Aug. 15 UPDATE:
On Saturday, a federal judge declined to pause Virginia’s new hemp restrictions after seven businesses challenged the restrictions.
Beginning Saturday, the commonwealth will eliminate the 25:1 CBD-to-THC exception. Products containing over two milligrams of total THC per package can no longer be sold as hemp products in Virginia.
You can read the judge’s full opinion below:
Original Story:
A federal judge heard nearly five hours of arguments Wednesday over whether to temporarily block Virginia’s new restrictions on hemp products, as business owners warned the changes could force them to close and leave them with inventory they can no longer legally sell.
Seven Virginia hemp businesses are challenging the new restrictions in federal court. They are asking U.S. District Judge Robert S. Ballou to temporarily block enforcement before the changes take effect Aug. 15.
The hearing ended Wednesday without a ruling. Attorney Chap Petersen, who represents the businesses, said he expects the judge to decide quickly.
“I honestly, I think the judge will rule by Friday,” Petersen said after the hearing. “I thought he was paying very close attention.”
The lawsuit centers on changes included in Virginia’s budget through House Bill 30. The new restrictions eliminate a 25-to-1 CBD-to-THC exception and generally limit hemp products sold in Virginia to two milligrams of total THC per package.
Products that exceed the new limits could no longer qualify as legal hemp under Virginia law. The businesses challenging the law say that could make much of their existing inventory illegal to sell and threaten the survival of small businesses across the state.
Cody Moorefield, owner of Simply Hemp in Collinsville, was among the business owners who testified during Wednesday’s hearing.
“I’ve invested everything into this business, you know, my life savings,” Moorefield said. “I don’t want to see the state of Virginia crush our small business.”
Moorefield said the uncertainty surrounding the law has made it difficult to plan for what happens next.
“Still not going to be able to get any sleep until we hear what the judge’s got to say,” Moorefield said. “Don’t know when the ruling will come in, hopefully pretty soon. But until then, yeah, we’re kind of still up in the air.”
The businesses are not currently asking the federal court to permanently overturn the law. Instead, Petersen said they are seeking a temporary injunction that would prevent enforcement while the larger constitutional challenge moves forward.
“If we could get an injunction, then my clients would have the ability to sell their inventory, stay in business,” Petersen said. “And I think potentially we could go back to the General Assembly and get this fixed.”
Petersen said the businesses could eventually pursue a full trial on whether the law is unconstitutional if lawmakers do not change it.
“If we can’t get it fixed, then fine,” Petersen said. “We’ll go forward probably early next year and have a trial as to whether or not it’s unconstitutional.”
“But if we can just get that injunction and stay alive, that’s going to give us some breathing space,” he said.
The state argued during the hearing that the businesses had time to prepare for the changes. The state declined to comment following the hearing.
Petersen disputes that argument, pointing to the timing of the legislation.
“The bill wasn’t even signed by the governor until June 29,” Petersen said. “So at that point, you’re already within 45 days of the shutdown day. And so they didn’t have time to prepare for it.”
He said some businesses had already planted their spring hemp crops in April, with harvesting time around October.
“They’re crops that are grown in Virginia, they’re harvested in Virginia to be sold in Virginia,” Petersen said. “And once they’re harvested, once they’re manufactured, they got no other use.”
Petersen said the agricultural nature of the industry makes it difficult for businesses to quickly change course.
“These are crops that are grown in Virginia,” Petersen said. “It’s not like a skill game where you could take a machine out of Virginia or out of South Carolina and move it to Nevada.”
The plaintiffs also argue that the new restrictions create uncertainty over what happens to products that are legal before Aug. 15 but no longer meet the state’s definition of hemp afterward.
Moorefield said that uncertainty could put business owners in a difficult position overnight.
“We could have products on our shelf on the 14th at midnight that were legal,” Moorefield said. “And what do we do with these products?”
“We couldn’t be in jeopardy of being arrested for a hemp product that has changed to a cannabis product at that point,” Moorefield said.
Petersen raised a similar concern about what could happen once the law takes effect.
