Test case advancing over interstate industrial hemp shipments pursuant to 2018 Farm Bill absent USDA guidance and state required plans

What happens when the USDA and states are required by a federal statute to adopt plans to allow for action – in this case the shipment of industrial hemp across state lines under the Agricultural Improvement Act of 2018 (the 2018 Farm Bill) – but the USDA and states are slow to enact the required plans allowing those shipments, and someone ships industrial hemp anyway? We are about to find out.

The briefs in Big Sky Scientific v. Idaho State Police, argue that instead of following the 2018 Farm Bill’s intent regarding a Big Sky industrial hemp shipment that was headed from Oregon to Colorado by just letting it through, the Idaho state police arrested the driver, seized the shipment, and reported to media outlets that it it just made the largest marijuana bust in the agency’s history. Big Sky responded quickly sending notices to the deputies and other authorities explaining its position that the shipment is allowed by the Farm Bill in addition to notifying them of the fact that the shipment is very expensive and very perishable.

Despite these points, the state of Idaho still felt the shipment was not covered by the 2018 Farm and refused to return the shipment. So Big Sky went to court.

Big Sky Scientific requested a temporary restraining order and a preliminary injunction to keep the authorities from violating the 2018 Farm Bill and the Commerce Clause and demanded the state return the property (or appoint a receiver to ensure it is protected from destruction during the case).

The argument made by Big Sky Scientific is straightforward – the Farm Bill distinguished industrial hemp from marijuana and removed it from the Controlled Substances Act. The Brief notes that a critical point in this case is that the Farm Bill provides no state, regardless of the state’s marijuana laws, may prohibit the shipment of industrial hemp, or hemp products, through the state or territory.

But the federal court agreed with the state. A federal magistrate judge found that, yes, the Farm Bill allowed for interstate shipment and provided the mechanism for which that should take place, but also held that the shipment was unlawful because Oregon does not yet have a federally approved plan pursuant to the requirements of the Farm Bill and because the Secretary of the United States Department of Agriculture has yet to publish its own plan pursuant to Subtitle G under the Farm Bill that will provide the mechanisms by which records are kept and inspection, enforcement and other requirements for hemp production are emplaced that will create the statutory frame inside which industrial hemp can be grown, marketed, and transported – and state plans can be approved allowing for interstate shipments to occur.

In ruling, the Court found that because no plan exists, both federally and by virtue of a lack of federal authority, at the state level, an important portion of Subtitle G was not complied with, so by definition, the hemp was not produced in accordance with the Farm Bill so the result is that the requirements of the Farm Bill for interstate shipment was not met. A classic chicken and egg problem for those who do not wish to wait for states to enact their plans or for the USDA to create guidelines, but wish to comply with the spirit of the 2018 Farm Bill and ship industrial hemp across state lines.

The temporary restraining order was denied on February 2nd in the preliminary injunction was denied on February 19th and an immediate appeal ensued. Big Sky must file its initial brief by March 20th.

The issues raised by the parties and the decisions handed down by the federal magistrate have provided a nice package in which a federal appellate court will consider the real question – can companies ship industrial hemp provided the necessary authorities haven’t provided the guidance required under the 2018 Farm Bill. A failure to rule that shipments can occur in the absence of USDA or state guidance means that a single actor could effectively block state or even full federal (the USDA) shipment by not providing the plans required under Subtitle G.

You can read the order denying the TRO here.

You can read the order denying the Preliminary Injunction here.

You can read the brief, the response, and the reply as well.Additionally, the US Hemp Roundtable submitted an amicus brief that you can read here.

Ashley Brandt

Hi there! I’m happy you’re here. My name is Ashley Brandt and I’m an attorney in Chicago representing clients in the Food and Beverage, Advertising, Media, and Real Estate industries. A while back I kept getting calls and questions from industry professionals and attorneys looking for advice and information on a fun and unique area of law that I’m lucky enough to practice in. These calls represented a serious lack of, and need for, some answers, news, and information on the legal aspects of marketing and media. I've got this deep seeded belief that information should be readily available and that the greatest benefit from the information age is open access to knowledge... so ... this blog seemed like the best way to accomplish that. I enjoy being an attorney and it’s given me some amazing opportunities, wonderful experiences, and an appreciation and love for this work. I live in Chicago and work at an exceptional law firm, Goldstein & McClintock, with some truly brilliant people. Feel free to contact me at any time with any issues, comments, concerns… frankly, after reading this far, I hope you take the time to at least let me know what you think about the blog and how I can make it a better resource.

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  3. February 3, 2020

    […] a year ago, the Idaho state police seized over three tons of industrial hemp valued at roughly $1.3 million on its way from Oregon to Colorado for processing. The company that owned the hemp tried desperately to have the Federal Courts intervene and after a […]

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