Federal judge to hear arguments against Iowa hemp law in July 11 injunction hearing

A federal judge has set a July 11 hearing on a request by eight Iowa companies to block a new state law restricting sales of consumable hemp products that contain hemp-derived tetrahydrocannabinol, or THC.

Two other companies, Climbing Kites of Des Moines and Field Day Brewing of North Liberty, makers of beverages that contain THC from hemp, lost June 28 in their first attempt to win an injunction. They have since revised and refiled their request, and U.S. District Judge Stephanie Rose said it will be considered at the same hearing as the other companies'.

The law, known as the Hemp Amendments, took effect Monday, forbidding the sale of the products unless they comply with its requirements. But the state Department of Health and Human Services has yet to clearly define some of those requirements, so the businesses said they halted sales rather than risk criminal prosecution.

Some told the Des Moines Register they had to lay off employees, cut their hours and, in one case, closed a location to compensate for the losses.

The DHHS had said it will be mid-July before it determines what the law will require — specifically, the size of a serving, which the law says can contain no more than 4 milligrams of THC, and what must appear on a required warning label. It could take another month to promulgate the rules, the department said.

The bill also bans the sale of consumable hemp products and beverages to people under age 21.

The lawsuits say the situation leaves the companies in a regulatory limbo.

When the law gained final legislative passage in early April, Sen. Dan Dawson, R-Council Bluffs, called it "desperately needed regulation" for both the industry and consumers. He said the potency limits were a necessary distinction between recreational and medical use under Iowa's medical cannabidiol program.

"There has to be some type of guardrails on here," Dawson said.

'The Iowa hemp industry is in a fight for its life'

In addition to Field Day, maker of Day Dreamer THC sparkling water, and THC-infused seltzer maker Climbing Kites, a joint venture of Lua and Big Grove brewing, the eight companies suing the state are HW Premium CBD of Urbandale; American Shaman of Altoona, West Des Moines and Indianola; Green Goods Market & Greenhouses of Jefferson; Your CBD Store, a national franchise with a West Des Moines store; Beyond CBD of Des Moines; Campbell’s Nutrition Centers of Des Moines; Sky High of Cedar Falls; and ICanna CBD of Ames.

In a Tuesday news release, the companies said the new state law violates the supremacy clause of the U.S. Constitution, citing the 2018 federal farm bill, which legalized the production of hemp products. The companies also said the law violates the Fifth Amendment and the 14th Amendment's taking clause.

HW Premium CBD Owner Rick Wagaman said in the news release that the state could have restricted people under age 21 from purchasing consumable hemp products without imposing the other restrictions.

"We believe Iowa’s Hemp Amendments are unconstitutional,” Wagaman said. "The farm bill defines clearly what hemp is, and it has an express preemption clause that forbids exactly the kind of thing the state of Iowa is attempting to do here.”

“The Iowa hemp industry is in a fight for its life, and that fight comes to a head on July 11th, at the preliminary injunction hearing,” Ashley Powell, owner of American Shaman, also said in the release.

Rose, in denying Climbing Kites' and Field Day's initial request for an inunction, said their primary argument — that federal law preempts the state law — is not supported by the evidence. But Rose noted she had "serious concerns" that the law may be unconstitutional because it limits the amount of THC in a single serving without defining the size of a serving.

“It is unclear how this provision would be enforced,” Rose wrote.

Philip Joens covers retail and real estate for the Des Moines Register. He can be reached at 515-284-8184, pjoens@registermedia.com or on Twitter @Philip_Joens.

This article originally appeared on Des Moines Register: Hearing set for July 11 on new injunction against Iowa hemp law