Indiana Hemp Litigation Update
Midwest Hemp Council has been at the forefront of educating farmers, small businesses, consumers, policymakers and law enforcement on the need for enhanced consumer protections in Indiana's hemp market. The best approach, as demonstrated by states like Kentucky, Tennessee, Georgia and Florida, involves a four-pillar strategy universally supported across the hemp industry.
This four-pillar approach codifies industry best practices, including appropriate age restrictions coupled with uniform packaging, labeling and independent testing requirements. These industry best practices ensure adults can trust the label on their favorite products and prohibit packaging that is attractive to minors and confusing to adults. Unfortunately, bipartisan legislation that has been filed every year since 2020 has not made it across the legislative goal line in Indiana. The industry-wide calls for additional consumer protections have been ignored to date.
In January of 2023, the Indiana Attorney General released an Official Opinion that erroneously declared that low-THC hemp products were illegal controlled substances, despite being sold in the state since 2018 pursuant to Ind. Code 24-4-22. As a direct result of the erroneous Official Opinion, small business owners around the state received, and continue to receive, threatening letters from local prosecutors with a startling message—stop selling hemp products or face criminal penalties. The Official Opinion has created a culture of confusion for farmers, consumers and law enforcement - with no end in sight.
In June 2023, after bipartisan legislation pending in the Statehouse failed to become law, Midwest Hemp Council, along with members 3Chi and Wall’s Organics, filed a federal complaint challenging the accuracy of the Official Opinion. The goal of this litigation is to receive an answer as to whether or not the Official Opinion is an accurate interpretation of federal and Indiana hemp laws.
Yesterday, there was a positive development as the court recognized the Attorney General as a proper defendant and is allowing our federal claims to move forward, while dismissing the other local defendants. This marks a significant step forward for Indiana's hemp industry in its battle against big government overreach. Further good news is found in the court’s characterization of the current legal landscape for hemp and hemp products under federal and Indiana law:
“Marijuana is a controlled substance; hemp is not. The Agriculture Improvement Act of 2018 ("2018 Farm Bill"), signed into law by President Donald Trump, expanded the definition of "hemp" to include "all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis." 7 U.S.C. § 1639o(1). Therefore, as long as the concentration of delta-9 is less than or equal to 0.3% on a dry weight basis, the substance is hemp; if it is more than 0.3%, the substance is marijuana. These substances with not more than 0.3% concentration are also known as low THC hemp extracts. Indiana followed Congress's lead: in 2019, such that Senate-Enrolled Act 516 ("SEA 516"), signed into law by Governor Eric Holcomb, adopted the 2018 Farm Bill definition of hemp. This has the effect of exempting low THC hemp extracts from the definition of marijuana and other THCs, which are Schedule I controlled substances under both Indiana and federal law. Ind. Code § 35-48-2-4(d)(22), (32); 21 U.S.C. § 812(c)(c)(10), (17).”
The court will rule on the pending dispositive motions after they have been briefed. There is no certain timeline of a ruling, but we will continue to keep you updated as information becomes available.
TLDR: The United States District Court for the Southern District of Indiana ruled that the Indiana Attorney General is a proper defendant and is allowing the federal claims against him to proceed in regard to the pending litigation over the Official Opinion issued in January of 2023.