C.Y. Wholesale, Inc. v. Holcomb, No. 19-3034 (7th Cir. 2020)Annotate this Case
Indiana-based hemp sellers and wholesalers sought to enjoin the enforcement of Indiana’s “Act 516” criminal prohibition on the manufacture, delivery, or possession of smokable hemp, Ind. Code 35-48-3-10.1, arguing that Indiana’s law is preempted by the Agriculture Improvement Act of 2018. The 2018 Act expanded the definition of industrial hemp to include all parts of the cannabis plant with a low THC concentration and all low-THC cannabis derivatives; excludes industrial hemp from the federal definition of marijuana, removing it from the DEA’s schedule of controlled substances; provides that the states retain the authority to regulate the production of hemp (7 U.S.C. 1639p); and forbids the states from prohibiting the transportation of hemp products through the state. The district court issued the requested injunction. Indiana then enacted Act 335, which clarifies that Indiana’s prohibition on the delivery and possession of smokable hemp does “not apply to the shipment of smokable hemp from a licensed producer in another state in continuous transit through Indiana to a licensed handler in any state.”
The Seventh Circuit vacated, finding the injunction overly broad. The part of Act 516 prohibiting the manufacture of smokable hemp does not fall under the 2018 law’s express preemption clause; it is not clear that the express preemption clause, alone, precludes a state from prohibiting the possession and sale of industrial hemp within the state.