Maryland Court Ends Hemp Sales Loophole
By Shawn Hauser, Juliana Todeschi and Angela George
Sep 26, 2025
Key Summary:
- Maryland’s Appellate Court reversed a 2023 injunction, ending unlicensed hemp sales and requiring all consumable hemp sellers to obtain state cannabis licenses.
- The state’s Alcohol, Tobacco, and Cannabis Commission (ATCC) warns of fines up to $10,000 and possible effects on other state licenses.
- This move reflects a broader trend of courts upholding stringent state hemp regulations.
After two years in judicial limbo, the Maryland hemp industry finally has an answer: consumable hemp products unequivocally fall under the jurisdiction of the state’s Alcohol, Tobacco, and Cannabis Commission’s (“ATCC”) regulatory scheme and can no longer be freely sold without proper state licensure by any entity, even those in operation prior to the state’s enactment of the Cannabis Reform Act (“CRA”) in July 2023, which imposes strict limits on THC milligram content and on product packaging, labeling, and advertising, in addition to codifying other requirements for cannabis products sold in the state.
The decision in Governor Wes Moore, et. al. v. Maryland Hemp Coalition et. al., released September 9, 2025, reversed a prior preliminary injunction from a lower court that allowed the unlicensed sale of consumable hemp products within the state by businesses in operations prior to the CRA.
A Lawsuit, An Injunction & A Limbo Status-Quo
In July 2023, the Maryland Hemp Coalition, in conjunction with various hemp retailers, farmers, producers, and consumers (collectively “Hemp Coalition”), challenged the constitutionality of the newly passed CRA’s licensing requirement. This requirement sought to prohibit businesses from selling various cannabis products, including consumable hemp products, without a license issued by the Maryland Cannabis Administration (“MCA”), and set other requirements for the sale of such products.
The Hemp Coalition sued to enjoin enforcement of this licensing requirement, alleging the CRA was an unconstitutional taking under the state constitution. In October 2023, the Washington County Circuit Court granted a preliminary injunction, barring the State from enforcing the licensing provision against any party engaged in the lawful sale of hemp-derived products prior to July 1, 2023. As a result, operators in existence prior to July 1, 2023, were not subject to the CRA’s provisions, although the state began licensing new entities under the CRA’s regime.
Injunction Reversal: What’s Next for the Maryland Hemp Market?
On September 9, 2025, the Maryland Appellate Court overturned the circuit court’s preliminary injunction, holding that the lower court erred in issuing the preliminary injunction because the plaintiffs (the Hemp Coalition) were unlikely to succeed on the merits.
Effectively upending the status quo and absent the injunction’s protection, hemp retailers in the state, including all operators in existence prior to July 1, 2023, are now subject to all provisions of the CRA. Such provisions include:
- Defining THC to include delta-9 THC, delta-8 THC, and delta-10 THC, regardless of how the THC is derived;
- A licensing regime for intoxicating THC products, requiring any business selling permissible psychoactive cannabis products to obtain state licensure;
- Setting cannabinoid limitations of 0.5 mg THC/serving or 2.5 mg THC/package if selling without a license issued by MCA (MCA licensees may sell more potent products through licensed channels);
- A prohibition on cannabinoid products “not derived from naturally occurring biologically active chemical constituents,” meaning any permissible psychoactive product contains only cannabinoids that naturally occur in the plant; and
- Packaging, labeling and testing requirements.
In light of this decision, ATCC has issued new enforcement guidance stating that all retail establishments engaged in the sale of intoxicating THC, including those in business prior to July 1, 2023, are on notice that any person or business engaging in the distribution or sale of an intoxicating THC product without the required license issued to them by the MCA is subject to criminal prosecution under Maryland law.
ATCC advises that a conviction of any offense of the licensing, potency, packaging or labeling requirements could result in fines up to $5,000 per offense, with enhanced fines up to $10,000 for offenses involving THC products or destruction of such. Additionally, ATCC advises that a violation could have "potential adverse effects" on any other state-issued license held by the persons or business found in violation of the law.
State-Level Consumable Hemp Regulation: A National Trend
This decision is reflective of a recent judicial trend across numerous jurisdictions, such as the Loki Brands decision out of New Jersey and the Arkansas Bio Gen case out of the Eighth Circuit Court of Appeals to uphold state-level regulations on consumable hemp products, even those that severely limit the marketability of commercial hemp products. These challenges to state-level hemp regulations seem to continue despite an express provision of the 2018 Farm Bill (modifying the U.S. Code) that allows jurisdictions to more strictly regulate hemp than the federal government.
Questions About Entering or Navigating the Hemp Industry?
Are you a hemp operator interested in entering this new market, a retailer looking to expand your intoxicating hemp product lineup across multiple states, or a manufacturer in need of a new compliance strategy? No matter where you find yourself in the hemp sector, Vicente LLP is ready to support you.
Our team has helped shape cannabis and hemp policy nationwide and offers tailored legal and regulatory guidance to navigate today's increasingly fragmented market. Contact us today to schedule a consultation and learn how we can support your growth in the evolving hemp beverage industry.
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