Shadow-Banned By Retailers, Iowa Beverage Manufacturers Sue State Regulators Over New THC Law

Iowa beverage manufacturers are embroiled in a legal battle with the state over a new law that restricts THC levels in adult beverages. The companies claim the state knowingly approved 12-ounce cans with up to 10 servings of THC each, contradicting the new law's limits.

Local media reported ten Iowa companies have filed a federal lawsuit to block the enforcement of the new hemp law, which restricts THC levels in consumables.

The companies argue that House File 2605 and House File 2641, passed this year, are preempted by federal law. They allege that the new law needs to be more specific, leaving them uncertain about what constitutes lawful business practices.

Unofficial “Shadow-Banned” By Retailers

The Iowa Attorney General's office argues that no state defines serving sizes for food and beverages because federal law requires companies to determine and label serving sizes.

"To know how many servings are in their products, (the companies) need only look to the side of their cans," the office stated.

The companies argue that the law’s vagueness has led to their products being unofficial “shadow-banned” by retailers. They claim state regulators have refused to clarify which products are legal.

Public Safety And Regulatory Changes

The state's attorneys argue that the litigation stems from the companies’ opposition to public safety measures.

The law limits THC in consumable hemp products to four milligrams per serving. Federal law defines a serving as "an amount customarily consumed," typically 12 ounces for beverages. The companies argue that the state needs to consistently apply this standard, as it previously allowed manufacturers to determine serving sizes.

U.S. District Court Chief Judge Stephanie M. Rose recently denied an initial motion for a preliminary injunction but expressed concerns about the law's vagueness. The companies have incorporated these concerns into their renewed push for an injunction.

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