Federal Court Refuses (for now) to Order Return of 7,000 Pounds of “Hemp” Seized by State Police
In late January 2019, Idaho state police seized a shipment of nearly 7,000 pounds of cannabis plant material on its way from Oregon to Colorado. They have also charged the driver of the truck with felony marijuana trafficking. See coverage of the case at CNN.com, here, and at the Idaho Statesman, here.
The case raises several interesting legal questions involving the application of the 2018 Farm Bill. I have already discussed the Farm Bill in some detail. See New Congressional Farm Bill Legalizes Some Marijuana. Here, I will address the questions posed by the Idaho case. But first, let me provide some additional background.
The plant material in the truck belonged to Big Sky Scientific (BSS), a Colorado-based CBD wholesaler. BSS claims the material is lawful “hemp”, and not marijuana, because it has a low THC content. Per my earlier post linked above, the Farm Bill defines “hemp” as the cannabis plant or any part thereof containing less than .3% THC by dry weight. BSS claims that it bought the material from Boones Ferry Berry Farms (“Boones Ferry”), an Oregon-licensed hemp producer, and that tests performed by two different laboratories indicated that the THC content of the crop was well below the cap set by the Farm Bill for hemp.
Soon after the seizure, BSS filed a federal lawsuit against the state demanding the return of the “hemp”, which it claims is worth $1.3 million. Indeed, the company has sought an emergency temporary restraining order (TRO) because the value of the seized “hemp” is likely to drop precipitously. In its Memorandum in Support of Plaintiff’s Motion for TRO, the company explains:
“Like most agricultural crops, industrial hemp is perishable. . . . It must be stored in a climate-controlled setting, unbundled, with space between the product to allow air flow so the product can ‘breathe.’ . . . If stored improperly, it can mold. Id. If any portion of a bail of industrial hemp molds, the entire bail becomes useless, loses all commercial value, and must be discarded. . . . Even without spoiling, the longer industrial hemp sits, the more the CBD trapped inside dissipates, thus lowering the value of the product.”
(Memorandum, p. 8-9.)
Now, let me get to the questions posed by the case
- Was possession of the plant material legal?
Not under state law. The criminal charges and seizure both stem from state law, not federal law. And Idaho continues to define “marijuana” as the federal government once (and until very recently) did: as “all parts of the plant of the genus Cannabis . . . [except] the mature stalks”, regardless of THC content. Idaho St. § 37-2701(t). (See my book pages 17-27 for a discussion of legal definition of marijuana.) Hence, even if the cannabis plant material found in the truck is “hemp” under federal law, it is still “marijuana” under Idaho law – and the latter is most relevant for this state case.
Possibly not even under federal law. To be sure, as I explain my earlier post, the Farm Bill legalizes the possession (etc.) of cannabis plants and plant material when those products contain less than .3% THC by dry weight. It does so by redefining “marijuana” to exclude ultra-low THC cannabis plants and plant material (including extracts, like CBD). Such plants and plant material are now called “hemp.”
Even though BSS insists the plant material seized from the truck meets the Farm Bill’s definition of “hemp”, the court expressed some skepticism in its decision denying the emergency TRO. For example, it noted there were blanks in one of the test reports proffered by BSS and a long gap (nearly 3 months) between the date when the lab sampled the crop and the date when the crop was actually seized. (Big Sky Scientific v. Idaho State Police, Decision re TRO, p. 10, n.5). That gap may be relevant because the THC concentration found in cannabis plants changes across time.
Interestingly, the state police also tested the seized material for THC—even though, as I noted above, Idaho’s definition of “marijuana” does not hinge on the presence (or absence) of THC. But it appears the police did so only to take advantage of an evidentiary presumption created by Idaho law. After the language quoted above defining marijuana, the state law declares that “[e]vidence that any plant material . . . contains any of the chemical substances classified as tetrahydrocannabinols shall create a presumption that such material is ‘marijuana’ as defined and prohibited herein.” Idaho St. § 37-2701(t). For purposes of this evidentiary presumption, it only mattered whether (or not) the plant material contained “any” THC, so the state lab did not bother to measure the concentration of THC in the shipment. In other words, the state’s test does not indicate whether (or not) the shipment constituted “hemp” for purposes of federal law.
