Plaintiffs argue in the lawsuit that the result is “a single product is simultaneously legal ‘hemp’ and illegal ‘marijuana.’”

By Rebecca Rivas, Missouri Independent

A federal judge is being asked to decide whether Missouri’s new law banning intoxicating hemp products is clear enough to enforce in November or so contradictory that a constitutional challenge to it should move forward.

At the center of the dispute is the question of whether Missouri calls a product legal “hemp” in one part of state law and illegal “marijuana” in another.

The plaintiffs, led by the Missouri Hemp Trade Association, said in a filing this week that the state has created overlapping definitions, leaving businesses unsure what they can legally sell when the law goes into effect on November 12. They argue the case over House Bill 2641 deserves to be heard in court.

“Most judges would read [House Bill 2641] and go, ‘What is going on here?’” said Chuck Hatfield, attorney for the plaintiffs. “‘This seems like something we need to at least dig into and figure out.’ And that’s what our clients want is a day in court.”

The state says there’s no contradiction because the law specifically outlines which category controls: if it meets the definition of a hemp-derived cannabinoid product, it’s treated as marijuana. The state asked Judge M. Douglas Harpool of the U.S. District Court Western District of Missouri to dismiss the lawsuit earlier this month.

The state argues the case is part of a growing nationwide effort by the hemp industry to overturn similar state laws.

“The industry’s playbook is well established,” the motion to dismiss states, citing other federal cases where the challenges against other state legislation regulating intoxicating hemp have failed.

Plaintiffs hit back in their response this week, saying that Missouri’s law is different from the other states cited. These products will be considered marijuana in Missouri under the new law, they argue, and that’s where the legislation gets “unconstitutionally vague.”

The federal law distinguishing marijuana and hemp has brought intense debate both in the legislature and courts nationwide since Congress legalized hemp in 2018.

For Missouri, the lawsuit is the latest episode in a long saga to regulate intoxicating hemp products that, in previous years, has ended with lawmakers throwing their hands up in frustration.

When Congress legalized hemp in 2018, it opened a door for intoxicating products like hemp-derived THC beverages that are now found in grocery stores and bars throughout the state.

Congress closed that loophole in November by passing a federal ban that’s set to go into effect November 12. Missouri lawmakers said they intended to mirror that language by a law passed this spring.

However, plaintiffs argue in the lawsuit that the result is “a single product is simultaneously legal ‘hemp’ and illegal ‘marijuana.’”

The state argues in its motion to dismiss that it prevented this scenario because it “enacted provisions to guard against confusion.”

“In other words, to the extent that a hemp-derived cannabinoid meets the statute’s definition of ‘hemp’ and is not included in any of the statute’s exclusions from ‘hemp,’ then the product is not a ‘hemp-derived cannabinoid product’ for purposes of HB 2641’s central mandate,” according to the state’s motion. “It is that simple.”

The bill, sponsored by Republican state Rep. Dave Hinman of O’Fallon, will prohibit hemp products from containing more than 0.4 milligrams of THC per container, which is among the limits included in a provision in the federal spending bill Congress approved last year.

Even if Congress reverses course and decides to allow the sale of these products, Hinman’s bill would only permit them to be sold in Missouri’s licensed marijuana dispensaries. And if Congress chooses to delay the ban, Missouri would still ban all products, except for intoxicating beverages.

However, plaintiffs argue beverages are not specifically stated as being exempt.

The law lists types of products that would go into effect if there was a delay, which includes “any solid candy, gummy, chewable product, tablet, capsule, oil, baked good, or other solid edible.” It also includes products “that can be smokable or vapeable in the form of raw plant material, flower, or bud material and that contain any amount of tetrahydrocannabinolic acid.”

Beverages are thought to be allowed because they aren’t on the list of things that would go into effect. However, critics have said other products might be unintentionally exempt because they are not listed here, not just beverages, and the law just creates another loophole. Plaintiffs point to the carve-out clause as further reason the law is “difficult to parse.”

This list has become a bigger focus because Congress is currently considering delaying the federal ban.

Earlier this month, the U.S. Senate approved a measure to fund federal agencies until December 11, and it includes delaying the federal ban on intoxicating hemp THC products until that date.

It now goes back to the U.S. House for final approval before heading to the president’s desk.

This story was first published by Missouri Independent.

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“There are products that have not been subject to the same rigorous testing that the medical marijuana requires.”

By Stewart Yerton, Honolulu Civil Beat

It happens all the time now at Oʻahu Dispensary and Provisions in Waikīkī: A prospective customer like Blake Birdwell comes looking for a pre-rolled hemp cigarette or hemp-based edible, only to find the kiosk’s shelves are empty of such goods—by recent order of the Hawaiʻi Department of Health.

“It’s really shitty,” Birdwell said on a recent afternoon after making the rounds at other shops like Natural Mystic, Vape Hawaiʻi and Hawaiʻi’s Cheapest. “They’re all telling me, ‘No.’”

