Earlier this week, I wrote about how hemp organizations ought to not however rely on the 2018 Farm Bill to shield them from their goods becoming seized. This is for the reason that despite the fact that 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 feasible for the reason that the US Division of Agriculture (“USDA”) has however to approve of any state or tribal plans covering the cultivation of hemp or concern 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 nonetheless governed by the 2014 Farm Bill, which makes it possible for state departments of agriculture to license the cultivation of industrial hemp. States have taken a broadly diverse strategy to regulating industrial hemp and not all states recognize any distinction among 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 have to very carefully take into consideration how their goods attain buyers. For instance, picture that Hemp Co. is preparing to distribute Hemp- CBD. Hemp Co. sources its industrial hemp from a farm in Medford, a modest town in Southern Oregon. Hemp Co. has a significant order to fill for a organic meals retailer in Billings, Montana. Hemp Co. decides that the quickest and least expensive strategy of delivery is ground shipping by means of Idaho. Even so, according to a 2015 informal opinion from the Idaho Lawyer Basic, the state tends to make no distinction among industrial hemp and marijuana. Thus, Hemp- CBD, even devoid of the presence of THC, is not permitted in Idaho. Even even though Hemp Co.’s goods come from a farmer who cultivates in-line with Oregon’s industrial hemp system (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 true life as the Idaho State Police not too long ago seized a shipment of industrial hemp traveling from Oregon to Aurora, Colorado.
Significant Sky is a Colorado business that processes hemp into CBD powder which it then sells to producers who add CBD to a quantity of diverse customer goods. Significant Sky bought 13,000 pounds of hemp from a permitted hemp cultivator in Oregon. Significant Sky contracted with a third celebration logistics business 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 truth 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.
Significant Sky’s attorneys filed suit in US District Court in Idaho. Significant Sky is searching for a declaratory judgment stating that Idaho Police improperly seized Significant Sky’s correctly and are improperly holding the house 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. Significant Sky also filed a motion for a short-term restraining order (TRO) and preliminary injunction to force the Idaho State Police to straight away return the seized hemp.
In order to get emergency relief in the type of an injunction or TRO, a celebration have to show that they are probably to succeed on the merits of the underlying case. The Court determined that Significant Sky had not met this burden for the reason that it is unclear irrespective of whether Section 10144 of the 2018 Farm Bill covers the seized hemp at concern. The Order denying Significant Sky’s claims states the following
The takeaway from an examination of the respective arguments of Significant Sky and the [Idaho State Police] is that a affordable argument can be created that even even though Significant Sky may well, at some point in time, be capable to acquire industrial hemp that has been “produced in accordance with Subtitle G,” the hemp that was seized in Idaho could not possibly meet that common for the reason that 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 produced 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 irrespective of whether Significant Sky was afforded protection beneath Section 10114 of the 2018 Farm Bill. Alternatively, it is saying that Significant Sky has not however shown a higher likelihood that it prevail on the merits and consequently 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.
Significant Sky will no doubt argue that the 2018 Farm Bill does avert Idaho from interfering with this shipment. Although 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. Also, Significant 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 Significant Sky’s case against the Idaho State Police. In the meantime, be pretty cautious about how you ship hemp goods.