Hemp industry hopes Arizona cannabis regulations go up in smoke

The Hemp Industry Trade Association of Arizona plans to appeal a
denied petition that sought to enjoin the state attorney general from
enforcing marijuana laws against sellers of chemically distinct hemp
products.

While federal law differentiates high THC marijuana from
low THC hemp, both of the same plant, cannabis sativa, a state judge
ruled Wednesday that Arizona law prohibits the retail sale of all THC
products.

“The THC products at issue are not ‘industrial hemp’
under Arizona’s Hemp Act. Maricopa County Judge Randall Warren wrote
Wednesday. “Industrial hemp means the plant itself, which the
Legislature has deemed a lawful commodity. Products with psychoactive
THC — even if derived from hemp and regardless of the concentration —
may only be sold through licensed dispensaries.”

Warren denied the
plaintiffs’ motion for preliminary injunction, allowing prosecution of
all THC sales outside of licensed dispensaries. Industry members say
they will soon take the case to the Arizona Court of Appeals.

“We
respect the court, but we believe this reading overlooks federal law and
the Legislature’s intent to foster a thriving hemp market, retail owner
Mohammed Lofty said in a press release. “Our legal team is preparing an
expedited appeal and exploring legislative solutions that will give
retailers and consumers a clear, workable path forward.”

Attorney General Kris Mayes said the court got it right.

“The
law requires marijuana products to be sold in licensed and regulated
dispensaries as approved by Arizona voters,” she said in a statement.

For
now, industry leaders advise retailers not to sell any THC products,
though the state has yet to take enforcement action against any
businesses. In a Friday hearing, a Maricopa County detective said
officers are directed to impound all hemp products they come across, but
to not prosecute retailers pending this litigation.

Under the
2018 Farm Bill, hemp is defined as cannabis with less than 0.3% delta-9
THC, allowing retailers to sell low-THC hemp products like delta-8,
delta-10, and CBD oil, while licensed dispensaries sell higher THC
marijuana.

In March 2024, Arizona Attorney General Kris Mayes
declared all “intoxicating THC products” illegal to sell without a
dispensary license and warned that civil and criminal enforcement would begin in March 2025.

The Hemp Industry Trade Association sued
in April, arguing that no law defines what is or isn’t “intoxicating,”
and that the state must instead base its regulations on the federal 2018
Farm Bill and Arizona’s 2018 Hemp Act.

In an 11-page ruling,
Warren agreed with the plaintiffs that Arizona law doesn’t define
intoxicating, but found that all hemp-derived products fall under the
legal definition of cannabis and therefore should be treated as a
narcotic drug. 

“The issue here is whether ‘industrial hemp’
includes products for human consumption which are made with hemp-derived
THC, and which have less than 0.3% of delta-9 THC by dry weight,”
Warren wrote. “It does not. This is clear from both the Hemp Act and
Arizona’s criminal statutes governing marijuana and THC.”

Arizona’s
2018 Hemp Act, passed as a pilot program, defines hemp as part of the
cannabis plant, not its derived products, and makes clear it should not
interfere with the state’s strict marijuana regulations. The law
requires pre-cultivation testing to differentiate whether the plant is
hemp or marijuana based on delta-9 THC levels, but it does not require
further testing of hemp-derived consumables, which may contain other
cannabinoids like delta-8 or delta-10.

The law also defines “hemp
products” differently from hemp, which Warren says is evidence that the
Legislature intended the two to be treated differently. 

While the ballot initiative
that legalized the sale of marijuana in 2020 clearly excludes hemp from
the definition of marijuana, Arizona’s narcotics statute makes no such
exception, defining marijuana as any part of the cannabis plant.

“By
this definition, things made from THC are prohibited narcotic drugs
under A.R.S. § 13-3408,” Warren wrote. “This includes any product
containing THC derived from the plant cannabis sativa, whether a low-THC
cultivar or a high-THC cultivar. 

At oral arguments
last week, state attorneys argued that they want to regulate
“intoxicating THC products,” but the Hemp Industry Trade Association
says there’s no such legal distinction.

“HITA is correct,” Warren
wrote. “The Hemp Act makes no mention of whether a product is
intoxicating. But it is not the Hemp Act that makes the product legal or
illegal. It is Arizona’s criminal code.”

“The court’s recognition
that Arizona law doesn’t separate ‘intoxicating’ from
‘non-intoxicating’ cannabinoids affirms a key part of our case — and our
position, ” he said in a press release. “I stand with this industry
every single day. This work is meaningful, and it’s worth fighting for.
We are moving forward — with purpose, with resolve, and with the full
strength of our community.”