It’s a new reality for people like Birdwell who until recently were able to purchase a range of THC products without a medical marijuana card at dozens of shops across ​​the state—often at a lower price than the products for sale at Hawaiʻi’s officially licensed medical marijuana dispensaries.

The state has now cracked down on sellers of hemp-based products that had been operating under a loophole in federal law, and that’s set up a battle in which Oʻahu Dispensary and Provisions’ owner, Lance Alyas, has asked a federal judge to stop the crackdown.

The suit, which alleges the state has improperly recriminalized federally legal hemp, has gained national attention in legal news reports. The free-market libertarian magazine Reason, which generally opposes government-regulated monopolies, has also weighed in.

It’s the latest iteration of an ongoing struggle to regulate cannabis in Hawaiʻi, which has become widely available for adults to use recreationally in two dozen states.

It’s also a matter of life and death for Alyas’ business, he says, which operates four locations on Oʻahu.

“We have 20 people at risk of losing their jobs,” he said.

Booming Market For Low-THC Hemp Products

Hemp is the same plant species as cannabis sativa—or marijuana—which is a federally controlled substance, though hemp has been historically grown for non-intoxicating uses and contains lower levels of tetrahydrocannabinol or THC. Congress’s 2018 Farm Bill made hemp legal as long as the plants contained no more than 0.3 percent delta-9 THC, the ingredient that gets people high, by weight.

That led to a national flood of products—including gummy candies, vapes, drinks and pre-rolled cigarettes—containing THC derived from federally legal hemp.

In 2020, the Hawaiʻi Legislature passed a law making it legal to grow hemp, but not to produce or sell hemp-based THC products.

Such products proliferated legally on the continent, however, thanks to the 2018 farm bill. By 2024, the hemp-based cannabinoid market had grown to $3.5 billion and was expected to reach $4.4 billion by 2029, the Brightfield Group, a consumer goods research firm reported.

Others, such as Portland-based market researcher Beau Whitney, estimate the market now is actually closer to $30 billion to $44 billion, thanks in part to THC beverages.

Adult beverages containing THC derived from hemp have become so popular and ubiquitous that even Target has begun selling the drinks in hundreds of stores in four states.

Until recently, Hawaiʻi residents could order drinks online, shipped to their door, from brands with names like Willie’s Remedy+, produced by the singer Willie Nelson.

The challenge for Hawaiʻi regulators has been how to deal with such products, which are legal under federal law, coming into the state, where they weren’t supposed to be sold.

‘Premier Pakalolo Provider’ Lobbied For Change

Noa Botanicals is one of Hawaiʻi’s eight licensed medical marijuana dispensaries not subject to the crackdown. Although technically a maker and distributor of medication people can buy only with a doctor’s approval, Noa Botanicals’s marketing looks more like that of a lifestyle brand—not a medical product for patients seeking pain medication.

Its Instagram page, for instance, calls itself “Hawaii’s Premier Pakalolo Provider” and carries the slogan “Find your Hawaiʻi High.” A recent post shows greenhouse workers posing with big marijuana plants above the text “Bud Huntaz out here baggin’ da real trophies.” Other posts feature local music artists HIRIE and Sierra Lucia.

Starting in late 2024, Noa Botanicals’s chief executive, Karlyn Laulusa, began lobbying House Consumer Protection and Commerce Committee Chair Scot Matayoshi (D) and other lawmakers about unlicensed retailers selling hemp-based THC products.

The crux of the problem, as Laulusa described it in emails to lawmakers, was that the licensed, highly regulated dispensaries were losing business to unregulated retailers selling hemp-derived products that were illegal in Hawaiʻi.

The number of unlicensed retailers had boomed from 10 on Oʻahu in 2024 to 74 by early 2025, she wrote, and were taking over the market. Lualusa cited a market analysis from the Department of Health estimating that out of a total annual market of $198 million to $360 million, only $60 million was going to licensed dispensaries. The rest—$138 million to $300 million annually—was going to the unregulated market.

While all of this was happening, buyers were dropping out of the official medical marijuana program. In December 2021, there were 34,125 Hawaiʻi residents with a medical marijuana card, according to the Hawaiʻi Department of Health. DOH’s most recently available report, from the end of last year, shows 28,735 people had cards—a 16 percent decline.

Meanwhile, Laulusa told lawmakers that the Department of Health’s Office of Medical Cannabis Control and Regulation had authority over only the regulated dispensaries. The regulators couldn’t do anything about the unregulated ones.

The result of Laulusa’s lobbying efforts was Act 269 of 2025, which was supported by the Honolulu Police Department and the prosecutor’s office, as well as two other licensed dispensaries, Aloha Green Apothecary and Cure Oahu.

The law, combined with interim administrative rules, gave the health department the ability to require all sellers to register with the agency and open their stores to inspection by cannabis control agents who could tell the retailers what products they needed to remove from their shelves.

