A new Ohio law prohibiting intoxicating hemp products took effect on March 20, but law enforcement has been advised to pause enforcement efforts. Sandusky County Common Pleas Court Judge Jeremiah Ray issued a temporary restraining order (TRO) on March 24, preventing the Fremont Police Department and associated officials from enforcing the statewide ban outlined in Senate Bill 56, which Governor Mike DeWine signed into law in December.
Legal Context and Implications
Senate Bill 56 aligns Ohio’s definition of intoxicating hemp products with an anticipated federal ban set to take effect on November 12. However, the law grants “exclusive” rights to licensed cannabis businesses in Ohio to sell specific intoxicating hemp products that remain federally legal for over seven months, according to Judge Ray’s TRO.
The judge pointed out that the law creates discriminatory conditions: out-of-state hemp products will be illegal in Ohio, exposing sellers to felony charges, while favored cannabis businesses will operate freely under the new regulations. This raises concerns regarding a potential challenge based on the dormant Commerce Clause.
Litigation Background
The lawsuit was initiated by North Fork Distribution I LLC, a Seattle-based manufacturer doing business as Cycling Frog, which specializes in hemp-derived THC and CBD products. Cycling Frog is also part of another lawsuit contesting Governor DeWine’s line-item veto on S.B. 56, which eliminated a provision allowing cannabinoid hemp beverages to remain in Ohio’s market until the end of 2026. The company estimates potential losses of about 20% in business-to-business sales in Ohio due to this legislative change.
The TRO will remain effective until April 28, fully protecting Cycling Frog and associated third-party entities, including distributors and logistics firms.
Future Developments
Cycling Frog’s attorney, Andrew Mayle, filed a motion on March 30 for class action certification, which could impede the enforcement of S.B. 56 throughout the state. Mayle indicated that if the judge approves the motion, the bill may become unenforceable concerning the traditional hemp industry.
In the TRO, Judge Ray noted that the new law unfairly benefits licensed dispensaries by eliminating competition from both in-state and out-of-state sellers of federally legal hemp products. This situation obligates Ohio residents wishing to access these products to financially support the in-state cannabis industry, which operates under federal restrictions.
Ohio Attorney General Dave Yost filed a motion to intervene in the case on April 3, with a court hearing scheduled for April 9. This ongoing legal situation is especially relevant for the cannabis industry, as it may have lasting effects on licensing, regulation, and market opportunities in both Ohio and Mississippi.