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I'll call this committee meeting to order. Chair sees a quorum. Members, this meeting was called due to the recent ruling from the Eighth Circuit Court of Appeals regarding the lawsuit against the state of Arkansas with regard to a bill that was passed two years ago. And I've asked Alex Benton from the AG's office and Christy Bjornsson from ABC to come and be able to
inform us as to what the status of this law is now what the public and the members can expect going forward and we'll let them go ahead and give our presentation and then we'll open it up for questions if you'll identify yourself for the record uh you'll be recognized and if alex if you'll go ahead and and start this off thank
Speaker 2
0:58
you mr chair uh alex benton attorney general's office
Speaker 3
1:04
i'm christy b ornson regulatory administrator and i brought with me today um director
Speaker 2
1:13
of enforcement director potter david park thank you mr chair so as you laid out to begin act 629
Representative Johnny Rye
Unverified
1:20
of 2023 amended Arkansas law and it banned hemp derived psychoactive substances. What we know is Delta 8, Delta 9, and some other Delta products. There's Delta 10, Delta O. The law also in the
2023 law had a backup that said if for any reason the ban is blocked by the court, then this backup regulation will spring into effect. This law was championed by the AG, by the governor, Representative Gasway, Senator Dees. They've been tireless champions on this issue and got the law passed by super majorities in both chambers. Several businesses in the industry filed for an injunction shortly
thereafter to stop the state's ban of these of these products. They alleged in their lawsuit that Act 629 violated the Supremacy Clause, the Due Process Clause, Takings Clause, and the Commerce Clause of the United States Constitution. The district court granted that injunction and enjoined enforcement of the entirety of the act, both the ban and then also the backup regulation. We appealed that to the Eighth Circuit and then on Tuesday, June 24th, two weeks from yesterday, the
court unanimously ruled in the state's favor on every single issue and dissolved the preliminary injunction. So this case, as you guys all know, has been going on for a long time, about two years. It's still not totally over, but there's certainly light at the end of the tunnel. We fielded a number of questions about this case, discussed this case with many of you on many occasions. That's our job. We're happy to do it. I must say, however, that some folks with an interest in the case they did their best to spread a misinformation about it
especially the likelihood of their success and the state's failure we have been confident in the case from the beginning you as the legislature the governor our office we have and continue to be on solid ground on this issue I want to know also that we're not here to give you our side where we're here our job. The AG's office is, it's our job to give you an accurate picture of what the law is, not what we wish it to be. So what does the opinion say? What are its implications? The 8th Circuit found
that the Farm Bill does not preempt our law. It also found that our law is not vague. Those were the two huge wins in this opinion for the state. Because the court found our favor on those two material issues, those are directly at issue on the likelihood of their success on the merits of the case. Additionally, the Eighth Circuit dismissed the governor and the AG from the case. Both the governor and AG are entitled to sovereign immunity because they were not
material to the enforcement of this law. When the Eighth Circuit finally does issue its mandate, So there's two things that happened. The Eighth Circuit issued their order, but the order does not become effective. Therefore, the ban does not spring back into effect until that mandate issues. There is no set time frame for when that mandate will come down. I will say that as of yesterday, the procedural time frame for the plaintiffs to file a motion
for reconsideration in front of the Eighth Circuit was closed. So there won't be any procedural that we can foresee right now. there shouldn't be any other procedural hurdles for the ban springing back into effect as soon as the mandate issues. I want to read directly from page 12 of the opinion, and I'm happy to provide a copy of the opinion to anybody who would like one. But it says pretty simply about the theory of the case, especially on preemption, that says, just because states may legalize hemp
under the 2018 Farm Bill does not mean that they must, and I think that pretty accurately encapsulates the Eighth Circuit ruling here. Like I said, there were portions in here on whether it was preempted by the Farm Bill, it is not, whether or not it was vague, it was not. I mentioned sovereign immunity. By the way, I'd be remiss if I didn't say that the attorney who lost this case as the same attorney who was illegally hired by the board of corrections and
attempted to waive sovereign immunity in their contracts as well but since 2023 we have been vocal about the harms of these delta products I know this committee has also seen the harm that these delta products pose especially for our children so I'm really proud of the work of the attorneys on our team that argued this case both at the trial level and in front of the Eighth Circuit. And once the mandate issues and the ban springs
back into effect, if you're selling these products after the mandate issues, you're doing it in violation of the law. That's all I have subject to
your questions. Does any members have any questions for Alex before we hear from ABC? Representative
Rye you're recognized for a question thank
Representative Johnny Rye
Unverified
6:57
you mr. chair just a question for you you know in the last mapping that I've seen as far as cancer is concerned in the eastern side of
Arkansas where our agriculture is it seems like that we have a worse of a cancer situation there and I just wonder would that have anything to do with with this No, sir.
