Smokeable Hemp - Off Again in Indiana

Last month, the Seventh Circuit overturned an injunction meant to halt an Indiana law which bans smokeable hemp. This puts the law back in play unless and until a more narrow injunction is entered.

The 2018 Farm Bill removes hemp from the federal schedule of controlled substances and allows States to regulate hemp production based on a state or tribal plan. The 2018 Farm Bill defines hemp to include “the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol [THC] concentration of not more than 0.3 percent on a dry weight basis.” 7 U.S.C. § 1639o(1). Indiana law uses the same definition. I.C. § 15-15-13-6.

Last year, Indiana legalized the commercial growing and production of hemp and set up a regulatory process to license growers and processors. The law banned the manufacture, finance, delivery, and possession of “smokable hemp,” defined as a product containing not more than 0.3% delta-9 THC, in a form that allows THC to be introduced into the human body by inhalation of smoke and includes hemp bud or hemp flower. I.C. § 35-48-1-26.6. Under the statute, a person who knowingly manufactured, financed, delivered, or possessed “smokeable hemp” would have committed a Class A misdemeanor. I.C. § 35-48-4-10.1.

A group of hemp sellers challenged the law, arguing the ban on smokeable hemp was preempted by the 2018 Farm Bill’s mandate that says states must allow all hemp to be transported through via interstate commerce. On September 13, 2019, the Southern District of Indiana granted a preliminary injunction that enjoined the state from enforcing the statute that criminalized smokable hemp. See CY Wholesale v. Holcomb, 2019 WL 7497135 (S.D. Ind. Sept. 19, 2019). The state appealed this decision to the Seventh Circuit Court of Appeals.

On July 8, 2020, the Seventh Circuit overturned the injunction, holding the injunction “sweeps too broadly,” and ordered the case back to the Southern District for further proceedings. The Seventh Circuit noted, however, that just because this injunction was too broad, “we should not be misunderstood as saying that a properly tailored injunction is not warranted.” This could mean that while a total ban on smokeable hemp is likely preempted by the federal Farm Bill, a more narrow ban, such as one that focused on growing instead of transportation or possession, would work. The Seventh Circuit explained:

“It may well be that Indiana, in proscribing the possession of industrial hemp, has illegally prohibited the transportation of interstate shipments of industrial hemp. Should that be the case, the district court may appropriately issue an injunction preventing Indiana from enforcing its law against those transporting smokable hemp through Indiana in interstate commerce. A state cannot evade the Farm Law’s express preemption of laws prohibiting the interstate transportation of industrial hemp by criminalizing its possession and delivery.”

We’ll learn more as that case continues in the district court. For now, smokeable hemp is illegal in Indiana.