Three months after a state law effectively banned Maryland stores from selling some delta-8 and other hemp-derived products, a state judge gave the industry a lifeline Thursday, ordering an injunction that temporarily lifts restrictions on their sale.
For several years, stores across the country have been selling cannabinoid products derived from hemp after federal lawmakers eased restrictions in 2018. Some of these products — like delta-8 — have psychoactive effects, and states across the country responded with various regulations and outright bans. The industry in Maryland grew rapidly and was almost entirely unregulated until this summer when rules establishing the state’s recreational cannabis market took effect.
“It’s a good day for the hemp industry,” said Nicholas Patrick, owner of Embrace CBD, which sold delta-8 and hemp-derived products at three Maryland stores. “It’s a good day for our justice system.”
After provisions of the Cannabis Reform Act went into effect on July 1, Patrick said he had to close two of his shops and lay off employees. He converted his Glen Burnie store into a vape shop, he said, but it was struggling to survive.
“I was looking up and Googling bankruptcy lawyers,” Patrick said. “This couldn’t have come at a better time.”
As part of the recreational cannabis legislation, lawmakers required any store selling products that contained even small amounts of certain cannabinoids to be licensed by the state. There are a limited number of cannabis business licenses in Maryland. Purchasing an existing license can cost millions of dollars, and the state has not issued more licenses since legalizing recreational cannabis.
“We’re not afraid of regulation. We want the same things the regulators want, but they refuse to look at us like a partner,” Patrick said. “They look at us like an adversary or a problem.”
In July, the Maryland Hemp Coalition sued the state of Maryland in Washington County Circuit Court, saying that the law would wipe out their industry.
The difference between hemp and cannabis is that hemp generally has very low amounts of intoxicating compounds and the plant also has industrial uses. While cannabis remains illegal federally, hemp can be grown and processed as long as the plant and any hemp-derived products are less than 0.3% delta-9 THC by weight.
While many people are familiar with the main psychoactive compound in cannabis — delta-9 THC — there are more than 100 other cannabinoids found within the cannabis and hemp plant, some of which have therapeutic and intoxicating effects. Through chemical treatments, processors can extract and synthesize some cannabinoids from hemp while removing others, allowing stores to sell products with a variety of different cannabinoids, such as delta-8, delta-10, CBD and CBG.
In his injunction, Washington County Circuit Judge Brett Wilson said that hemp-derived products are distinct from the cannabis products typically sold at dispensaries, but all these products have been “lumped together” by state law. That law caused the hemp-industry to be “immediately shut out of the market,” he wrote.
Wilson agreed with the hemp industry that Maryland’s cannabis law created a monopoly for the existing industry because of the limited number of cannabis licenses. The judge also took aim at the state’s plan to award more licenses in the coming months. The first licenses will go to “social equity applicants.” Wilson called the application process “a completely arbitrary lottery” with “nebulous” guidelines.
The cannabis industry in Maryland is regulated by the Maryland Cannabis Administration, formerly the Maryland Medical Cannabis Commission, which helped lawmakers craft the legislation that cracked down on hemp-derived and delta-8 products.
“The Administration was disappointed to learn of the preliminary decision in Washington County Circuit Court allowing for the continued sale of unregulated, untested, and intoxicating hemp-derived products,” said the Maryland Cannabis Administration in a statement. “However, the decision does not enjoin the licensing process and we remain committed to moving forward with the transformative application round exclusive to social equity applicants.”
Levi Sellers, president of the Maryland Hemp Coalition, said he stopped growing hemp at his aquaponics farm in western Maryland — about 80% of his farm’s operations — in response to the new regulations.
“I’m very pleased that relief has been provided to the small, family and minority-owned businesses that are the backbone of the hemp industry,” Sellers said. “The fight that we are fighting is for small businesses against large corporations that are trying to consolidate and monopolize the market.”
The Maryland Wholesale Cannabis Trade Association, an industry group representing cultivators, said in a statement it wants an expanded cannabis market with “safe and tested products.”
“We know that untested, unregulated products pose a significant health risk and support the State of Maryland in addressing this critical public health issue,” the statement said.
The injunction is a temporary order that will be in place while the court case proceeds. Patrick isn’t wasting any time. After the judge ordered the injunction, Patrick drove to his wholesaler and brought a load of hemp-derived products to sell at his Glen Burnie store.
“When you get beat down as bad as we got beat down, the chance to live and fight another day was the most incredible feeling,” Patrick said. “This is far from over, but we’re grateful for the judge’s decision.”