US Federal Judge Upholds Virginia Hemp Regulations Amid Lawsuit

• A federal judge has ruled against a group of hemp manufacturers, sellers, and processors in their bid to block Virginia's new hemp regulations.
• The regulations eliminate a provision allowing retail hemp products to contain more than 2 milligrams of THC per package if they contained at least 25 times as much CBD.
• Judge Ballou ruled that the regulation does not require existing inventory to be surrendered, transferred, or destroyed.
• The plaintiffs claimed that the regulations would outlaw up to 85% of their products and cause significant economic harm.
• The case highlights the ongoing regulatory challenges facing the hemp industry in Virginia.

Judge Ballou ruled that the regulation merely imposes restrictions on the sale of certain property and does not leave the plaintiffs without economic value.

A federal judge has ruled against a group of hemp manufacturers, sellers, and processors in their bid to block Virginia's new hemp regulations. The regulations, set to take effect on Saturday, eliminate a provision allowing retail hemp products to contain more than 2 milligrams of THC per package if they contained at least 25 times as much CBD. This change is aimed at restricting delta-9 products, which the plaintiffs claim will devastate their businesses. According to the plaintiffs, the regulations would outlaw up to 85% of their products, causing significant economic harm. However, U.S. District Judge Robert Ballou disagreed with this interpretation, ruling that the regulation does not require existing inventory to be surrendered, transferred, or destroyed.

The plaintiffs argued that the regulations amount to a taking in violation of the Fifth Amendment's Takings Clause, as applied to states through the 14th Amendment. They claimed that the rules would effectively outlaw their products, causing them to lose economic value. However, Judge Ballou ruled that the regulation merely imposes restrictions on the sale of certain property and does not leave the plaintiffs without economic value. The judge also noted that the Takings Clause rarely applies to takings under the government's police power, which is what Virginia used to enact the regulations. Additionally, the plaintiffs argued that the regulations violate the 14th Amendment's Due Process Clause, claiming that they were passed through a closed-door conference report without proper committee hearings or industry input.

The ruling has significant implications for the hemp industry in Virginia. While the plaintiffs claimed that the regulations would devastate their businesses, Judge Ballou's decision allows them to continue selling compliant products and sell off their existing inventory. This means that lawyers advising clients on compliance with Virginia's new hemp regulations can provide guidance on how to navigate these changes without having to surrender or destroy existing inventory. The case also highlights the ongoing regulatory challenges facing the hemp industry, which is still evolving under federal and state laws.

Lawyers advising clients on compliance with Virginia's new hemp regulations should note that the regulations do not require existing inventory to be surrendered, transferred or destroyed, and businesses can continue selling compliant products.

Source: Original reporting via Courthouse News