The measure has created a devastating ripple effect across the Maryland hemp industry, with the Mayor of Federalsburg among its latest victims.
The perplexing and completely avoidable battle between cannabis and its sister plant, hemp, continues to rage in the United States. The latest battleground state is Maryland, where legal and regulated recreational marijuana sales began this past July. Since that time, revenue from retail sales has exceeded $90 million.
However, according to a new lawsuit filed by the Maryland hemp industry, the news is not all positive. As first, reported by the Baltimore Sun, a group of Maryland hemp companies recently filed a lawsuit against the governor and state agencies over a new law that severely limits the market for hemp-based products.
In its lawsuit against Gov. Wes Moore, the Maryland Cannabis Administration, and the Alcohol, Tobacco, and Cannabis Commission, the Maryland Hemp Coalition asserts that the state has created a monopoly for licensed cannabis companies by enforcing cap limits on THC concentrates in items containing CBD as well as severely restricting licensing.
One of the Coalition’s members is the mayor of Federalsburg, MD, Kimberly Abner. She, her husband, Ken, and her brother-in-law, owned and operated a small hemp farm on the Eastern Shore, producing products like gummies and vapes for the past three years. However, as ,first reported by Marijuana Moment, the new cannabis legalization statute is pushing them out of the market and forcing them to close their business and sell the farm.
During a recent cannabis symposium sponsored by the Maryland Municipal League, Abner shared her frustration and anger over the damage the new law is causing her and many other hemp business owners in the state.
Directing her comments to House Economic Matters Chair Del. C.T. Wilson (D-Charles), she said, “I’m the face of one of the businesses that you just put out of business. I have a Maryland hemp farm. I have a business that sells federally legal hemp products, and my stores are now calling me to take the product back out of their stores because of this bill.”
“I’m the face of one of the businesses that you just put out of business. I have a Maryland hemp farm. I have a business that sells federally legal hemp products, and my stores are now calling me to take the product back out of their stores because of this bill.”
– Mayor Kimberly Abner, Federalsburg MD
Like many hemp entrepreneurs, the Abners initially tried to enter Maryland’s medical marijuana program. However, they could not secure one of the few coveted licenses, so they decided to go the hemp route. For many small businesses trying to enter the legal cannabis industry, hemp has become an attainable and productive stepping stone to eventual entry into the medical and recreational sectors since its legalization under the 2018 Farm Bill.
In a separate interview, Abner explained, “Since we didn’t get a license, we went with the hemp products because we could get into that market and we can legally sell it and legally grow it in the state of Maryland.”
Their company, called Cannamedus, sold edible gummies containing delta-8 and delta-9 THC, vape products, a line of tinctures and topical lotions, and creams to smoke shops and retailers on Maryland’s Eastern Shore. However, according to Abner, the new legalization measure destroyed everything.
Under the new law, CBD-based products such as gummies, topicals, and extracts containing more than 2.5 milligrams of THC per package are now illegal to sell in Maryland without a retail cannabis license.
In addition, the statute also explicitly prohibits items containing the controversial hemp-derived cannabinoid delta-8 THC. According to the details of the lawsuit, the new limits will effectively eliminate a majority of products on the market.
The new law allows for the sale of these items for licensed retailers; however, the Coalition contends that hemp operators face prohibitive restrictions in obtaining a license and are therefore facing a no-win situation.
“Basically, almost all of the (CBD) products that are presently being sold would fall under the new statute and, would require a license to be sold,” Nevin Young, an attorney representing the hemp industry, told The Baltimore Banner.
“Basically, almost all of the (CBD) products that are presently being sold would fall under the new statute and would require a license to be sold.”
– Nevin Young, an attorney representing the hemp industry
Critics like Young point out that the current licensing process is too burdensome for many hemp operators to secure a license. Under state requirements, applicants must have at least 65% ownership and control held by at least one person, who must also meet other strict requirements.
The plaintiffs allege that by creating specific categories of persons eligible to submit applications for the first round of licenses, obtaining a retail operator license violates Maryland’s anti-monopoly laws and the state’s Equal Protection Act.
However, for the lawmakers responsible for passing the legalization statute, the central issue at hand is consumer safety. According to Rep. Wilson, “The word ‘federally legal’ is very loosely worded here. You’re right, at this point, the feds haven’t made (hemp) illegal, but as a state, we do have the right to make sure that our constituents are safe. And if none of this has been tested, then we have a right to make sure that whatever people consume and put in their bodies is tested. And…we have a right to set the level of what we consider an intoxicant and what we don’t. But as I’m sure you’re aware, that’s what the lawsuit will sort out.”
“The word ‘federally legal’ is very loosely worded here. You’re right, at this point, the feds haven’t made (hemp) illegal, but as a state, we do have the right to make sure that our constituents are safe. And if none of this has been tested, then we have a right to make sure that whatever people consume and put in their bodies is tested. And…we have a right to set the level of what we consider an intoxicant and what we don’t. But as I’m sure you’re aware, that’s what the lawsuit will sort out.”
– MD House Economic Matters Chair Del. C.T. Wilson (D-Charles)
For her part, Abner contends all of her products were tested, and she has the reports to prove it. However, her receipts and results may all be for naught. Ultimately, the judicial system will decide if the new law violates Maryland laws. In the meantime, the Abners have lost their business, and sadly, they will not be the only small hemp businesses to feel the crush of the ever-corporatizing cannabis juggernaut in Maryland and across the country.
It is a fascinating time in the world of marijuana legalization efforts. Minnesota just became the 23rd state to legalize adult-use cannabis, and at least a dozen more are considering legislation or voter ballot initiatives to add their names to the list of states with legal markets. However, in that zeal to make cannabis legal for adult consumption, the dirty hands of large multi-state operators have corrupted some of the efforts, and the biggest loser seems to be hemp.
The outcome of the Maryland case is critical in the eyes of many hemp advocates and stakeholders. By setting a precedent that legalizing cannabis cannot be achieved at the expense of the hemp industry and its thousands of small business owners, both industries can strike a fair and healthier balance allowing the “sister” plants to coexist and flourish together instead of the current adversarial state.