Cajun Cannabinoid Amendments Not Spared from Spate of Legal Challenges

With certain hemp operators and trade groups enjoying varying degrees of success challenging new state laws and regulations governing intoxicating hemp products, copycat lawsuits are being filed around the country, including, most recently, in Louisiana. On October 18, 2024, the Hemp Association of Louisiana and operator Cypress Hemp, LLC (the “Plaintiffs”) filed a complaint for declaratory and injunctive relief in the US District Court for the Middle District of Louisiana seeking to invalidate parts of Act No. 752 of the Louisiana Legislature’s 2024 Regular Session (“Act 752”), which amends the Louisiana Consumable Hemp Act. According to the Plaintiffs, Act 752 attempts to “recriminalize certain hemp-derived cannabinoid products and obstruct the shipment and transportation of the same, in direct conflict with well-established federal laws encouraging the redevelopment of a domestic supply chain of hemp and hemp products in Louisiana and across the country.”

In support of their request to prevent enforcement of Act 752, the Plaintiffs asserted that the new hemp amendments would essentially eliminate a market that farmers, small business owners and consumers have relied upon over the last five years, which, in turn, 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.” As background, Act 752, which, absent judicial intervention, will become effective on January 1, 2025:

1. Requires a permit for any person engaged in processing, distributing, selling or offering for sale any consumable hemp products in Louisiana.
2. It prohibits the retail sale of consumable hemp products to anyone under the age of 21 and also imposes age verification requirements on retailers.
3. Prohibits the retail sale of consumable hemp products at gas stations (except for qualified truck stop facilities licensed pursuant to La.R.S. § 27:417).
4. Prohibits the processing, distribution or sale of any consumable hemp product that has not received approval from the Louisiana Department of Health.
5. Imposes product-specific limits on total THC per serving.
6. Imposes new consumable hemp product label requirements.
7. Requires a Certificate of Analysis from an independent testing laboratory as a condition for approval and registration of consumable hemp products.

Most critically, Act 752 would also redefine “industrial hemp” under state law to mean cannabis with a total THC concentration of not more than 0.3 percent on a dry weight basis. This is a departure from the current definition, which, mirroring the parallel Farm Bill definition, refers only to total delta-9 THC concentration.

For our readers who have been following along over the past several months, many of the legal arguments advanced by the Plaintiffs in their five-count speaking complaint ring a familiar tune. No doubt observing how federal and state courts across the country have recently wrestled with the tension between the 2018 Farm Bill and efforts by states to regulate intoxicating hemp production and distribution, the Plaintiffs did not recreate the wheel but rather recycled the now customary federal preemption, dormant commerce clause, and due process/void for vagueness claims.

Germane to the federal preemption count, the Plaintiffs took issue with the state’s modification of the threshold definition of “industrial hemp” because, by application of the new definition, “once a derivative, extract, or other downstream hemp product contains more than 0.3 percent total THC on a dry weight basis, it is no longer industrial hemp for purposes of consumable hemp products.” As a result, the Plaintiffs asserted that such products would no longer qualify for the recognized exemption from the state’s Uniform Controlled Dangerous Substances Laws and would, therefore, become Schedule 1 controlled substances under state law. In plain terms, following the effective date of Act 752, the mere possession of products with greater than 0.3 total THC “would be illegal to possess [in Louisiana], and individuals who purchased them in a state that defines hemp according to the 2018 Farm Bill and transported the products through Louisiana would be subject to criminal prosecution” even though such activity is expressly protected under federal law. According to the Plaintiffs, Act 752 conflicts with the plain and unambiguous language of the 2018 Farm Bill and is therefore preempted.

The Plaintiffs gave short shrift in their complaint to the dormant commerce clause count, asserting only that “Act 752’s effective recriminalization of Farm Bill Products, and its implied prohibition on the transportation of all such hemp products, is a substantial burden on interstate commerce in violation of the Commerce Clause of the Constitution of the United States as there is no federal license to transport finished hemp products.” However, the Plaintiffs gave significant shelf space to the due process/void for vagueness count asserting, among other arguments:

1. That Act 752’s redefinition of “industrial hemp,” which eliminates any reference to total delta-9 THC, makes Act 752 unconstitutionally vague such that a person of average intelligence is incapable of discerning whether products with more than 0.3% total THC, but less than 0.3% delta-9 THC are Schedule I controlled substances. Indeed, the Plaintiffs alleged that determining “when and to what extent Act 752 applies to Plaintiffs is difficult for even a well-trained lawyer to understand.”
2. That following the effective date of Act 752, Louisiana law will have three separate definitions for “Industrial Hemp” – one in each of the state’s Industrial Hemp Act, Consumable Hemp Act and Uniform Controlled Dangerous Substances Laws.
3. That certain provisions of Act 752 are internally contradictory. In particular, the Plaintiffs cite § 1483B(6)(b)(i), which states that “[a] single serving of a consumable hemp beverage shall not exceed five milligrams and shall not be less than twelve ounces.” Although the Louisiana legislature presumably intended to mean “not exceed five milligrams of total THC,” that is not what Act 752 says. The Plaintiffs seized on this apparent oversight and rhetorically inquired how a product could simultaneously not exceed five milligrams but also be not less than twelve ounces.

The defendants in the lawsuit – Louisiana Governor Jeff Landry, Louisiana Attorney General Liz Murrill, and District Attorney for East Baton Rouge Parish Hillar Moore, III, each in their official capacities – have yet to respond to the Plaintiffs’ complaint. We will keep you updated as this case progresses and the District Court for the Middle District of Louisiana readies itself to become the latest court to weigh in on the limits of state authority to regulate intoxicating hemp products.

https://www.jdsupra.com/legalnews/cajun-cannabinoid-amendments-not-spared-1454974/