Tag Archives: transportation

Next Chapter in the Big Sky Case: Idaho State Court Approves Seizure of Hemp

On January 21, 2020, an Idaho state court held the Idaho State Police had the authority to seize a shipment of federally lawful hemp that was transported through Idaho in January 2019. Idaho State Police v. One White 2013 Freightliner Commercial Vehicle et al. Although the hemp businesses involved had turned to federal courts for help, when we last left off with the story, the Ninth Circuit had held that the federal courts should abstain from hearing the case until the Idaho state courts fully resolved both the pending criminal and civil actions. Big Sky Scientific LLC v. Jan Bennetts et al.[1]

Big Sky Scientific, LLC, a Colorado-based hemp processor, had purchased hemp from a state-licensed hemp cultivator in Oregon after passage of the 2018 Farm Bill. The parties arranged to ship the hemp from Oregon to Colorado via motor carrier. En route to Colorado, the shipment entered Idaho, where the Idaho police seized the cargo and arrested the driver, alleging violations of Idaho state law. Idaho initiated a state court criminal proceeding against the driver, and a state court civil proceeding against the hemp itself, to ensure the hemp would not be returned to Big Sky.

In response, Big Sky filed a motion for a temporary restraining order and preliminary injunction in federal court to force the Idaho State Police to return the seized cargo and stop seizing hemp shipments that pass through the state. The federal District Court ruled in favor of the Idaho State Police, and on appeal, the Ninth Circuit declined to rule on the merits of the case, and instead sent it back to state court. Shortly after the Ninth Circuit’s ruling, prosecutors announced the state reached a plea deal with the trucker that had been charged with illegally transporting hemp through Idaho. With the criminal case resolved, only the civil proceeding against the hemp itself remained.

In the state court civil proceeding the state police “implicitly conceded that the plant and plant parts it seized were entirely low-THC C. sativa.” With this fact established, the court turned to the statutes at issue—the 2014 Farm Bill, the 2018 Farm Bill, and the Idaho Controlled Substances Act—to consider whether federal law regarding an entity’s ability to transport hemp in interstate commerce preempted Idaho state law. Central to this argument is a provision in the 2018 Farm Bill that provides “No state or Indian tribe shall prohibit the transportation or shipment of hemp or hemp products produced in accordance with” the Agricultural Marketing Act.

It was undisputed that the hemp seized by the state police was cultivated prior to passage of the 2018 Farm Bill. Therefore, in order for Big Sky to prevail, the court would need to find the provision of 2018 Farm Bill that protects hemp transportation applied retroactively to hemp cultivated under the 2014 Farm Bill. The Idaho police argued it did not, and the court agreed: “the plain language of the [2018] Farm Bill . . . applies only to low-THC C. sativa grown after the enactment of the 2018 Farm Bill and after the various regulations . . . have been promulgated.”

The court then turned to the question of whether the hemp at issue, which was grown in accordance with Oregon state law, was even compliant with the 2014 Farm Bill. The court held that Oregon’s 2014 hemp program was non-compliant for two crucial reasons.

First, Big Sky argued that the Oregon cultivator’s sale of his hemp crop “may be considered research into the marketing” of hemp—a common assertion among hemp businesses that sell their crops and are licensed pursuant to a 2014 Farm Bill program. But the court scoffed at that rationale. “That argument is absurd on its face. . . . he wasn’t growing the crop to help the Oregon Department of Agriculture do research, he was trying to make money.”

Second, the court found Oregon’s hemp law was so dissimilar to both the 2014 and 2018 Farm Bills that hemp cultivated under Oregon’s program could not be considered compliant with federal law. The 2014 and 2018 Farm Bills define hemp as only those Cannabis sativa L. plants with a THC concentration of 0.3% or less, but the Oregon hemp laws only require the 0.3% THC concentration to apply crop wide. “Through the miracle of legal linguistics and basic math, C. sativa plants that would be ‘marijuana’ under Oregon law if grown individually, suddenly became ‘hemp’ if grown in the right field.” Additionally, while federal law defines hemp only with respect to Cannabis sativa L., Oregon law does not limit the definition to only that strain of cannabis. Thus, a field of Cannabis indica with a crop-wide average of 0.3% THC would be lawful hemp in Oregon, but illegal federally. Accordingly, the Court found there is insufficient evidence that the hemp at issue was botanically within the federal definition of cannabis permitted under the 2014 Farm Bill

This last holding could portend continued problems for hemp transportation through Idaho, and perhaps elsewhere. For example, while this litigation was ongoing, in November 2019, Idaho Governor Brad Little issued executive order 2019-13, which ordered “the State of Idaho permit, on and after October 31, 2019, the interstate transportation of hemp produced in accordance with the 2014 Farm Bill or the 2018 Farm Bill and the rules and regulations promulgated thereunder.” Although clearly intended to prevent future litigation on this issue, under the Idaho state court opinion, if a state in which the hemp was grown has a definition of hemp not identical to the federal definition, the grower/transporter might be required to offer proof that the its hemp meets the federal definition. Stay tuned.

For Further Information

 If you have any questions about this blog post, please contact David Landau, Joe Pangaro, any of the attorneys in our Cannabis Industry Group or the attorney in the firm with whom you are regularly in contact.

