Alaska hemp producers sue state, saying new ban on products is illegal

A cannabis plant grows indoors.
A young cannabis plant grows at a dispensary in Fairbanks. Alaska’s recreational marijuana industry pushed for new rules regulating hemp, saying their competitors have been able to sell intoxicating products to children and avoid tax burdens. Hemp producers are pushing back. (Valerie Lake / Alaska Public Media)

Alaska’s hemp industry sued the state earlier this month over new regulations that ban many of their products. The lawsuit targets the state’s Department of Natural Resources, whose new regulations say hemp products can no longer contain any amount of THC.

Hemp and marijuana are the same species of plant, and while hemp contains far less of the psychoactive chemical THC and has been touted for its industrial applications, THC can still be extracted from it to yield intoxicating byproducts.

The new rules were championed by producers of legal, recreational marijuana, who say the hemp industry became a competitor when it started selling intoxicating products, which were not subject to age limits and higher taxes.

Alaska Beacon reporter James Brooks has been following the lawsuit, and said a 2018 federal farm bill and a companion state bill helped clear the way for Alaska’s blooming hemp market.


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This interview has been lightly edited for length and clarity. 

James Brooks: When the farm bill and the state legislative bill were passed, the idea was that they weren’t intended to allow intoxicating hemp products. But as it turns out, you can extract intoxicants from hemp, and, based on a certain interpretation of the farm bill, sell products with a percentage of that product being intoxicating. And so what the new regulation does is it says you can’t have that intoxicating THC in your hemp product.

Michael Fanelli: So, I’ve always thought that hemp and marijuana were essentially the same plant, but hemp was just the name you use for it when you’re using it for practical purposes like clothing or lotions or non-intoxicating purposes. Are they separate, distinct plants?

JB: You know how you have different kinds of apples when you go into the store, right? What we’re talking about here are different cultivars of basically the same plant. Some of these types of cannabis plants are grown with low amounts of THC, and some are grown with high amounts of THC in them. Hemp is generally considered plants with low amounts of THC. They’re not usually designed to be intoxicating.

MF: OK, so it’s possible to take those plants with low amounts of THC and essentially concentrate them so that they then become intoxicating?

JB: Exactly, if you extract the intoxicating chemicals and use them in a finished product, say, a soda, a candy bar, a gummy or what have you, you could end up with an intoxicating product. And because it’s derived from hemp, it’s not regulated the same way as the state’s marijuana industry. And that caused a lot of heartburn among marijuana retailers. Their thought was, “Well we’re so tightly regulated, and the hemp industry is selling basically the same thing, and they’re not regulated.” You could sell those hemp products at gas stations to people of any age. Whereas, marijuana, you can only sell it at licensed retailers and only to people of a certain age.

MF: I’ve seen advertisements recently for weed products that say they can ship nationally, and it’s totally legal, it’s a federally legal product. And I’m like, how are they doing that? How are they able to ship across state lines? I wonder if those are technically hemp products.

JB: Right, those are hemp-derived products, because they’re not federally illegal, thanks to that farm bill.

MF: So yeah, I mean it seems like it definitely is a loophole?

JB: If you talk to hemp growers and retailers, they’ll tell you that, “What we’re doing is allowed under the federal farm bill,” and I think they would object to the characterization of this as a loophole. And that’s part of the reason why they filed suit, why they’re so adamant that in their belief that what the state is doing is wrong and illegal.

MF: So tell me a little bit more about what their argument is, from the hemp producers’ side.

JB: Yeah, there’s two arguments on this. The hemp industry feels that this regulation was written at the behest of its main competitor, the legal marijuana industry. And number two, is the legal argument itself. The hemp industry argues that the federal farm bill is what’s governing whether or not intoxicating hemp products can be sold, and that it’s improper and unconstitutional for the state to regulate something that the federal government has set a different rule for.

MF: So I saw in your story that you said other states have had similar lawsuits challenging their hemp regulations. Do you have any sense of how those have played out so far?

JB: It’s been a mixed bag, to be honest. So there’s no telling how Alaska courts might rule on this case. The lawsuit was filed in Alaska’s federal court, and it’s still pending there. The judge turned down a request for a particularly speedy action on this. So it’s likely to take months, if not years, to play out in federal court.

MF: So in the meantime, what happens to all those hemp products? Are they technically banned now?

JB: They technically are. But it seems like they’re in a case of limbo, where the Department of Natural Resources, which regulates agriculture here, and the Marijuana Control Office are giving retailers some time before they start issuing citations and the like.

a portrait of a man outside

Michael Fanelli reported on economics and hosted the statewide morning news at Alaska Public Media. 

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