The market for CBD and other hemp cannabinoids in New York state remains under serious threat after a federal judge tossed out a lawsuit by a group of producers and sellers Monday.
Claiming enforcement of new rules governing hemp-derived cannabinoid products cost them millions of dollars in losses, the state-licensed hemp operators filed suit against the New York Cannabis Control Board (CCB) and Office of Cannabis Management (OCM) over raids under revised hemp regulations released in November.
Judge Mary Kay Vyskocil in the U.S. District Court for the Southern District of New York (SDNY) dismissed the case yesterday on procedural grounds, essentially letting a broader crackdown on New York’s illicit cannabis trade continue to envelop the market for delta-8 THC and other intoxicating cannabinoids made from hemp.
Stakeholders have said enforcement actions by the state have had an “immediate and catastrophic effect” by freezing the market for CBD and other cannabinoids. The lawsuit alleged that the two state agencies violated the civil rights of the companies by issuing and enforcing overly strict rules on hemp products.
The plaintiffs sought to press their advantage in the SDNY after the state Supreme Court ruled in their favor in an earlier, similar case in state courts. That decision allowed them to overcome strict emergency measures put in place by the state last August that were intended to spur enforcement of rules adopted in 2016 that prohibit the sale and possession of all such compounds.
After the state Supreme Court ruled against the state agencies in November, the CCB and OCM issued further regulatory updates. It is those most recently revised rules and their enforcement that were challenged in the complaint tossed out by Judge Vyskocil yesterday.
The plaintiffs are CBD producers, distributors and sellers, and some are obviously trading in hemp products that contain synthetically produced compounds such as delta-8 THC that in concentrated form can give users a “high.” Products that include the compounds have been called “diet weed” or “marijuana light,” and are marketed as alternatives to marijuana.
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