An Ohio law that went into effect in March and restricts federally compliant hemp products to the state’s licensed cannabis market won’t be enforceable for the next 14 days, and perhaps longer.
A federal judge granted 10 companies that sell hemp beverages and other hemp-derived products a temporary restraining order (TRO) on June 15, blocking Ohio officials from “taking any criminal, civil, administrative or regulatory enforcement action” against them for at least two weeks, so long as their activities fall within the federal parameters of the 2018 Farm Bill.
U.S. District Judge Jeffrey J. Helmick granted the TRO after Cleveland-based Titan Logistics Group and its fellow plaintiffs filed a class-action lawsuit on June 4 in the Northern District of Ohio, arguing that Senate Bill 56, which Gov. Mike DeWine signed in December, violates the U.S. Constitution because of its “discriminatory effect on interstate commerce.”
Under S.B. 56, Ohio redefined hemp to include a 0.3% total THC threshold (versus delta-9 THC) and to ban intoxicating hemp products that contain more than 0.4 milligrams of total THC per container, as well as any cannabinoids that are unnaturally produced or synthesized outside of the plant. These provisions mirror a forthcoming federal ban that’s set to take effect in November 2026.
The problem?
Ohio implemented its legislation eight months before the federal ban goes into effect, requiring activities that are still federally compliant to be conducted exclusively by state-licensed cannabis operators.
“The practical effect is stark: The moment plaintiffs’ out-of-state, federally legal hemp products cross Ohio’s borders, plaintiffs and their owners, employees and business partners are subject to controlled-substance prosecutions for possessing or selling Ohio ‘marihuana,’ whereas the favored, in-state class of licensees is conditionally immune from prosecution so long as they stay inside the close[d]-loop supply chain,” the lawsuit states.
The plaintiffs argued that this eliminates all out-of-state competition and most in-state competition. They filed the lawsuit against 96 county and municipal prosecutors’ offices, with the state of Ohio filing a motion to intervene.
Several of the defendants moved to dismiss the case during a June 11 hearing, but Helmick denied those motions, stating that the county and municipal prosecutors were properly named because they are tasked with enforcing the state law.
Ohio Attorney General Andy Wilson’s office contended that Helmick should decline to hear the case, in part because the U.S. Supreme Court has held that “when a federal constitutional claim is premised on an unsettled question of state law, the federal court should stay its hand” so that state courts have the opportunity to settle the question.
But Helmick was not persuaded that the construction and application of S.B. 56 are unsettled in Ohio.
“At no point has the state of Ohio disputed plaintiffs’ interpretation of that statute,” Helmick wrote. “And neither the state nor any of the named defendants have pointed to a case in which an Ohio court has indicated that Senate Bill 56 means anything other than what plaintiffs allege it does.”
Key to the plaintiffs’ argument is that “America’s national economy could not exist if individual states could discriminatorily obstruct the interstate flow of otherwise federally lawful goods,” and that S.B. 56 violates the dormant Commerce Clause by favoring in-state licensees, including roughly 200 cannabis dispensaries.
Instead of enacting a “neutral ban” on both in-state and out-of-state hemp products, the plaintiffs argue that S.B. 56 benefits only the economic interests of companies that maintain an in-state physical presence.
“If a state discriminates against hemp-derived products manufactured in another state, then the second state may retaliate against the first state’s exports, triggering a civil trade war,” the lawsuit states. “The Ohio statutory scheme at issue would reserve Ohio’s market for hemp-derived products – a market in which plaintiffs lawfully participate on a national scale under current federal law – for approximately 200 in-state, Ohio marijuana dispensaries. This is a classic dormant Commerce Clause violation.”
In determining that the plaintiffs will likely succeed on the merits of their dormant Commerce Clause claim, Helmick said that Ohio “cannot circumvent the unconstitutional character” of S.B. 56’s restrictions, allowing only companies that source, manufacture and distribute hemp-derived products within Ohio to obtain a license.
The judge also determined that the plaintiffs would suffer irreparable harm absent the TRO.
Helmick did recognize that the state raised “several substantial public health concerns” to defend more tightly regulating intoxicating hemp products that largely bypassed consumer safeguards – from testing to labeling and age-gating – until the governor and state lawmakers stepped in.
“I acknowledge the state’s strong interest in maintaining consumer safety in this product market, but I conclude enforcement of a likely unconstitutional statute does not serve the public interest,” Helmick wrote.
The TRO will expire on June 29 unless it’s extended. The judge will set a preliminary injunction hearing in a future order.
