Fourth Circuit Affirms Virginia's Total THC Standard for Hemp Products: Preemption and Dormant Commerce Clause Claims Denied

Fourth Circuit Affirms Virginia's Total THC Standard for Hemp Products: Preemption and Dormant Commerce Clause Claims Denied

Introduction

The case of Northern Virginia Hemp and Agriculture, LLC; Rose Lane; Franny's Operations, Inc. v. Commonwealth of Virginia addresses significant issues surrounding state regulation of hemp products, particularly concerning their tetrahydrocannabinol (THC) concentrations. The plaintiffs, comprising a Virginia resident, a Virginia-based hemp producer, and an out-of-state hemp company, challenged Virginia Senate Bill 903 (S.B. 903) on grounds of federal preemption and Dormant Commerce Clause violations. The United States Court of Appeals for the Fourth Circuit's decision provides critical insights into the balance between state regulatory authority and federal legislative frameworks in the evolving landscape of hemp and cannabis law.

Summary of the Judgment

The plaintiffs sought to enjoin Virginia's S.B. 903, which imposes a stringent total THC concentration limit of 0.3% on hemp products for retail sale, encompassing all forms of THC, not just delta-9 THC. They argued that this state regulation is preempted by the federal 2018 Farm Bill, which defined and regulated hemp at the federal level with a similar THC limit but did not explicitly encompass all THC forms. Additionally, the plaintiffs contended that S.B. 903 violates the Dormant Commerce Clause by unduly burdening interstate commerce.

The district court denied the plaintiffs' motion for a preliminary injunction, primarily due to insufficient standing, particularly concerning the sales restriction provision of S.B. 903. On appeal, the Fourth Circuit affirmed the district court's denial of injunctive relief regarding the total THC standard but vacated and remanded the portion concerning the sales restrictions due to standing issues.

Analysis

Precedents Cited

The judgment references several key precedents that shaped the court's reasoning:

  • De Buono v. NYSA-ILA Med. & Clinical Servs. Fund: Affirmed states' power to regulate matters of health and safety.
  • Friends of the Earth, Inc. v. Laidlaw Env't Servs. (TOC), Inc.: Established the criteria for standing in federal courts.
  • Lane v. Holder: Addressed standing for downstream purchasers challenging state regulations affecting their suppliers.
  • Arizona v. United States: Clarified field preemption and the conditions under which federal law preempts state regulations.
  • Kentucky Wholesale Corp. v. Holcomb: Highlighted principles of statutory interpretation related to preemption.

Legal Reasoning

The court's legal reasoning centered on two primary issues: standing and the validity of the preemption and Dormant Commerce Clause claims.

  • Standing: The plaintiffs failed to demonstrate that they are directly affected stakeholders (Virginia-licensed processors) for the sales restriction provision of S.B. 903. Without establishing such standing, their challenge to this provision was dismissed for lack of jurisdiction.
  • Preemption Claims: The court analyzed express, field, and conflict preemption arguments. It found that the 2018 Farm Bill does not unequivocally prohibit state regulations like S.B. 903. Specifically, the Farm Bill allows states to regulate hemp more stringently, and there is no clear congressional intent to preempt state standards concerning total THC concentrations beyond what federal law stipulates.
  • Dormant Commerce Clause: The plaintiffs did not provide sufficient evidence that S.B. 903 discriminates against interstate commerce or places an undue burden on it. Since the state regulation applies uniformly to both in-state and out-of-state entities, it does not violate the Dormant Commerce Clause.

Impact

This judgment reinforces the authority of states to impose regulations on hemp products that may be more restrictive than federal standards, provided they do not directly conflict with federal law. The decision underscores the necessity for plaintiffs to establish clear standing when challenging state regulations, particularly when the regulations pertain to subjects where states retain significant regulatory authority, such as health and safety.

For the hemp and cannabis industry, this case delineates the boundaries of state versus federal regulatory power, particularly in the context of THC concentration limits. States can tailor their regulations to address specific health and safety concerns within their jurisdictions without necessarily being overridden by federal legislation, as long as they do not infringe upon explicitly federally preempted areas.