“Come August 15th, all my clients are going to be facing potential felony charges for simply operating what was a legal business midnight of August 14th,” Petersen said. “And that’s a pretty dangerous place to be in.”
Moorefield said the impact would extend beyond his business.
“Veterans with PTSD, seniors that can’t sleep, people with anxiety, you know, children that have seizures and stuff,” Moorefield said. “So it affects a whole lot in our community.”
Moorefield said some customers have been referred to the store by doctors.
“We actually had doctors that are sending people to us versus putting people on opioids and things like that,” he said. “They come with a natural hemp product.”
The lawsuit raises constitutional claims involving the businesses’ property and investments. Petersen characterized one of those issues as a potential unconstitutional taking, arguing the state could be taking away the value of businesses that were established under the previous rules.
He said the plaintiffs are not asking for that issue to be resolved immediately.
“It’s a taking,” Petersen said. “But you’re not asking that the law be repealed.”
“At this point, I’m just asking for an injunction,” he said.
If the court ultimately determines the law is unconstitutional, Petersen said the state could face the possibility of compensating affected businesses.
“If we can’t get it fixed, then fine,” Petersen said. “We’ll go forward probably early next year and have a trial as to whether or not it’s unconstitutional. And, you know, the state of Virginia can write a check.”
But Petersen said he would prefer to see the issue resolved through the legislative process.
“I do really believe, and I had 16 years in the state Senate, that if we went back to the General Assembly, both Republicans and Democrats, and said, hey, this is a small business,” Petersen said. “They’re providing jobs, they’re providing medicinal benefits. Why are we putting them out of business?”
Petersen also criticized what he described as a lack of communication from Virginia’s new cannabis regulatory agency.
“Here we have an agency that’s supposed to be regulating an industry, and there’s been no communication, there’s been no regulations,” Petersen said. “You would have thought that they would have come out with some type of policy paper or some type of town hall and said, ‘Hey, here’s what you need to do. Here’s what’s going to happen August 15th,’” he said. “And instead it’s been radio silence.”
The Cannabis Small Business Association, which is supporting the lawsuit, has described the restrictions as a major threat to Virginia’s hemp industry.
The association cited a 2023 Whitney Economics study that estimated Virginia stores selling hemp-derived cannabinoids generated approximately $1.17 billion in total sales in 2022. The study estimated $562.2 million came from CBD and converted cannabinoid products and projected a broader economic impact of about $3.27 billion.
Those figures are based on 2022 survey data.
Moorefield said the restrictions could also affect Virginia manufacturers whose products are sold by retailers like his.
“A lot of products that’s on my shelf are from these Virginia manufacturers,” Moorefield said. “They’ve followed all the feedback regulations and made some really great products. Virginia pivoted. These guys stepped up and made products that still could help people here.”
He said the new restrictions could make those products illegal to sell.
Virginia’s new restrictions are part of a broader shift toward regulating intoxicating hemp-derived products as the state prepares for its regulated adult-use marijuana market. The changes remove the previous 25-to-1 CBD-to-THC exception and impose a two-milligram total-THC-per-package limit for most hemp products. The businesses argue the transition is happening too quickly and could wipe out companies that invested under the previous rules.
The immediate question is whether Ballou will grant the temporary injunction before the Aug. 15 deadline.
If granted, the businesses would have additional time to sell existing inventory and potentially seek changes from the General Assembly while their broader lawsuit continues. If denied, the new restrictions are scheduled to take effect Saturday, though the underlying constitutional lawsuit could continue.
Moorefield said even a temporary reprieve would give his business an opportunity to adjust.
“At the minimum, that would be our hope is that we have more time to kind of do this,” Moorefield said.
But he said the long-term goal is to preserve a place for hemp businesses in Virginia.
“The long-term goal is hopefully that we can get Virginia to see that this can be done a different way, that hemp can coexist,” Moorefield said. “We just don’t need to destroy small businesses in Virginia.”
Petersen said he appreciated the court giving the businesses an opportunity to present their case.
“It’s nice to have a day in court because, again, we didn’t have that during the legislative process,” he said.
For now, business owners like Moorefield are waiting for the judge’s decision, with the new restrictions scheduled to take effect Saturday.
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