A federal appeals court refused to rule Wednesday on an interstate hemp transportation case involving Big Sky Scientific, a Colorado-based CBD company whose hemp shipment was seized by Idaho State Police in Ada County in January.
The case is closely watched because it highlights conflicts between state hemp laws, and also disagreements over interpretation of federal law—specifically, the Farm Bills of 2014 and 2018, as the latter legalized hemp by removing it from the Controlled Substances Act. The hemp was being transported between two states where hemp is a legal commodity, Colorado and Oregon, but had to pass through Idaho, where it is not. Still, the hemp’s owner—and the industry—argues that the hemp was produced and transported legally.
Big Sky Scientific tried last week to get the U.S. Court of Appeals for the Ninth Circuit to overturn a February ruling by a lower federal court and to return their hemp shipment back to them. The lower found that until the United States Department of Agriculture finalizes regulations for hemp production (known as Subtitle G in the 2018 Farm Bill), and interstate transportation, Idaho State Police and Ada County had a right to seize the shipment.
Had the federal appeals court ruled in Big Sky Scientific’s favor, the case could’ve set a “national precedent for the interstate shipment of hemp,” according to a statement released by the American Trade Association for Cannabis and Hemp in April.
However, the Court of Appeals only ruled that the lower federal court—the US District Court for the District of Idaho—should not have made any decision in the case in the first place, arguing that the matter is more appropriate for Idaho’s state courts. And while the District Court’s ruling was reversed and no longer applies, Big Sky Scientific doesn’t get its hemp shipment back. The case must now be argued in an Idaho state court.
As the USDA works on finalizing regulations for the domestic hemp production program, it issued guidance in May on the interstate transportation of industrial hemp. In his legal opinion, Stephen Vaden, general counsel for the USDA, said that states cannot bar transport of hemp legally produced under the 2014 or 2018 Farm Bill, and that he found the District Court of Idaho’s opinion on the matter “unpersuasive.”
Much of the discussion at the hearing in the federal court of appeals last week centered around whether or not the federal courts should abstain from ruling in the case. Judge Jay Bybee asked Christopher Pooser—an attorney with Oregon-based Stoel Rives LLP and representing Big Sky Scientific—why the company wasn’t arguing the case in Idaho state courts instead of a federal court of appeals.
“We think its a better issue for the federal courts,” said Pooser. “The state courts can only rule on that one load of hemp that was confiscated in January 2019. But the issue is broader than that.”
Companies like Big Sky Scientific are at a disadvantage because they have to add “hundreds of treacherous miles—expensive miles—to their shipping routes,” because they fear seizure of their hemp shipments in states like Idaho which have not legalized hemp, Elijah M. Watkins, also an attorney with Stoel Rives LLP representing Big Sky Scientific, told Cannabis Wire.
Idaho state police seized Big Sky Scientific’s close to 7,000 pounds hemp shipment in Ada County and arrested the driver, who was transporting the hemp from Oregon to Colorado. Ada County’s Prosecuting Attorney Jan Bennetts brought criminal charges against the driver, Denis Palamarchuk, who was hired as an independent contractor by Big Sky Scientific.
Big Sky Scientific argued that the hemp was lawfully produced under the 2014 Farm Bill, which authorized states to launch pilot industrial hemp research programs. The shipment, they said, must therefore be returned to them and Idaho state police must be prohibited from seizing any of their future shipments.
However, Sherry Morgan, an attorney arguing on behalf of Ada County and its prosecutor, Bennetts, said that they do not have enough evidence that the hemp was produced in accordance with the 2014 Farm Bill.
“In fact, the evidence tends to point in the opposite direction that this was purely a commercial endeavor by both the grower and obviously Big Sky as well, that it wasn’t part of a pilot program, it wasn’t part of a research program,” Morgan said.
Big Sky Scientific should have waited until federal hemp production regulations were in place, Morgan added. “They just jumped the gun,” she said. Big Sky Scientific could have also sought advance guidance from Idaho State Police or Ada County on whether their shipment would be allowed to pass through the state prior to transporting it from Oregon, Morgan said.
Big Sky Scientific is “assessing” their next steps, Watkins told Cannabis Wire. “There’s a lot of possibilities and we’re trying to decide the best course of action,” Watkins said.