Complex Concepts Simplified

  • Preemption: A legal doctrine where federal law overrides or takes precedence over state laws in cases of conflict. There are three types: express, field, and conflict preemption. This case focused on determining whether Virginia's S.B. 903 was preempted by the federal 2018 Farm Bill.
  • Dormant Commerce Clause: An inferred aspect of the Commerce Clause that restricts states from enacting legislation that discriminates against or excessively burdens interstate commerce, even in the absence of federal law on the matter.
  • Standing: The requirement that a plaintiff must have a sufficient connection to and harm from the law or action challenged to support a legal claim. In this case, the plaintiffs failed to prove they were directly affected by the sales restriction, thus lacking standing.
  • Total Tetrahydrocannabinol (THC) Concentration: Refers to the combined percentage of all forms of THC present in hemp products, not limited to delta-9 THC. Virginia's S.B. 903 sets this cap at 0.3% to regulate the psychoactive potential of hemp products.

Conclusion

The Fourth Circuit's decision in Northern Virginia Hemp and Agriculture, LLC; Rose Lane; Franny's Operations, Inc. v. Commonwealth of Virginia affirms Virginia's authority to regulate the total THC concentration in hemp products under S.B. 903 without being preempted by the federal 2018 Farm Bill. The court meticulously navigated the complex interplay between federal and state laws, ultimately reinforcing the state's prerogative to safeguard public health and safety through its regulatory frameworks. Additionally, the judgment highlights the critical importance of establishing standing in federal litigation, particularly when challenging state regulations. Moving forward, this case sets a precedent for how similar challenges to state hemp regulations may be adjudicated, balancing federal legislative intent with state-level regulatory autonomy.