I guess if you're asking about whether these Delta products would have any sort of palliative care for cancer patients, we have a legal system and framework in Arkansas for medical marijuana in our Constitution that would be able to serve those patients in a legal manner under our framework, under our laws.
Representative Clana, you're recognized for a question.
Representative Nicole Clowney
Unverified
7:49
Thank you, Mr. Chair. Ms. Benton, can you just walk me through procedurally? I know you said there was no motion to reconsider. Is there a chance of an appeal to the Supreme Court still? What are we looking at kind of in terms of certainty
Representative Johnny Rye
Unverified
8:05
once the mandate comes down from the Eighth Circuit? Yes, so I'll repeat something I think I said back in March three months ago. I think that any attorney who looks into their crystal ball and tells you what a court is going to do is guessing at best.
But to give you kind of an overview, certainly they could seek cert with the United States Supreme Court because there are circuit splits on this issue. But unless there is a stay on this appeal, once the mandate issues, the ban would go back into effect. I can't anticipate, it could go both ways. I mean, there could be a procedural route where a court attempts, or the plaintiffs attempt to appeal this ruling. But this is also an interlocutory appeal.
This is not a final order from the Eighth Circuit. So it is being remanded back down to district court for further proceedings that are consistent with this. And so after there's a final order that's issued in the district court, then they could appeal to the Eighth Circuit. Then they could seek cert. But on an interlocutory appeal like this, I don't foresee that coming maybe for another year, two years.
Maybe we'll see. all right member seeing no other questions i'm going to ask abc to give uh give us some
information about how they plan on enforcing this of course
Speaker 3
9:28
um thank you for having us i know this is a hot topic our phones have been ringing off the hook for the last two weeks um big thank you to our partners at the ag's office for one representing us in the case and two um helping us kind of in the aftermath make sure everyone's notified so right now like um miss benton said we are waiting on the mandate to go full force in effect of enforcement. So right now what
Speaker 21
9:52
we've been doing is courtesy visits and I think Director Potter may have an exact number of how many we've
Representative Dwight Tosh
Unverified
9:58
completed. Yes, thank you committee. We started just after the ruling came down notifying our permit holders about the ruling. As of this morning we've gone just over 1,500 permits that our agents have visited performing courtesy visits just advising them of the ruling and that these products are going to become illegal very soon, directing them to remove them from their stock immediately. And we found that
Speaker 3
10:24
was pretty successful to have an in-person touch with having our local agents that some of these retailers know and work with already, having
our agents go in with a letter that we produced that has the exact legal definitions of what will become a controlled substance. So we cannot be a lawyer for every single retailer in the state of Arkansas we represent the state of Arkansas but we can direct them exactly to the rules that they need to follow and that's what we've done so we handed them a letter we've also posted it on our websites if you've attempted to go to the MMC website for marijuana information the ABC website for alcohol information or the tobacco website in the last two weeks you've gotten a big pop-up box
that says please be notified of this eighth circuit decision and then once we had a letter typed up that directed them to the legal definitions of controlled substances we added that link up there so anyone whether a permit holder or not has access to that on our website and then with the agents being able to go in obviously we're waiting on the mandate to enforce but as they're going in they're starting to get a feel of who is able to comply whose store is completely full of products that are going to be banned most if not all of the products that some
of these people sell may be banned so we are giving them as much fair warning as we can without knowing you know looking in a crystal ball of when the mandate is going to come down from the court we have no idea but we're trying to do our best to let people know hey this at any given moment which is what we've been telling them for about two years now at any given moment this could become a controlled substance and it is your responsibility to look at the law look at your products and make sure you're following the law with these products being unregulated for the last two years some of them are incredibly intoxicating some of them have interesting combinations of
