Federal judge again denies request to block Iowa’s hemp law

DES MOINES — A federal judge has again denied a request from manufacturers and retailers of hemp consumer products to temporarily block a new Iowa law regulating hemp consumer products and the potency of THC in the state.

Judge Stephanie Rose of the Southern District of Iowa said in two rulings Friday that the companies failed to prove the law violates the U.S. Constitution.

The law, which state lawmakers passed this year and took effect July 1, limits the amount of THC — the main intoxicating chemical in cannabis — that can be found in “consumable hemp” products that are legal under federal law.

A product may not contain more than 4 milligrams per serving and 10 milligrams per package and must carry a warning label.

The law also prohibits the sale of synthetic consumer hemp products and prohibits the sale of consumer hemp to minors.

The state Department of Health and Human Services finalized rules for enforcing the law this month, defining some terms that companies said were too vague to enforce.

The rulings related to two lawsuits: one by THC beverage makers Climbing Kites and Field Day Brewing, and the other by a group of retailers and manufacturers of hemp consumer goods.

The companies challenged the law on a number of grounds, including that it was repealed by the federal Farm Bill, that the law was unconstitutionally vague, and that the law violated rules on interstate commerce and seizure of property.

This means that the law will remain in effect for now, but litigation is likely to continue.

Judge: Rules put an end to ambiguity

Both groups argued that the law was too vague to be enforced because it failed to define key terms such as “serving,” “packaging,” “synthetic hemp for human consumption,” and the warning label that must appear on products.

Climbing Kites and other beverage manufacturers had expected to be able to change their labels to say that a 12-ounce can contained more than one serving, allowing them to put up to 10 milligrams of THC in a can. But HHS rules state that a 12-ounce can can contain no more than one “serving,” meaning a can can contain up to 4 milligrams of THC per can.

Rose, the federal judge, raised concerns about the vagueness of the definition of “serve” early in the litigation, but she wrote in her orders that the new rules defined the terms and cleared up previous confusion, meaning there is no basis to challenge the law for its vagueness.

“Now that the final rules have been promulgated and are in effect, there is no longer a tenable argument that ‘serve’ as defined in the Hemp Amendments is an unconstitutionally vague term,” she wrote.

The companies also argued that HHS can arbitrarily enforce the standards and reject some products that should be allowed under the law. The judge said that even if the law is applied incorrectly, that does not mean it is unconstitutionally vague.

“The crux of the issue is not whether the law can be arbitrarily enforced, but whether the language is clear enough not to invite arbitrary enforcement,” she wrote.

Rose also ruled that the short period during which manufacturers and retailers had to comply with the law (six weeks between signing and taking effect) did not violate any constitutional norms.

She said the companies’ argument that they did not have enough time to adapt to the new standards was “essentially a claim of what would be better for their business”.

The companies suing the state say the law has wiped out the vast majority of products, with many having to close one or more locations as sales plummeted.

“It’s absolutely devastating to the entire industry,” Lacie Navin, who runs hemp products stores in Des Moines and is a plaintiff in the case, said in an interview earlier this month.

“Over 70 percent of our products are off-the-shelf, most of which are non-intoxicating products, simply because no one who makes legislation understands how these formulations work.”