Seven hemp operators in Virginia have asked a federal court to halt new limits on consumable hemp products, saying the rules could leave them with unusable stock, force layoffs, and threaten the survival of some businesses.
The lawsuit was filed July 31 in the U.S. District Court for the Western District of Virginia, less than three weeks before the restrictions are scheduled to begin on August 15.
The businesses are challenging a provision included in the state budget that removes an existing allowance for products containing more than 2 mg of THC when the amount of CBD is at least 25 times higher per package. Once the change takes effect, most consumable hemp products sold in the state will be limited to 2 mg THC while still being required to meet the 0.3% THC concentration threshold per package.
Among the plaintiffs is Barbara Biddle, founder and chief executive of District Hemp Botanicals. She said the new rules could leave her company unable to meet its financial commitments after investing under the previous regulatory system.
Biddle said the business has already reduced its workforce and could be forced to close its Leesburg location. Court documents state that District Hemp has roughly $10,000 worth of inventory that could be affected and over $181,000 in debts to creditors.
The lawsuit contends that Virginia’s action violates constitutional protections, including due process and equal protection, and amounts to an improper taking of private property. The businesses are seeking an injunction, financial damages, legal costs, and a ruling declaring the provision unconstitutional.
The other plaintiffs are Redfern Hemp Co., Nova Hemp & Agriculture, Pure Elkton Manufacturing, Wellness Warriors, Simply Hemp, and Cypress Hemp II.
According to the complaint, the companies learned July 6 that the exception would disappear, leaving them approximately six weeks to change formulations, update labels, alter manufacturing arrangements, and address inventory that could no longer legally be sold.
Nova Hemp operations manager Travis Lane said his company has spent roughly 18 months preparing a statewide beverage distribution operation. Products already produced, he said, could become unsellable.
State officials maintain the changes are needed as intoxicating hemp products become widely available through retailers that do not face the same controls as licensed cannabis businesses.
The dispute comes as Virginia prepares to launch regulated recreational marijuana sales on July 1, 2027. The Cannabis Control Authority is expected to oversee that market and hemp regulations.
As this lawsuit makes its way through the court system, the outcome will be watched by marijuana companies like Canopy Growth Corp. (NASDAQ: CGC) (TSX: WEED) as it could have ramifications for the trajectory of the cannabis industry.
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