Case Details

NORTHERN VIRGINIA HEMP AND AGRICULTURE, LLC; ROSE LANE; FRANNY'S OPERATIONS, INC., Plaintiffs - Appellants, v. COMMONWEALTH OF VIRGINIA; GLENN YOUNGKIN, Governor of the Commonwealth of Virginia, in his official capacity; JASON S. MIYARES, Attorney General for the Commonwealth of Virginia, in his official capacity; BOARD OF AGRICULTURE AND CONSUMER SERVICES; JOSEPH GUTHRIE, Commissioner of the Virginia Department of Agriculture and Consumer Services, in his official capacity; VIRGINIA CANNABIS CONTROL AUTHORITY; STEVE DESCANO, Commonwealth's Attorney for the County of Fairfax, in his capacity; BUTA BIBERAJ, Commonwealth's Attorney for the County of Loudoun, in her official capacity; BRYAN L. PORTER, Commonwealth's Attorney for the City of Alexandria, in his official capacity; AMY ASHWORTH, Commonwealth's Attorney for the County of Prince William, in her official capacity; PARISA DEHGHANI-TAFTI, Commonwealth's Attorney for the County of Arlington and the City of Falls Church, in her official capacity; SCOTT C. HOOK, Commonwealth's Attorney for the County of Fauquier, in his official capacity; BRYAN CAVE, Commonwealth's Attorney for the County of Page, in his official capacity; R. ALLEN NASH, Commonwealth's Attorney for the County of Mecklenburg, in his official capacity; KRYSTYN REID, Commonwealth's Attorney for the County of York and the City of Poquoson, in her official capacity; VINCENT DONOGHUE, Commonwealth's Attorney for the County of Essex, in his official capacity; COOPER BROWN, Commonwealth's Attorney for the County of Franklin, in his official capacity; DIANA WHEELER O'CONNELL, Commonwealth's Attorney for the County of Orange, in her official capacity; MEGAN L. CLARK, Commonwealth's Attorney for the County of Prince Edward, in her official capacity; MICHAEL T. HURD, Commonwealth's Attorney for the County of Middlesex, in his official capacity; R. E. CHALKLEY, Commonwealth's Attorney for the County of Hanover, in his official capacity; COLIN D. STOLLE, Commonwealth's Attorney for the City of Virginia Beach, in his official capacity; MARC ABRAMS, Commonwealth's Attorney for the County of Page, in his official capacity; MEREDITH ADKINS, Commonwealth's Attorney for the County of King and Queen, in her official capacity; JOHN R.H. ALEXANDER, Commonwealth's Attorney for the County of Botetourt, in his official capacity; GERALD D. ARRINGTON, Commonwealth's Attorney for the County of Buchanan, in his official capacity; KEMPER M. BEASLEY, III, Commonwealth's Attorney for the County of Buckingham, in his official capacity; ANTON A. BELL, Commonwealth's Attorney for the City of Hampton, in his official capacity; JOHN S. BELL, Commonwealth's Attorney for the County of Warren, in his official capacity; CLARISSA BERRY, Commonwealth's Attorney for the County of Madison, in her official capacity; TRAVIS BIRD, Commonwealth's Attorney for the County of Spotsylvania, in his official capacity; WILLIAM BLAINE, Commonwealth's Attorney for the County of Brunswick, in his official capacity; DAYNA KENDRICK BOBBITT, Commonwealth's Attorney for the County of Patrick, in her official capacity; JONATHAN BOURLIER, Commonwealth's Attorney for the County of Dinwiddie, in his official capacity; TOM C. BOWEN, III, Commonwealth's Attorney for the County of Mathews, in his official capacity; THOMAS E. BOWERS, Commonwealth's Attorney for the City of Salem, in his official capacity; BRANDON BOYLES, Commonwealth's Attorney for the County of Grayson and City of Galax, in his official capacity; ERIC BRANSCOM, Commonwealth's Attorney for the County of Floyd, in his official capacity; ROGER D. BROOKS, Commonwealth's Attorney for the County of Carroll and the City of Galax, in his official capacity; TIFFANY BUCKNER, Commonwealth's Attorney for the City of Petersburg, in her official capacity; DONALD S. CALDWELL, Commonwealth's Attorney for the City of Roanoke, in his official capacity; W. LYLE CARVER, Commonwealth's Attorney for the County of Amherst, in his official capacity; D. MICHAEL CAUDILL, Commonwealth's Attorney for the County of Goochland, in his official capacity; ROBERT CERULLO, Commonwealth's Attorney for the County of Powhatan, in his official capacity; ALFRED G. COLLINS, Commonwealth's Attorney for the City of Colonial Heights, in his official capacity; EDWIN CONSOLVO, Commonwealth's Attorney for the County of Greene, in his official capacity; ERIC A. COOKE, Commonwealth's