of industrial hemp within its borders, which the Farm Act has expressly said the commonwealth may do. Second, the Sales Restriction provision is a condition for registration imposed on licensed Virginia hemp processors; it does not have enforcement reach outside of the commonwealth. Third, the alleged burdens on interstate commerce are incidental and plaintiffs have not alleged any facts showing that this provision of SB 903 was motivated by a desire to undertake economic protectionism or to discriminate against out-of-state hemp businesses.

Irreparable harm

Plaintiffs’ allegations of harm are undercut by the delay with which they undertook filing this civil action to enjoin enforcement of SB 903. Moreover plaintiffs’ argument as to potential criminal liability is not supported by the relevant provisions in SB 903.

Remaining factors

Defendants have demonstrated that delta-8 THC is a credible threat to the Virginia population, and there is a strong public interest in protecting the citizens of the commonwealth from substances like delta-8, including a vulnerable population, such as children, from hospitalizations and poisonings. The decision to advance that interest was made by the elected policymakers of Virginia, and this court must defer to those political and social welfare judgments.

Moreover plaintiffs have failed to demonstrate that there is a likelihood they will be successful on either their preemption or constitutional claims, which undermines the majority of the reasons they have proffered to support the third and fourth factors.

Plaintiffs’ motion for preliminary injunction denied.

Northern Virginia Hemp and Agriculture LLC v. Commonwealth of Virginia, Case No. 1:23-cv-1177, Oct. 30, 2023. EDVA at Alexandria (Brinkema). VLW 023-3-697. 27 pp.