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Iowa-based beverage companies sue the state over new THC limits

Two Iowa companies are suing the state over its interpretation of a new law that restricts THC levels in adult beverages.



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Climbing Kites, a Polk County beverage manufacturer, and Field Day Brewing Co., the Johnson County producer of the Day Dreamer line of cannabis sparkling water, are suing the Iowa Department of Health and Human Services in U.S. District Court.

The lawsuit has its roots in the state Legislature’s passage of the Iowa Hemp Act of 2019. That law, along with the 2018 farm bill passed by Congress, excluded hemp from state and federal definitions of “marijuana,” effectively legalizing hemp production across the nation and in Iowa.

The state law not only cleared the way for the production of hemp within Iowa, but also contemplated the production and sale of hemp-based consumables within the state.

In 2020, a second hemp bill was approved by state lawmakers, establishing a consumable hemp program and approving the production of consumables with a maximum THC concentration of 0.3% or less, the same threshold established in federal law.

In 2023, two separate groups of investors launched Climbing Kites in Des Moines and Field Day in North Liberty, and the two companies soon began producing canned beverages that contained carbonated water, citric acid, natural flavors, and hemp-derived cannabis oil.

The law limiting the level of THC, which is the primary psychoactive element of cannabis, in such products wasn’t an issue for either company, whose products contained THC in the range of 0.001% to 0.003% — far less than the legal maximum of 0.3%.

In 2024, state lawmakers began considering legislation to further restrict the potency of hemp consumables. Despite opposition from the Consumable Hemp Advocates, the Epilepsy Foundation of Iowa and others, House File 2605 ultimately passed both chambers and was signed into law by the governor on May 17.

The new law stipulates that the THC, or tetrahydrocannabinol, concentration in a consumable must be less than, or equal to, three-tenths of 1 percent on a dry-weight basis, or equal to or less than 4 milligrams per serving.

With the new law scheduled to take effect on July 1, DHHS recently issued written guidance for current manufacturers and retail sellers to follow. According to that guidance, DHHS intends to implement potency limits by altering the definition of a “serving” to one 12-ounce can – which, when combined with the new statute’s limitations, means a can of Climbing Kites or Day Dreamer cannot include more than 4 milligrams of THC.

According to the lawsuit, that limit conflicts with the statute that says a consumable may contain up to 10 milligrams of THC per container.

The result, the two companies claim, is that “the department will criminalize all (of their) beverage containers smaller than 12 fluid ounces” once the new law takes effect on July 1. They argue that approximately 80% of their current inventory will become illegal because of DHHS’ interpretation of the potency limits.

“Products that account for approximately 85% of plaintiffs’ revenue will become illegal because of the department’s interpretation,” the lawsuit claims.

The lawsuit alleges the state is violating the Supremacy Clause of the U.S. Constitution, noting that the federal Food and Drug Administration has the power to oversee food safety.

The companies are seeking an immediate injunction preventing DHHS from enforcing the new limits, as well as an order declaring that a state-imposed potency limit of 4 milligrams per serving violates the Constitution, and that DHHS has no authority to interpret the provisions of House File 2605 in any manner beyond the plain language of the statute.

The state, which says it does not comment on pending litigation, has yet to file a response.

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