Iowa Beverage Companies File Lawsuit Challenging State Changes To THC Potency Restrictions

Two Iowa-based beverage manufacturers, Climbing Kites and Field Day Brewing Co., have initiated legal action against the state’s Department of Health and Human Services (DHHS), challenging new THC potency restrictions. The lawsuit, filed in U.S. District Court, arises from concerns over the state’s interpretation of laws regulating THC levels in hemp-derived products, reported Iowa Capital Dispatch.

Legal Dispute Arising From Recent Changes

In 2019, the Iowa Legislature passed the Iowa Hemp Act, aligning state law with the 2018 federal farm bill to legalize hemp production and exempt hemp from the state and federal definitions of marijuana. This legislation facilitated the creation of hemp-based consumables within the state, with a subsequent bill in 2020 capping THC concentrations at 0.3% or less.

However, the landscape shifted dramatically in 2024 when House File 2605 was passed, redefining THC potency limits. The law, effective July 1, sets a new threshold of no more than 4 milligrams of THC per serving. This will significantly impact existing products. Climbing Kites and Field Day, which had been producing beverages well below the previous cap, find themselves facing a drastic reduction in their product portfolio.

See Also: Iowa Lawmakers Risk Ruining Hemp Businesses With New Bill, Business Owner Explains Why

Conflict Of Interpretation

The heart of the conflict lies in DHHS's guidance that reinterprets a “serving” as one 12-ounce can, effectively reducing the permissible THC amount per container and, according to the plaintiffs, misaligning with the statute allowing up to 10 milligrams per container. This reinterpretation would render about 80% of the companies’ current beverage lines illegal, potentially affecting 85% of their revenue.

The lawsuit emphasizes a violation of the Supremacy Clause of the U.S. Constitution, arguing that the federal Food and Drug Administration (FDA) should preempt state law. The companies seek to stop the enforcement of the new limits. This would be the case if a judicial declaration stated that the state's interpretation of House File 2605 is unconstitutional.

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Restricting Cannabis Laws

The ongoing legal battle over House File 2605 started with House Study Bill 665, which was renumbered as 2605 after approval. Warnings were issued at that early stage, as the bill was perceived as jeopardizing the hemp business sector by imposing stringent regulations that could stifle growth and innovation.

Business owners expressed concerns that overly restrictive laws would limit business operations. They warned that it could inadvertently push consumers toward the black market. Now, as the law will go into effect shortly, the companies are hoping to get an immediate injunction preventing this.