Missouri Cannabis Operators Take Legal Action Against THCA Flower Sales Amid Federal Hemp Ban

In a significant move to curtail competition from unregulated hemp products, a group of cannabis companies in Kansas City, Missouri, has filed a lawsuit against local merchants selling THCA flower. This lawsuit comes in the wake of a federal spending bill signed by former President Donald Trump, which will prohibit hemp THC products from 2026. The legal action, initiated on November 13, seeks damages and a permanent injunction against these businesses, highlighting the growing tension between regulated cannabis operators and the hemp industry

The lawsuit underscores the frustration of licensed cannabis dispensaries that comply with Missouri's stringent regulations, including paying taxes and licensing fees, while competing against unlicensed vendors. Chris McHugh, the attorney representing the plaintiffs, emphasized the disparity, stating that unlicensed operators are profiting significantly by exploiting a loophole in the 2018 Farm Bill. This loophole has allowed these merchants to sell products that are essentially marijuana under the guise of hemp-derived THCA flower, bypassing state regulations

The federal spending bill aims to redefine hemp to include only products with a THC concentration of no more than 0.3 percent, effectively closing the THCA loophole. This change could drastically impact the $28.3 billion national hemp industry, which has thrived on selling products outside of traditional regulatory frameworks. However, the enforcement of these new rules remains uncertain, as it is unclear how federal and state agencies will coordinate to implement the ban

Missouri's legal cannabis market is notable for its success, having reached $1.5 billion in sales in 2024, outpacing even New York despite its larger population. The lawsuit aligns with a report by MoCannTrade, a marijuana industry trade association, which claims that a vast majority of hemp THC products in Missouri are illegally marketed as marijuana. This legal action is part of a broader strategy to protect the interests of licensed cannabis businesses and maintain the integrity of the regulated market

Looking forward, the outcome of this lawsuit could set a precedent for similar actions across other states, as licensed cannabis operators seek to defend their market share against hemp-derived products. As more lawsuits are anticipated, the cannabis industry is closely watching how the federal government's redefinition of hemp will play out at the state level. The case highlights the ongoing challenges within the cannabis industry as it navigates a complex landscape of state and federal regulations