Beer Marketer's Insights - Hemp, Cannabis Suits: Virginia Beer Distrib, Ohio Brewer Sued Over Hemp Sales; Wyoming Hemp Law Upheld + More

In ever-swirling storm of hemp-related lawsuits, the rising pressure hemp puts on legal cannabis bizzes finally struck members in each tier of the alc bev biz in Virginia. Suit filed in state court Mon by owners of dispensaries working under state's medical cannabis program claims that sellers of intoxicating hemp products in violation of state law unlawfully cut into their biz. Suit targets a single hemp bev brand, claiming a conspiracy among entire supply chain: brand-owner Coastalo; producer Urban Artifact, an Ohio-based craft brewer; in-state distrib Specialty Bev, a Sheehan Family Co; retailer Total Wine, and delivery co DoorDash. (This story first ran in our sibling beer letter Insights Express yesterday.) The logic behind suit is obvious. Protecting existing legal cannabis bizzes from the threat of competition from hemp products with far lower regulatory bar has been a key policy sticking point in numerous states, leading to attempts to ban hemp products outright in at least a few, including Calif. But alleged violation asserted by owner of the Beyond Hello medical dispensaries in Virginia may not be as intuitive. Coastalo Red Cream Soda bev brand comes in 12-oz cans that each contain 1.4 mg total THC, per certificates of approval (COA) filed by Urban Artifact. But sold as a 4-pk, the 5.65 mg THC exceeds the 2 mg limit on THC per package in state law, according to suit.The dispensaries make no additional claims to suggest these products or cos selling them violate Commonwealth State's hemp or cannabis laws. So case may come down to whether or not court accepts argument that state's THC package limits are appropriately applied to a 4-pk of cans instead of a single can. But lengthy preamble in complaint this week highlights deeper tensions and potential basis for separate claims (tho perhaps not against these players). The sale of intoxicating hemp "undermines the Commonwealth's regulated medical marijuana program," the dispensaries write plainly. They take on significant regulatory burden by operating in that program. But "unlicensed manufacturers, wholesalers, retailers and delivery agents . . . bear none of these costs or obligations," co writes, referring to cannabis licensing, not alc bev licenses.Those hemp marketers also "compete for the same consumers selling untested, unregulated and unlawfully potent intoxicants," suit alleges. That's based on a separate set of assertions about the hemp mkt generally, tho none of them are specifically leveled against any defendants in this suit. "Despite being marketed as lawful," intoxicating hemp products "commonly" violate a variety of other state standards, based on "investigative reports, enforcement actions and independent laboratory analyses," suit claims. That includes having more THC than they claim to have, carrying "misleading" or incorrect labels, plus being "contaminated with pesticides, heavy metals, residual solvents, and other harmful substances due to unregulated production" and "supported by fraudulent Certificates of Analysis." Again, none of those more serious issues at play here, according to complaint. But it raises the specter of such claims showing up elsewhere.10th Circuit Upholds Wyoming Hemp Restrictions; Sup Court Asked to Take Up Big Ticket Cannabis Suit In other hemp and cannabis-related litigation news, yet another state law restricting hemp sales was upheld by a fed court this wk. Note that 4th Circuit Ct of Appeals upheld the Virginia law setting hemp standards identified by plaintiffs in above lawsuit back in Jan. Now it's the 10th Circuit and Wyoming's far more restrictive hemp law, barring use of Delta-8 THC and synthetic cannabinoids, including Delta-9, the Cowboy State Daily reported. Just like in many other states, bizzes sued to toss the restrictions on a number of grounds, including claiming that fed law preempts the state and that the Wyoming law is too vague, restricts interstate commerce, and more. Fed court in Wyoming shot down all those claims last Aug and this wk a panel of appellate judges agreed.Finally, long-expected appeal of a 1st Circuit decision to the Supreme Ct also filed this wk. Back in May, appellate judges agreed with a lower court ruling to dismiss suit by group of Massachusetts-based cannabis bizzes that essentially claimed the feds had abandoned regulating cannabis so current fed prohibition can't be enforced. It's among biggest legal swings to date, attempting to upend or even preclude fed regulation of cannabis, argued by high-profile atty David Boies. This wk, Boies and team asked the Supremes to look at the case. Many expect the high court to take up cannabis in some form or another in coming yrs. Will this be the one?

Hemp, Cannabis Suits: Virginia Beer Distrib, Ohio Brewer Sued Over Hemp Sales; Wyoming Hemp Law Upheld + More

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