On August 7, 2026, a federal judge in Ohio blocked the state from enforcing its newly tightened hemp/THC standard against a group of hemp product manufacturers, ruling that the law’s practical operation discriminates against out-of-state companies in violation of the dormant commerce clause of the U.S. Constitution. The plaintiffs, hemp manufacturers represented by Mac Murray & Shuster’s Chris Wager and Chad Blackham, together with Carol A. Thompson and Andrew D. McCartney of Ashbrook Byrne Kresge Flowers LLC, filed suit against the State of Ohio, the heads of its Division of Cannabis Control, the Ohio Investigative Unit, and the Ohio Highway Patrol, along with nearly 100 county and municipal prosecutors.
This is the second time in less than a month that a federal court has paused enforcement of the same law on similar grounds, and it highlights a tension that has been building since Congress legalized hemp nationally in 2018: what happens when a state’s own THC threshold diverges from, and effectively overrides, the federal one.
What Changed in Ohio
Ohio’s Senate Bill 56, which became effective this past March, redefined “hemp” under state law. Previously, whether a cannabinoid product was legal hemp or regulated marijuana turned on its concentration of delta-9 THC. Under SB 56, any product exceeding 0.3% total THC (a measure that captures a broader range of THC compounds, not just delta-9) is instead classified as marijuana. Because Ohio’s cannabis program requires marijuana to be cultivated, manufactured, and sold by licensed, in-state operators, products that cross that line are effectively barred from the state unless sold through the state’s dispensary system — a system the plaintiffs in this case cannot access.
A Recurring Federal-State Fault Line
This dispute sits at the intersection of two regulatory systems that haven’t fully reconciled. The 2018 Farm Bill legalized hemp federally, defining it as cannabis containing no more than 0.3% delta-9 THC on a dry-weight basis. Notably, this federal definition notably said nothing about other cannabinoids like delta-8 or THCA. Manufacturers built entire product categories, including hemp-derived beverages, around that gap, and Congress left states free to regulate hemp production and sale more strictly than federal law requires. Not surprisingly, states have taken that invitation in very different directions: some have banned intoxicating hemp products outright, others have built licensing and age-verification frameworks around them, and a few have left the market largely open.
That divergence has already generated a fair amount of litigation, and companies have not fared especially well arguing that state hemp restrictions are unconstitutional simply because they’re stricter than federal law. Courts in California, Virginia, and Arkansas, among others, have upheld state bans or restrictions that applied evenhandedly to in-state and out-of-state products alike. What makes Ohio’s law different, and what appears to have driven the outcome here, is that SB 56 doesn’t just restrict a category of products across the board.
Instead, it channels anything over the new THC threshold into a licensing system that, by its terms, only in-state cannabis operators can enter. That’s the feature of the law that put it in dormant commerce clause territory rather than the more forgiving territory occupied by evenhanded bans, and it’s the kind of federal-state regulatory friction that recurs across many heavily regulated industries, not just cannabis.
The Dormant Commerce Clause, Briefly
The Commerce Clause gives Congress the power to regulate interstate commerce; courts have long read an implicit converse into it, often called the “dormant” commerce clause, that limits states’ ability to discriminate against or unduly burden that same commerce even where Congress hasn’t legislated directly. A state law that favors in-state economic interests over out-of-state competitors is treated with real skepticism and is typically invalidated unless the state can show it has no reasonable, nondiscriminatory way to achieve its goal. Laws that are neutral on their face but still burden interstate trade get a more forgiving balancing test, weighing the burden against the state’s local interest. It’s a doctrine that shows up well outside the cannabis space, and it’s a recurring consideration wherever state licensing or physical-presence requirements can end up drawing a line at the state border.
The Ruling and What’s Pending
U.S. District Judge Jeffrey J. Helmick found that SB 56’s licensing structure impermissibly discriminates against the plaintiffs in what is otherwise a federally legal market, and blocked the state from enforcing the law against the plaintiffs while the case proceeds. In the same order, he declined to stay the case while the Sixth Circuit reviews a temporary restraining order he issued in a separate, related suit brought by ten other hemp companies in July, rejecting Ohio’s argument that the plaintiffs wouldn’t be harmed by further delay. Both the Sixth Circuit appeal and further proceedings in this case are ongoing, and the August 7 ruling, like the July order that preceded it, is preliminary rather than a final judgment on the merits.
Why This Matters Beyond Hemp
The tension at the center of this case isn’t unique to cannabinoids. Any time federal law sets a baseline and leaves room for states to regulate further — as it does in telemarketing, insurance, financial services, consumer privacy, energy, and healthcare, among others — states fill that space unevenly, and sometimes protectively. A licensing rule or product definition that reads as ordinary consumer protection can, in practice, function as a wall that only in-state or already-licensed businesses can get through.
Courts have reached this conclusion before, in contexts that have nothing to do with cannabis. Similar arguments have surfaced in disputes over interstate trucking and waste-hauling permits, out-of-state financial institutions’ access to state-chartered programs, and professional and telehealth licensure requirements that favor providers with fully in-state footprints. In each of these, the constitutional question is the same one Judge Helmick confronted here: does a facially neutral rule, once applied, functionally close the state’s market to out-of-state competitors in a field where federal law otherwise allows them to compete?
For compliance teams outside the hemp industry, the takeaway isn’t about cannabis at all: it’s about recognizing the pattern early. Whenever a state agency narrows who can qualify for a license, exemption, or safe harbor that federal law otherwise makes available, that’s worth a second look. Working with legal counsel that has experience assessing the federal regulatory baseline against the specific way a given state has chosen to build on top of it can help businesses spot that kind of conflict before it becomes a costly compliance gap or a courtroom battle.