Attorney for the City of Franklin and the County of Southampton, in his official capacity; H. FULLER CRIDLIN, Commonwealth's Attorney for the County of Lee, in his official capacity; JOSHUA CUMBOW, Commonwealth's Attorney for the County of Washington, in his official capacity; STACEY DAVENPORT, Commonwealth's Attorney for the County of Chesterfield, in her official capacity; DEREK DAVIS, Commonwealth's Attorney for the County of Surry, in his official capacity; STEVEN C. DAVIS, Commonwealth's Attorney for the County of Wise and the City of Norton, in his official capacity; MELISSA A. DOWD, Commonwealth's Attorney for the County of Highland, in her official capacity; MATTHEW DUNNE, Commonwealth's Attorney for the County of Craig, in his official capacity; JOHN DUSEWICZ, Commonwealth's Attorney for the County of Gloucester, in his official capacity; JOSH O. ELROD, Commonwealth's Attorney for the City of Buena Vista, in his official capacity; ROY F. EVANS, Commonwealth's Attorney for the County of Smyth, in his official capacity; RAMIN FATEHI, Commonwealth's Attorney for the City of Norfolk, in his official capacity; DANIEL FELLHAUER, Commonwealth's Attorney for the County of Scott, in his official capacity; SUSAN FIERRO, Commonwealth's Attorney for the County of Prince George, in her official capacity; LESLIE M. FLEET, Commonwealth's Attorney for the County of Appomattox, in his official capacity; JEFFREY GAINES; ANN GARDNER, Commonwealth's Attorney for the County of Alleghany and the City of Covington, in her official capacity; MASHA L. GARST, Commonwealth's Attorney for the County of Rockingham and the City of Harrisonburg, in her official capacity; ARTHUR L. GOFF, Commonwealth's Attorney for the County of Rappahannock, in his official capacity; WILLIAM E. GREEN, Commonwealth's Attorney for the County of Charlotte, in his official capacity; NATHAN GREEN, Commonwealth's Attorney for the County of James City and the City of Williamsburg, in his official capacity; JUSTIN GRIFFITH, Commonwealth's Attorney for the County of Pulaski, in his official capacity; KERI GUSMANN, Commonwealth's Attorney for the County of King George, in her official capacity; HOWARD E. GWYNN, Commonwealth's Attorney for the City of Newport News, in his official capacity; JEFFREY HAISLIP, Commonwealth's Attorney for the County of Fluvanna, in his official capacity; G. ANDY HALL, Commonwealth's Attorney for the City of Martinsville, in his official capacity; MATTHEW R. HAMEL, Commonwealth's Attorney for the City of Chesapeake, in his official capacity; WENDY J.D. HANNAH, Commonwealth's Attorney for the County of Cumberland, in her official capacity; LEE RANDOLPH HARRISON, Commonwealth's Attorney for the County of Amelia, in his official capacity; BETHANY HARRISON, Commonwealth's Attorney for the County of Lynchburg, in her official capacity; ROBERT HASKINS, Commonwealth's Attorney for the County of Pittsylvania, in his official capacity; BEN HEIDT, Commonwealth's Attorney for the County of Caroline, in his official capacity; JAMES HINGELEY, Commonwealth's Attorney for the County of Albemarle, in his official capacity; BRIAN HOLOHAN, Commonwealth's Attorney for the County of Roanoke, in his official capacity; ELIZABETH K. HUMPHRIES, Commonwealth's Attorney for the City of Fredericksburg, in her official capacity; MICHAEL D. JONES, Commonwealth's Attorney for the County of Wythe, in his official capacity; DAVID L. LEDBETTER, Commonwealth's Attorney for the City of Waynesboro, in his official capacity; ROBERT M. LILLY, JR., Commonwealth's Attorney for the County of Giles, in his official capacity; TIM MARTIN, Commonwealth's Attorney for the County of August, in his official capacity; TRACY QUACKENBUSH MARTIN, Commonwealth's Attorney for the County of Halifax, in her official capacity; PAUL A. MCANDREWS, Commonwealth's Attorney for the County of Campbell, in his official capacity; COLETTE WALLACE MCEACHIN, Commonwealth's Attorney for the City of Richmond, in her official capacity; R. E. MCGUIRE, Commonwealth's Attorney for the County of Louisa, in his official capacity; JARED L. MOON, Commonwealth's Attorney for the City of Lexington and the County of Rockbridge, in his official capacity; STEPHANIE MORALES, Commonwealth's Attorney for the City of Portsmouth, in her official capacity; J. SPENCER MORGAN, Commonwealth's Attorney for the County of Accomack, in his official capacity; WESLEY NANCE, Commonwealth's