Maryland Hemp Operators Take Legal Action Against Restrictive Cannabis Laws in Federal Court

Eleven Hemp Businesses File Lawsuit to Challenge 2023 Law Requiring Marijuana Licenses for THC Sales

A group of 11 hemp operators in Maryland has filed a federal lawsuit challenging a 2023 state law that requires hemp businesses to obtain marijuana licenses in order to legally sell THC-containing products. The operators argue that the law unfairly targets hemp entrepreneurs and imposes regulations that violate constitutional principles and economic fairness.

The lawsuit, filed on Monday, urges a federal judge to provide immediate relief by either compelling the state to treat hemp operators as legally licensed cannabis businesses or to block the enforcement of the law altogether. This legal challenge is the latest chapter in a broader regulatory and political battle over how hemp and marijuana coexist under Maryland’s evolving cannabis framework.

Legal Challenge Targets State Enforcement and Seeks Equal Treatment Under Cannabis Regulation

The primary objective of the lawsuit is twofold: to protect the hemp businesses from legal penalties under current state enforcement and to obtain legal standing equivalent to licensed marijuana operators under the Maryland Cannabis Administration.

The plaintiffs argue that the 2023 legislation unfairly bars them from participating in the regulated market unless they secure a formal license—something that is virtually impossible for most of them due to state-imposed limits on license distribution. As a result, they are not only excluded from the regulated market but are also at risk of state penalties for continuing to sell products they have been offering for years.

Lawsuit Also Challenges Constitutionality of Social Equity Program and Business Licensing Caps

In addition to contesting the licensing requirement, the plaintiffs are also calling on the court to declare Maryland’s marijuana social equity program and license caps unconstitutional. According to court filings, the current system favors a small group of applicants while barring the vast majority of hemp entrepreneurs from participation.

Maryland has adopted a limited-license model, which means that the number of available permits for cannabis businesses is restricted. While this model is designed to control market entry and encourage oversight, critics argue that it creates a monopoly-like environment that stifles competition and innovation.

The plaintiffs allege that these license limits serve to artificially inflate prices for consumers and maximize state tax revenue at the expense of small businesses and free-market fairness.

Advocates Claim Regulations Have Created an Unjust Cannabis Monopoly

The lawsuit contends that by enforcing these strict regulations and market entry barriers, Maryland has created what the plaintiffs describe as a government-controlled monopoly. The legal filing points out that the current structure suppresses competition, keeps prices high, and significantly limits product availability for consumers.

According to the legal team representing the hemp businesses, the state’s cannabis regulatory system is no longer just about public health or safety—it has become an economic control mechanism. This approach, they argue, infringes on both economic liberty and equal protection under the law.

Hemp Remains in Legal Limbo as Operators Await State Appeals Court Ruling

Maryland’s hemp industry is facing a period of legal uncertainty, as operators wait for clarification on several overlapping legal and regulatory matters. A separate legal case, brought by the Maryland Hemp Coalition, is currently awaiting judgment from the state appeals court.

Until that decision is handed down, both state regulators and industry operators remain in a state of limbo, uncertain about how to move forward with business planning, compliance, and product development. The overlapping lawsuits underscore the lack of cohesion between federal hemp legalization and state-level cannabis regulation—a tension playing out in multiple jurisdictions across the United States.

New Law Imposes Strict THC Limits on Beverages and Restricts Production to Marijuana License Holders

Adding to the regulatory burden, Maryland’s legislature recently passed new rules that limit the amount of THC permitted in beverages to no more than 5 milligrams per serving. Furthermore, only state-licensed marijuana businesses are permitted to produce these drinks.

This move effectively bans the sale of popular hemp-derived THC beverages—widely available in liquor stores and mainstream retail outlets in other states—within Maryland’s borders. These restrictions are a key target of the new lawsuit, which calls on the court to dismantle what the plaintiffs see as a deliberate attempt to exclude hemp operators from high-growth product segments.

The plaintiffs argue that these product bans amount to a de facto prohibition on an entire category of federally legal goods, carried out under the guise of public safety but ultimately designed to protect a small group of cannabis businesses.

Case Could Have Far-Reaching Implications for the Hemp and Cannabis Industry in Maryland and Beyond

This lawsuit has the potential to reshape Maryland’s cannabis regulatory landscape and could set legal precedent for how hemp and marijuana are treated under state law. If successful, it may open the door for hundreds of hemp-based businesses to participate more fully in the state’s growing cannabis economy.

It could also force policymakers to revisit the balance between social equity goals, economic fairness, and consumer access three competing priorities that have been at the heart of cannabis legalization efforts nationwide.

As the case moves forward in federal court, it is expected to draw attention not only from cannabis industry stakeholders, but also from constitutional scholars, free market advocates, and other state regulators watching how Maryland handles the increasingly complex overlap of hemp and marijuana laws.

Maryland’s Cannabis Industry Faces a Legal Crossroads

The lawsuit brought by 11 hemp operators signals a growing frustration with what many see as unjust cannabis regulations in Maryland. At the heart of the legal challenge lies a demand for equal treatment, fair access, and transparent policymaking—principles that resonate deeply in a state and nation grappling with the legacy and future of cannabis legalization.

Whether the courts ultimately side with the plaintiffs or uphold the state’s current framework, one thing is clear: Maryland’s cannabis laws are under intense scrutiny, and the outcome of this legal battle could influence regulatory trends across the country.