As Andrew Goff, chief of DOH’s Office of Medical Cannabis Control and Regulation, describes it, ACT 269 and administrative rules gives the office the ability to enforce existing law. The registration requirement enables the office to know what retailers are selling cannabis products, so the office can let the retailers know what products are allowed and what are not.

Alyas, who obtained the correspondence between Noa Botanicals’s Laulusa and Matayoshi through a public records request, questioned whether lawmakers should be working so closely with industry executives to shape a new law.

Laulusa did not respond to requests for comment.

Matayoshi said it’s part of his job to communicate with industries the state closely regulates and solve problems. Not talking to the regulated industry, he said, would be failing to do due diligence.

“If we’re going to be regulating doctors,” he said, for example, “I think we should be talking to doctors.”

In any case, DOH began enforcing the rules in July, which has led to the situation where people like Birdwell can’t get pre-rolled hemp reefers from places like Oʻahu Dispensary and Provisions.

As president of the Drug Policy Forum of Hawaiʻi, Nikos Leverenz generally supports legalization and regulation of adult-use cannabis. Although he testified against Act 269, Leverenz did say DOH’s enforcement rules can provide a useful framework for regulating sales of cannabis sold to adults—if policymakers legalized such sales outside of medical marijuana dispensaries.

“The DOH has the authority to do what it’s doing now, but I don’t think it’s in the best interest of consumers,” he said. “And it’s certainly not in the interest of businesses outside of the licensed cannabis dispensaries.”

Economic Protectionism Or Consumer Protection?

This echoes one of Alyas’s main complaints: that policymakers are favoring the licensed dispensaries over anyone else, engaging in economic protectionism of a medical cannabis dispensary industry that’s had the benefit of a government-imposed oligopoly for a decade.

When the Legislature established the medical dispensary program in 2015, it limited the number of licenses to eight, with each licensee permitted to operate two retail dispensaries. Over time the Legislature increased the number of dispensaries a licensee can run to four if the licensee can show the location is needed to serve a rural or underserved population.

Alyas questions why, if the market calls for more retail locations, policymakers haven’t simply granted more licenses, rather than letting the same eight businesses, which he calls “the Hateful Eight,” expand operations.

More pointedly, Alyas questions the Department of Health’s 2025 decision to let Noa Botanicals open a new retail location on Royal Hawaiian Avenue under the statutory provision allowing new locations in rural or underserved areas, when there already were two competing licensed shops in Waikīkī.

DOH said there was only one licensed dispensary at the time it approved Noa Botanicals’s request to open its Waikīkī location, and there are now a total of two in Waikīkī.

The medical marijuana control office makes its determinations based on the licensee’s ability to serve and supply patients and an “assessment of the number of registered patients residing in the relevant area in relation to the capacity of the surrounding dispensary locations,” DOH said.

Licensed dispensaries are subject to numerous regulations and are fundamentally different from hemp retail stores, the department said.

Matayoshi, the House Consumer Protection and Commerce Committee chair, says regulation is not simply about protecting the network of dispensaries and affiliated production facilities the state has set up to produce and sell medical marijuana.

It’s also about protecting consumers from untested, hemp-based THC products previously sold by unlicensed retailers.

“There are products that have not been subject to the same rigorous testing that the medical marijuana requires,” he said.

Matayoshi also took issue with the federal government’s carving out low-THC hemp from its schedule of controlled substances, which includes marijuana.

“They try to draw a difference,” he said. “There’s not any. If hemp didn’t have the same effect people wouldn’t buy it.”

Federal Loophole Set To Close

Meanwhile, Alyas’s lawsuit remains alive in Honolulu federal court.

Among other claims, Alyas argues that Hawaiʻi’s law violates the U.S. Constitution’s supremacy clause by criminalizing hemp that Congress legalized. It also challenges the state’s law under a constitutional doctrine known as the “dormant commerce clause,” which limits states’ ability to pass laws interfering with interstate commerce.

Hawaiʻi Attorney General Anne Lopez’s (D) office has countered that the supremacy and dormant commerce clause arguments don’t apply and has asked the court to deny Alyas’s request for a court order preventing the state from enforcing the law.

The issues concerning Hawaiʻi’s low-THC hemp law soon may be moot. In 2025, President Trump signed a bill that redefines hemp, effectively closing the loophole in the farm bill that allowed for the wave of hemp-based THC products to flood the market.

The new measure was supposed to take effect in November, but the Senate passed a bill pushing the deadline back until December.

Beau Whitney, the Portland-based hemp market researcher, has been following Congress’s movements closely. He said the new hemp definition threatens the whole industry and could have unintended consequences for industrial hemp.

While some in Congress, including U.S. Sen. Rand Paul, have been pushing back, Whitney isn’t counting on those efforts to do anything, although he said, “There might be a diving catch.”

This story was first published by Honolulu Civil Beat.

Photo courtesy of Brian Shamblen.

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