Attorney for the County of Bedford, in his official capacity; ANDREW NESTER, Commonwealth's Attorney for the County of Henry, in his official capacity; JOSH NEWBERRY, Commonwealth's Attorney for the County of Dickenson, in his official capacity; RICHARD NEWMAN, Commonwealth's Attorney for the City of Hopewell, in his official capacity; MICHAEL NEWMAN, Commonwealth's Attorney for the City of Danville, in his official capacity; ERIC L. OLSEN, Commonwealth's Attorney for the County of Stafford, in his official capacity; MARY K. PETTITT, Commonwealth's Attorney for the County of Montgomery, in her official capacity; GEORGETTE PHILLIPS, Commonwealth's Attorney for the County of Isle of Wight, in her official capacity; JAMES CHRISTOPHER PLASTER, Commonwealth's Attorney for the County of Tazewell, in his official capacity; JOSEPH D. PLATANIA, Commonwealth's Attorney for the City of Charlottesville, in his official capacity; NARENDRA PLEAS, Commonwealth's Attorney for the City of Suffolk, in her official capacity; CHRISTIAN EDWARD REHAK, Commonwealth's Attorney for the City of Radford, in his official capacity; T. SCOTT RENICK, Commonwealth's Attorney for the County of New Kent, in his official capacity; VINCENT L. ROBERTSON, Commonwealth's Attorney for the County of Sussex, in his official capacity; DANIEL RUTHERFORD, Commonwealth's Attorney for the County of Nelson, in his official capacity; JULIA HUTT SICHOL, Commonwealth's Attorney for the County of Westmoreland, in her official capacity; JOHN C. SINGLETON, Commonwealth's Attorney for the County of Bath, in his official capacity; ANTHONY G. SPENCER, Commonwealth's Attorney for the County of Lancaster, in his official capacity; ROSS P. SPICER, Commonwealth's Attorney for the County of Frederick, in his official capacity; JORDAN SPIERS, Commonwealth's Attorney for the County of Lunenburg, in her official capacity; ZACHARY A. STOOTS, Commonwealth's Attorney for the County of Russell, in his official capacity; SHANNON L. TAYLOR, Commonwealth's Attorney for the County of Henrico, in her official capacity; JACK ARNOLD THORNTON, III, Commonwealth's Attorney for the County of Northampton, in his official capacity; ELIZABETH A. TRIBLE, Commonwealth's Attorney for the County of Richmond, in her official capacity; ROBERT H. TYLER, Commonwealth's Attorney for the County of Charles City, in his official capacity; PAUL WALTHER, Commonwealth's Attorney for the County of Culpeper, in his official capacity; LEANNE WATROUS, Commonwealth's Attorney for the County of Nottoway, in her official capacity; PATRICIA TAYLOR WATSON, Commonwealth's Attorney for the County of Greensville, in her official capacity; TIFFANY M. WEBB, Commonwealth's Attorney for the County of King William, in her official capacity; PATRICK D. WHITE, Commonwealth's Attorney for the County of Bland, in his official capacity; ANNE MCCARDELL WILLIAMS, Commonwealth's Attorney for the County of Clarke, in her official capacity; AMANDA MCDONALD WISELEY, Commonwealth's Attorney for the County of Shenandoah, in her official capacity; JERRY ALLEN WOLFE, Commonwealth's Attorney for the City of Bristol, in his official capacity; JANE WRIGHTSON, Commonwealth's Attorney for the County of Northumberland, in her official capacity; HEATHER HOVERMALE, In her official capacity as the Commonwealth's Attorney for the City of Winchester; KYLE KILGORE, In his official capacity as the Commonwealth's Attorney for the County of Scott; M. BRETT HALL, In his official capacity as the Commonwealth's Attorney for the County of Wise and the City of Norton, Defendants - Appellees. AMERICAN TRADE ASSOCIATION FOR CANNABIS AND HEMP, Amicus Supporting Appellees.
Year: 2025
Court: United States Court of Appeals, Fourth Circuit

Judge(s)

QUATTLEBAUM, Circuit Judge

Attorney(S)

JAMES NELSON MARKELS, CROESSMANN & WESTBERG, P.C., VIENNA, VIRGINIA, FOR APPELLANTS. ERIKA L. MALEY, OFFICE OF THE ATTORNEY GENERAL OF VIRGINIA, RICHMOND, VIRGINIA, FOR APPELLEES. THOMAS WESTBERG-CROESSMANN, CROESSMANN & WESTBERG, P.C., TYSONS, VIRGINIA, FOR APPELLANTS. JASON S. MIYARES, ATTORNEY GENERAL, STEVEN G. POPPS, DEPUTY ATTORNEY GENERAL, CAL BROWN, SENIOR ASSISTANT ATTORNEY GENERAL, ANDREW N. FERGUSON, SOLICITOR GENERAL, OFFICE OF THE ATTORNEY GENERAL OF VIRGINIA, RICHMOND, VIRGINIA, FOR APPELLEES. SETH A. GOLDBERG, ROBERT M. PALUMBOS, WILLIAM R. HEASTON, DUANE MORRIS LLP, PHILADELPHIA, PENNSYLVANIA, FOR AMICUS CURIAE.

Comments