Industry leaders fight a sweeping state mandate that threatens to dismantle the hemp market and grant existing marijuana licensees a monopoly over all cannabinoid products.
A coalition of hemp businesses filed a federal lawsuit last Thursday in the US District Court for the Western District of Missouri challenging state House Bill 2641, the Intoxicating Cannabis Control Act, which was passed by the legislature and signed by Gov. Mike Kehoe (R) in April. The plaintiffs argue that the state law conflicts with federal law, contains contradictory provisions, and leaves existing legal hemp businesses with no path to continue operating.
The plaintiffs include the MoHemp Trade Association, which represents hemp businesses across Missouri; Lifted Liquids, Inc., a Wisconsin-based manufacturer and distributor of hemp products; and MNG 2005, Inc., a St. Louis-based retailer, manufacturer, and distributor with 55 stores in five states. The lawsuit asks the court to declare HB 2641 unconstitutional and prevent it from taking effect before its November 12, 2026, effective date.
The new law limits the cultivation, manufacture, transport, and sale of hemp-derived products to holders of state marijuana licenses. But those licenses are capped and unavailable to hemp businesses, leaving them with no path to legality and leaving the cannabis market in the hands of a small group of existing marijuana licensees.
"For more than 13 years, we’ve built our business by following Missouri law and advocating for common sense hemp regulations, including age restrictions, testing requirements, and accurate labeling," said David Palatnik, President of MNG 2005 Inc. "HB 2641 is the first law we can’t comply with because it wasn’t written to be complied with. There is no license we can apply for. There is no standard we can meet. There is no clarity in the conflicting definitions. Businesses that have operated legally in Missouri for years are simply left with no lawful path forward and forced to watch everything they’ve built be handed to someone else."
The new law also contains contradictions, defining the same products as both "hemp" and "marijuana" in different provisions and promising not to interfere with interstate hemp commerce while restricting who may transport hemp products through the state. Plaintiffs also argue that it contains effective date provisions so convoluted that businesses cannot determine which products are covered or when. That leaves businesses and law enforcement alike guessing which conduct is legal.
And despite being titled the "Intoxicating Cannabinoid Control Act," the law as written reaches all hemp-derived cannabinoid products, sweeping in even non-intoxicating products such as CBD.
"This isn’t consumer protection. It’s the elimination of an entire legal industry coupled with a government-mandated monopoly," said Jay Patel, MoHemp Trade Association President. "Missouri small businesses are left in utter confusion while the state gives the market to a closed system of big marijuana businesses. Ultimately, Missouri consumers will pay more and have fewer options."
The lawsuit also alleges that the new law is preempted by the federal 2018 Farm Bill, in which Congress legalized hemp nationally and expressly prohibited states from blocking the transportation of legal hemp products through their borders. The lawsuit does not address the looming federal hemp ban, also set for November 12.
"Congress made clear that states cannot block federally legal hemp shipments," said Nick Warrender, CEO of Lifted Liquids. "HB 2641 would do exactly that and force companies like ours to reroute federally lawful shipments around an entire state."
But state Rep Dave Hinman (R), the bill's sponsor, said the lawsuit would most likely fail.
"I believe this is the last ditch effort for the hemp industry," Hinman said. "HB2641 passed the Missouri House, Senate and was signed by the governor. It was vetted throughout the entire process. I don't believe this Hail Mary will get the results the Hemp Trade Association wants, and Missouri will mirror the federal government."