To be sure, if the federal government were to prosecute BSS’s employees (or the truck driver), it would need to prove beyond a reasonable doubt not only that the material was, in fact, “marijuana” (and not “hemp”), but also that the defendants knew the material in the truck was “marijuana” (and not “hemp”). The book discusses the knowledge requirement on pages 36-54 and 589-593. Meeting that burden could prove difficult, given the steps BSS appears to have taken to verify that the crop met the Farm Bill’s legal definition of “hemp.” BSS may have been mistaken about what it possessed, but the criminal law usually does not punish such mistakes.
(As I noted in my previous post, the Farm Bill shields hemp producers from prosecution for negligently growing cannabis plants with a THC concentration higher than .3%. But even if that provision makes it even harder for the federal government to prosecute farmers, it does not apply to wholesalers (like BSS) or truckers. It is a Farm Bill, after all.)
- Might the Farm Bill nonetheless preempt state prohibitions on hemp?
Nonetheless, and assuming this was ultra low THC “hemp,” BSS claims that Idaho’s marijuana prohibition is preempted insofar as it is applied to the interstate shipment of cannabis that meets the Farm Bill’s definition of “hemp.” In its memorandum in support, BSS argues that
“Congress has clearly spoken on the issue of industrial hemp. Big Sky’s shipment is industrial hemp. Without question, industrial hemp is legal at the federal level and considered to be an agricultural crop. While it remains the prerogative of each state to enact its own drug laws, those state laws cannot be enforced in a manner that conflicts with federal statutes. Congress has entirely preempted the area of interstate transportation of industrial hemp, so any state law that conflicts with that complete preemption must give way under the Supremacy Clause.
(Memorandum, p. 10). In other words, “Idaho can prohibit the sale and marketing of industrial hemp within its borders, but it cannot enforce its local laws so stringently as to cut off interstate commerce of what is considered lawful at the federal level.” (Memorandum, p. 16).
The company bases this preemption claim on Section 10114(b) of the Farm Bill:
“No State or Indian Tribe shall prohibit the transportation or shipment of hemp or hemp products produced in accordance with subtitle G of the Agricultural Marketing Act of 1946 (as added by section 10113) through the State or the territory of the Indian Tribe, as applicable.”
See New Congressional Farm Bill Legalizes Some Forms of Marijuana (quoting and discussing the Bill’s text.)
Thus, so the argument goes, Idaho must return BSS’s “hemp”, even if the state criminalizes the possession thereof, because BSS was only shipping it through the state.
However, the state successfully rebutted this claim – at least for purposes of defeating BSS’s motion for an emergency TRO.
In its decision denying the emergency TRO, the court noted that BSS “does not contend, and it is not clear on the present record whether it could contend, that the product seized was actually produced in compliance with subtitle G” as required by the Farm Bill. (Decision, p. 9). As explained in my previous post, and as the court surmises,
“Subtitle G contains not just the definition of hemp (which is the fulcrum of Plaintiff’s argument), but also the provisions detailing how states can create their own regulatory plan for hemp production and the means (the obligation actually) by which the Secretary of the United States Department of Agriculture is to create a federal regulatory plan for hemp production. Subtitle G requires a myriad of procedures, record-keeping requirements, inspection requirements, enforcement requirements, and other details which create a statutory frame around the production of hemp in the United States.”
(Decision, p. 11).
The problem is that,
“even though Big Sky may, at some point in time, be able to purchase industrial hemp that has been ‘produced in accordance with Subtitle G,’ the hemp that was seized in Idaho could not possible meet that standard because no ‘plans’ to regulate the production of industrial hemp under the 2018 Farm Bill have either been approved (by the federal government as to Oregon . . .) or created and promulgated by the United States Department of Agriculture for the federal government (to apply in the absence of an approved state or tribal plan).”
(Decision, p. 11).
Thus, “Big Sky has not persuaded the Court that it is likely to succeed on the merits” (Decision, p. 13), part of its burden in obtaining a TRO.
Even though the court denied the emergency TRO, it’s possible BSS might yet obtain an injunction from the court ordering return of the plant material — say, if it produces additional evidence to support its claim that the hemp was produced in compliance with the Farm Bill. But given the court’s reasoning, I think it unlikely the company will ever prevail.
The bigger lesson here is that BSS may have been too hasty in seeking to take advantage of the Farm Bill. (Likely, it’s not the only company to do so.) It (and the truck driver, who works for an independent shipping company) may pay a steep price for this haste.
That’s it for now. I’ll post on more developments in this case as they become available.