Hemp Companies in Maryland Challenge State Officials, Citing Regulatory Plan Threatening Business Survival

LOS ANGELES– A group of hemp companies in Maryland has taken legal action against Governor Wes Moore and several state officials, contending that the regulatory framework approved for the recreational cannabis industry poses a serious threat to their businesses’ viability.

Filed in Washington County Circuit Court on Monday, the lawsuit was brought forth by the Maryland Hemp Coalition and its affiliates, targeting entities such as the Maryland Cannabis Administration, the Maryland Alcohol, Tobacco, and Cannabis Commission, along with specific state officials associated with these agencies, as reported by court records.

According to Fox 45 News, the coalition’s legal challenge argues that the recently enacted adult-use legalization plan not only prohibits the sale of hemp-based goods that these businesses have been lawfully selling for years but also establishes excessively high barriers for obtaining recreational marijuana licenses, making them practically unattainable.

Nevin Young, the attorney representing the plaintiffs, expressed his clients’ concerns, stating, “My clients, who have been lawfully selling these products for years, are suddenly in a position where they are being told they can’t sell their products without a license, and yet the obstacles to get a license are nearly insurmountable.”

Maryland’s new adult-use market officially commenced on July 1, initially granting access only to existing medical marijuana companies within the state. However, the market is expected to open up further in the coming months, first to social equity applicants and subsequently to other businesses, including hemp enterprises.

Nevertheless, the introduction of strict caps on the THC content allowed in non-marijuana products has compelled numerous hemp businesses that were selling delta-8 products and hemp-based CBD goods to shut down their operations at the beginning of this month, as reported by Fox 45 News.

The lawsuit contends that the state’s licensing system confers an unfair advantage upon licensed medical marijuana companies and other permit recipients, describing it as a “classic prohibited monopoly, with the state as a willing profiteer in the system,” according to The Baltimore Sun’s coverage.

Nationwide, the hemp market has been grappling with uncertainty, mainly due to the absence of clear federal guidelines for businesses regarding permissible practices. This has resulted in a patchwork of state-level regulations that, at times, conflict with federal laws, occasionally leading to enforcement actions by agencies such as the Food and Drug Administration.

As the legal battle unfolds in Maryland, stakeholders in the cannabis industry are closely watching the developments, with potential implications for the future of hemp businesses in the state and beyond.