How Are the Smokable Hemp Bans Affecting the Markets?

Bans on smokable hemp flower have recently begun to surface in an alarming number of states. How are they affecting the markets?

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Why Are The Smokable Hemp Bans Being Initiated?

Why, after all this time working and waiting for hemp to become a legal commodity, are these bans suddenly initiated? Well, there are a couple of reasons.

The first reason is that law enforcement finds it too hard to distinguish between legal level CBD smokable hemp from marijuana containing psychoactive properties.

CBD hemp and intoxicating marijuana both look, smell, and consumed in the same way.

Without access to a large number of on-site testing kits, law enforcement cannot tell the difference between what is legal and what is not. Because of that, the states are dropping the hammer on smokable hemp.

The second reason some states feel cautious about this market might be due to the 2019 vaping crisis. Regulators feel guarded against vaping and smoking products in general due to the number of lung injuries that some have experienced in past years.

How are the bans affecting the smokable hemp market?

Smokable hemp is a multibillion-dollar industry. Every state heading in this direction is another sizable chunk of the market that's feeling the pressure.

According to Marijuana Moment, Texas stands to lose up to $2.9 million in sales tax revenue alone over the next five years. That is, if these bans are not successfully overturned. There is still time, and there is still hope!

Since regulators have started going after smokable hemp flower, this sector of the hemp industry stands to lose a lot; However, some states (like Texas and Indiana) are fighting back.

When Texas legalized hemp in 2019, it forbade the production of hemp products that were made to smoke or vape. That being said, it was not yet technically against the law to sell nor consume these products.

So, rather than illegally manufacture these products within state lines, businesses began to source products from neighboring states to sell in stores across Texas.

The ban on smokable hemp flower has brought all of this success to a halt forcing several hemp companies to join forces and fight for their businesses.

These companies argue that because the law does not ban the use or consumption of hemp (only the manufacturing and selling of it as a smokable hemp product), it only encourages retailers to mislabel products in an attempt to dodge the ban.

For example, a retailer can sell hemp and label it as a tea. Then the consumer can easily buy that hemp as the tea but then choose to unpackage and smoke it the same way they would have had it been labeled as a smokable hemp product.

So, in essence, this retail-ban is not only counterproductive, but it's potentially dangerous.

The COVID-19 crisis has left all state economies confused and looking for ways to ease the pandemic's impact.

This year's series of smokable hemp bans could not have come at a more disheartening time for these states, and unfortunately, do impact the market negatively as a whole.

Are The Smokable Hemp Bans Even Constitutional?

When smokable hemp products became legal to sell and consume, they quickly became the go-to method for consuming CBD.

Many people have been able to replace tobacco with smokable hemp products and are now told they can't. Some companies have decided to fight back, holding tightly to the idea that these bans are unconstitutional.

So...are they?

Well, in Indiana a group of hemp suppliers and wholesalers argued that the hemp ban violated two separate clauses within the constitution.

The supremacy clause declares that the constitution is the highest form of law in the legal system's entirety. So when state laws cause this kind of confusion, judges are required to err on the side of federal law. The 2018 Farm Bill clearly says that interstate transportation of hemp is now federally legal. Therefore, many argue that these bans are in direct conflict with the federal bill.
The second argument is the commerce clause. The commerce clause in the constitution exists to keep states from making laws that burden out-of-state businesses, to protect the businesses within state lines. The smokable hemp bans in each state make transportation through these places with smokable hemp a questionable drive.

While these arguments succeeded in slowing down the ban on smokable hemp within the state—the injunction is being upheld, and it's unclear what the outcome will be.