Virginia Hemp Businesses Sue to Block New THC Cap in Federal Court

Seven Virginia hemp businesses have asked a federal judge to block the state’s new 2-milligram THC cap on consumable hemp products before it takes effect August 15, 2026, filing a lawsuit on July 31, 2026, in the U.S. District Court for the Western District of Virginia.

The suit challenges a provision lawmakers inserted into the state budget — signed June 28, 2026, and effective July 1, 2026 — that eliminates a carve-out allowing consumable hemp products to exceed 2 milligrams of THC per package so long as they contain at least 25 times as much CBD. Without that exception, hemp products sold in Virginia must stay under both the 2-milligram per-package cap and the state’s 0.3% total THC concentration limit.

The plaintiffs — Northern Virginia Hemp & Agriculture, Redfern Hemp Co., District Hemp Botanicals, Pure Elkton Manufacturing, Cypress Hemp II, Wellness Warriors and Simply Hemp — argue the change amounts to an unconstitutional taking of private property without compensation and violates due process and equal protection. They are seeking temporary and permanent injunctions, damages and attorney fees. Named defendants include Gov. Abigail Spanberger, Attorney General Jay Jones, the state’s agriculture commissioner, the Virginia Cannabis Control Authority and commonwealth’s attorneys in the counties where the businesses operate.

“It will bankrupt my business,” Barbara Biddle, founder and CEO of Manassas-based District Hemp Botanicals, said in an email. “I took out loans and signed multi-year leases under this regulatory structure and won’t be able to meet my financial obligations once this goes into effect.”

A Spanberger spokesman defended the change, saying untested, highly intoxicating products have flooded Virginia through a loophole in state law with inadequate protections for children and teenagers. Jones said in a text message that his office stands ready to defend the law, which he said creates clear standards and enforcement mechanisms against the illicit market.

What the Businesses Told the Court They Stand to Lose

The complaint lays out company-by-company damage figures as of mid-to-late July 2026:

• Cypress Hemp II of Powhatan reported $1.83 million in inventory, of which about $1.44 million — 78.6% of its Virginia business assets — becomes illegal August 15, 2026; the affected products account for roughly 95% of its current revenue, and its wholesale line supplies 370 Virginia businesses.
• Northern Virginia Hemp & Agriculture of Middletown documented $735,501.85 in inventory as of July 13, 2026, and said about 85% of the products it made and sold before the budget now qualify as banned. The company said a planned statewide beverage distribution deal with Total Wine collapsed after the budget passed, and it pegged its going-concern value above $3.5 million.
• Pure Elkton Manufacturing, which operates as Pure Shenandoah, reported more than $300,000 in inventory as of June 2026, about $250,000 of it soon to be non-compliant, plus more than $600,000 owed to creditors.
• Redfern Hemp Co. and its Redfern Market retail arm in Caroline County reported $350,000 and $150,000 in inventory, with $200,000 and $70,000, respectively, becoming non-compliant; the companies estimated total losses of $110,000 to $150,000.
• Wellness Warriors, operating as Kultivate Wellness in Chesterfield County, held 117,587 products worth $123,799.25 as of July 23, 2026 — and said nearly 98% of them will become non-compliant.
• Simply Hemp of Collinsville reported $12,000 in inventory as of July 30, 2026, 95% of it non-compliant, and projected losing roughly $225,000 in revenue in 2026.
• District Hemp Botanicals reported about $10,009 in affected inventory against $181,344.46 owed to creditors; the company said it has already terminated its staff and expects to exit its Leesburg store lease at a cost of about $50,000.

The businesses received formal notice of the change on July 6, 2026, in an email from the Virginia Department of Agriculture and Consumer Services titled “Important Updates from VDACS Hemp Enforcement,” according to the complaint — leaving about 40 days to reformulate products, redo packaging, rework manufacturing contracts and dispose of inventory.

How the Cap Landed in the State Budget

Virginia built its current hemp framework in 2023 through legislation that set the 2-milligram per-package THC limit but added the 25-to-1 CBD-to-THC exception, alongside child-resistant packaging, independent lab testing, warning labels and a minimum purchase age of 21. The complaint describes how that framework unraveled in 2026: after the General Assembly failed to agree on a standalone bill to create a recreational marijuana market — the governor’s amendments to that bill were set aside in the Senate without a vote — legalization language moved into the biennial budget, the session’s last remaining vehicle.

The budget conference report was released June 19, 2026, adopted by both chambers three days later and signed June 28, 2026, two days before the fiscal year ended. Alongside creating a licensed adult-use market, it redefined hemp products and deleted the 25-to-1 exception. The plaintiffs argue the result is an arbitrary line between identical compounds based on retail channel: a 3-milligram THC beverage banned from a hemp shop’s shelf will be legal in a state-licensed marijuana dispensary once that market opens. They also note the law regulates total THC per package rather than concentration, so a concentrated 1-ounce dropper bottle at 1.9 milligrams stays legal while a diluted 12-ounce beverage at 2.1 milligrams does not.

Under the budget, recreational marijuana sales are scheduled to begin July 1, 2027, with the Cannabis Control Authority overseeing the market and regulating hemp products under the new system.

This Is the Second Federal Fight for One Plaintiff — Under a Different Theory

The complaint explicitly distances the new case from Northern Virginia Hemp and Agriculture, LLC v. Commonwealth, in which the Fourth Circuit ruled January 7, 2025, that the 2018 federal Farm Bill did not preempt Virginia’s authority to impose total THC concentration limits. That holding addressed only statutory preemption, the filing says — not the takings, due-process and equal-protection claims raised now. NOVA Hemp is the only plaintiff returning from that earlier litigation, and this time it leans on a February 25, 2026, order from the federal court in the U.S. Virgin Islands, where a judge temporarily blocked a hemp ban that forced licensed retailers to surrender or destroy existing inventory without compensation.

The stakes extend beyond state lines. A federal funding measure signed in 2025 redefines hemp and, beginning November 12, 2026, caps finished hemp-derived cannabinoid products at 0.4 milligrams of total THC per container — a fifth of Virginia’s new limit. MyCannabis has tracked the squeeze from both directions, from Virginia’s budget-driven path to legal sales to the attorney general’s stepped-up enforcement on hemp THC products ahead of the August 15, 2026, date.

The businesses are asking the court to preserve the 25-to-1 exception while the case proceeds. Biddle said an injunction would buy time for lawmakers to either compensate the industry or restore the ratio — “I’m leaning towards the latter,” she said. Travis Lane, operations manager at NOVA Hemp, put the narrower request plainly: “We seriously would prefer an official transition period.”