[1] Duane Morris filed an amicus brief on behalf of the American Trade Association for Cannabis and Hemp in support of Big Sky, arguing that an adverse ruling would have a serious negative impact on the hemp industry. (Duane Morris is the national law firm partner of the American Trade Association for Cannabis and Hemp.). Duane Morris has previously written about the oral argument before the Ninth Circuit and the court’s subsequent decision that remanded the case to state court.

Ninth Circuit Hears Oral Argument in Landmark Hemp Transportation Case

On August 28, 2019, a three-judge panel of the Ninth Circuit Court of Appeals, Judges Hawkins, McKeown and Bybee heard oral argument in Big Sky Scientific LLC v. Jan Bennetts et al.

To review the background briefly, Big Sky Scientific, LLC, a Colorado-based hemp processor, purchased federally lawful hemp from a state-licensed hemp cultivator in Oregon. The parties arranged to ship the hemp from Oregon to Colorado via motor carrier. En route to Colorado, the shipment entered Idaho, where the Idaho police seized the cargo and arrested the driver, alleging violations of Idaho state law. Idaho initiated a state court criminal proceeding against the driver, and a state court civil proceeding against the hemp itself, to ensure the hemp would not be returned to Big Sky. In response, Big Sky filed a motion for a temporary restraining order and preliminary injunction in federal court to force the Idaho State Police to return the seized cargo and stop seizing hemp shipments that pass through the state. The District Court denied Big Sky’s motion, and Big Sky appealed. That appeal was the basis of the oral argument. Duane Morris filed an amicus brief on behalf of the American Trade Association for Cannabis and Hemp in support of Big Sky, arguing that an adverse ruling would have a serious negative impact on the hemp industry. (Duane Morris is the national law firm partner of the American Trade Association for Cannabis and Hemp.)

View the full Alert on the Duane Morris LLP website.

USDA Memo Clarifies Key Provisions Regarding Hemp in the 2018 Farm Bill

The Agriculture Improvement Act of 2018 (the “2018 Farm Bill”), signed into law on December 20, 2018, altered the federal government’s treatment of hemp in a number of ways. The 2018 Farm Bill expanded the definition of “hemp” to include, explicitly, derivatives, extracts and cannabinoids, and removed hemp from the definition of federally unlawful marijuana under the Controlled Substances Act (CSA). See 2018 Farm Bill, Pub. L. No. 115-334 §§ 10113, 12619, 132 Stat. 4490. Notably, the 2018 Farm Bill also explicitly permitted the interstate transportation of hemp: “No State or Indian Tribe shall prohibit the transportation or shipment of hemp or hemp products produced in accordance with subtitle G of the Agricultural Marketing Act of 1946 (as added by section 10113).” Id. at § 10114.

Subtitle G, for its part, provides that “[n]othing in this section prohibits the production of hemp in a State or the territory of an Indian tribe—(1) for which a State or Tribal plan is not approved under this section, if the production of hemp is in accordance with section 297C or other Federal laws (including regulations).” Id. at § 10113 (emphasis added). This final clause, “or other Federal laws,” is significant because the Agriculture Act of 2014 (the “2014 Farm Bill”) is also a “federal law,” and to date approximately 40 states have instituted industrial hemp programs pursuant to the 2014 Farm Bill. Under the language of the 2018 Farm Bill, then, states may not interfere with the interstate transportation of hemp produced in accordance with either the 2014 Farm Bill or—once regulations are implemented and state hemp programs are approved—the 2018 Farm Bill.

Notwithstanding the language of the 2018 Farm Bill, the absence of federal regulations implementing the new law and sanctioning state hemp programs revised pursuant to the 2018 Farm Bill has caused significant confusion regarding the true impact of the act.

View the full Alert on the Duane Morris LLP website.

No Hemp Transport Through Idaho

A recent decision by a Federal Magistrate Judge for the United States District Court for the District of Idaho upheld the seizure of an industrial hemp shipment in January after the enactment of the 2018 Farm Bill.

On January 24, 2019, Big Sky, a Colorado-based company, shipped industrial hemp from Oregon thorough Idaho on its way to Colorado. The hemp was seized in Idaho and the driver arrested for illegal transportation of marijuana. The crime carries a 5 year mandatory sentence. Big Sky sued for a temporary restraining order to release the hemp under the 2018 Farm Bill. The Court found that because no plan from the State of Oregon had been approved by the Department of Agriculture, the seized hemp was not produced in accordance the 2018 Farm Bill. The Court held that at this point time, without USDA approval of a state hemp plan, the Interstate Commerce Clause provisions of the Farm Bill do not apply.  A Temporary Restraining Order was denied on 2/2 and the Preliminary Injunction was denied on 2/20. Big Sky Scientific LLC v. Idaho State Police et al., No. 1:19-cv-00040-REB (D. Idaho, February 2, 2019). The case is on expedited appeal to the Ninth Circuit. Opening brief is due 3/20.

This decision is contrary to the intent, if not the letter, of the Farm Bill. It creates confusion about the what is permissible now, prior to USDA regs and approval of state plans.