Maryland Hemp Companies Sue State Over Adult-Use Marijuana Rules

The companies claim the rules will put them out of business.

A group of hemp companies in Maryland have filed suit against the governor and several state officials, claiming that the regulatory plan lawmakers authorized for the recreational cannabis industry will put them out of business.

The Maryland Hemp Coalition and several affiliates filed the case in Washington County Circuit Court on Monday against Gov. Wes Moore, the Maryland Cannabis Administration, the Maryland Alcohol, Tobacco, and Cannabis Commission, and several specific state officials with those agencies, according to court records.

The coalition’s lawsuit contends that the adult-use legalization plan outlawed the hemp-based goods their businesses have been selling for years, Fox 45 News reported, and simultaneously made the bar for recreational marijuana licensure so high that it’s nearly unreachable.

“My clients, who have been lawfully selling these products for years, are suddenly in a position where they are being told they can’t sell their products without a license, and yet the obstacles to get a license are nearly insurmountable,” Nevin Young, a lawyer representing the plaintiffs, told Fox 45 News.

The new adult-use market – which launched July 1 – was at first only available to existing medical marijuana companies in the state, although more licenses will be available in coming months, first for social equity applicants and then for others such as the hemp business owners.

But the new market also put a strict cap on the amount of THC allowed in non-marijuana products, which forced many of the hemp businesses selling delta-8 products and hemp-based CBD goods to shut their doors at the start of the month, Fox 45 News reported.

The suit alleges that the state’s licensing regime creates an unfair advantage for licensed MMJ companies and others who will win permits, and calls it “a classic prohibited monopoly, with the state as a willing profiteer in the system,” The Baltimore Sun reported.

The hemp market nationwide is in a state of flux, as federal regulators have failed to issue clear guidelines for businesses on what’s allowed and what isn’t. That’s led to a growing patchwork of state rules that sometimes conflict with what’s allowed under federal law, with the occasional enforcement push by agencies such as the Food and Drug Administration.

Maryland Hemp Coalition lawsuit against state

John Schroyer

John Schroyer has been a reporter since 2006, initially with a focus on politics, and covered the 2012 Colorado campaign to legalize marijuana. He has written about the cannabis industry specifically since 2014, after being on hand for the first-ever legal cannabis sales on New Year’s Day that year in Denver. John has covered subsequent marijuana market launches in California and Illinois, has written about every aspect of the marijuana trade, and was part of the team that built the cannabis industry’s first-ever trade show, MJBizCon. He joined Green Market Report in 2022.

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