A new Ohio law began prohibiting intoxicating hemp products on March 20, but one judge is telling law enforcement officials to hold their horses.
Sandusky County Common Pleas Court Judge Jeremiah Ray granted a temporary restraining order (TRO) on March 24 that prevents the Fremont Police Department and “all who may act in concert with them” from enforcing a statewide ban under Senate Bill 56, legislation that Gov. Mike DeWine signed into law in December.
Under S.B. 56, Ohio lawmakers aligned the Buckeye State’s definition of intoxicating hemp products with a forthcoming federal ban that will be implemented on Nov. 12.
Ohio’s problem – at least in Sandusky County – is that S.B. 56 provides “exclusive” rights to licensed cannabis businesses to sell certain intoxicating hemp products that will otherwise remain federally legal for the next seven-plus months, Ray wrote in the TRO.
“The discriminatory effects are apparent: no out-of-state hemp or hemp beverages will be legal in Ohio, and possession or sale may generate felony charges, whereas sale of materially similar product by the favored class of federally illegal marihuana dealing companies would be legal under the new Ohio law,” Ray wrote. “This favoritism suggests that the dormant Commerce Clause challenge is likely to succeed on the merits.”
The lawsuit was filed by Seattle-based North Fork Distribution I LLC, which does business as Cycling Frog, a hemp-derived THC and CBD product manufacturer, including hemp-derived beverage products.
Cycling Frog is also a plaintiff in a different lawsuit seeking to prevent DeWine’s line-item veto on S.B. 56, which eliminated a carve-out for cannabinoid hemp beverages to continue to exist in Ohio’s marketplace through the end of 2026. The company anticipates losing approximately 20% of its business-to-business sales in Ohio due to the governor’s veto.
The TRO in Sandusky County is effective until April 28 and fully protects Cycling Frog and third-party entities that facilitate the company’s business, “such as distributors, warehousing and logistics firms,” Ray wrote.
According to the Sandusky County Clerk of Courts, Cycling Frog’s attorney, Andrew Mayle, also filed a motion on March 30 asking the judge to certify a class action, potentially blocking S.B. 56 from being enforced statewide.
Mayle told The Toledo Blade that “that’s the next step in the case,” and if the judge certifies the class-action motion, “then basically the bill – with respect to the traditional hemp industry – will not be enforceable in Ohio.”
In the TRO, Ray suggested that licensed cannabis dispensaries “and their attendant supply chain” throughout Ohio benefit from the lack of competition, either inside or outside the state, from the hemp product ban implemented under S.B. 56, calling it inherently discriminatory on its face.
The judge said that Ohio’s new law forces state residents who wish to purchase federally legal cannabinoid hemp products to now turn to funding the state’s cannabis industry, which is otherwise engaged in federally prohibited activities.
“The practical effect is to immunize Ohio’s in-state marihuana industry, which Ohio law requires to have an in-state physical presence, from out-of-state competition with respect to federally legal hemp products otherwise sold in interstate commerce,” Ray wrote. “All but the favored, licensed dispensaries with a physical in-state presence face ongoing harm by losing sales that cannot likely be recovered later.”
On April 3, Ohio Attorney General Dave Yost filed a motion to intervene in the lawsuit, according to the clerk of courts.
The court assigned a hearing for April 9.