multiple of the substances listed as controlled substances so when people are calling us saying can I sell xyz product we're telling them we don't have the ingredients to your product these have been unregulated for two years so you need to look at the legal definition and if it has any of the substances it needs to be removed so right now heavy on education rather than enforcement but ready to go as soon as the mandate comes down with seizures criminal action and administrative violations
Representative Dwight Tosh
Unverified
12:39
we are seeing that they are being compliant and proactively removing these items
from the shelves in most cases that the agents show up they've already been removed and so the permit holders saying we knew you were coming you're about the hemp you're here about the products we've already removed them we're taking them off so we are
Speaker 3
12:58
seeing large-scale compliance right now which too will bode well for the future if and when the case is decided on its merits and a new regulatory framework is triggered hopefully with this ban being back into effect before then people will get themselves into compliance well in advance of the new framework that's our
hope represent McKenzie you recognize for
Representative Brit McKenzie
Unverified
13:19
a question thank you chairman formerly director I guess regulatory administrator Bjorn said I appreciate everything you've said we've talked about the subject before but and kind of relative to what Alex mentioned previous hopes not a strategy so I really and I get we have to wait on a mandate but I'd hate for a mandate to come on a Friday and your mr. Potter enforcement agents go in on a Monday and we start handing
out large fines and penalties so can you help me understand what type of a glide path, what type of an amnesty zone is going to exist for those who have been selling this product legally because of the injunction on our law that's going to exist for these folks to be able to rightfully and dutifully get these products out of circulation once a mandate comes in. I understand that we hope that these courtesy meetings and interactions do prove out. We'd love a high percentage of a take rate there, but what's going to happen to those
that again who are who are currently operating within the law or have been for at least the last two years going to be able to get that supply out of their stores and in compliance with our
Speaker 3
14:29
laws well that is why we're going out and doing the courtesy visits now is to go ahead and tell them look we don't want to catch you off guard when the mandate comes out we want you to know that these products need to be removed and one part that hasn't really been discussed here today too is yes regulatory enforcement has jurisdiction across the state they are law enforcement officers
but every individual counties sheriff's office and elected prosecutors local law enforcement agencies will all have the ability to enforce what will now become controlled substance law so at any time someone is caught with a controlled substance any officer can get them so as far as an amnesty period after the mandate I don't know that truthfully that would exist that's occurring right now. And so we have sent also an email out to every single permit holder in the state of Arkansas. So that's 10,000 plus individuals if you're looking at alcohol, tobacco, and marijuana.
Now the people who don't have permits from us, a lot of them have called and spoken with our either marijuana attorney or tobacco attorney and have been directed towards the letter. But as much as we can, we're in kind of that what happens to be an amnesty period now to tell them get it out now. We are advising
Representative Dwight Tosh
Unverified
15:42
them of that as well if they're subject to criminal penalties and there's not much of a discretion period once the order is filed and so it immediately becomes a control substance at that point and they're subject to arrest and seizure. So we're trying to communicate that as
Speaker 2
15:56
clearly as possible to them. And if I may I want to follow up I
Representative Johnny Rye
Unverified
16:05
think there is often a misconception about what an injunction means. The selling those products, the the law, the ban, well while it was held and there was a preliminary injunction that said that they could not enforce the law, it was still the law of Arkansas that these products were supposed to be banned. It's
just that enforcement was enjoined temporarily and it's similar to let's say it you know you pass a law and you have a delayed effective date of that law um i think we've seen this in some you know social media laws it's still the law it just doesn't become effective until something happens so these folks have known that these products were banned since 2023 they successfully obtained an injunction which held in abeyance enforcement but it was certainly not
lawful in Arkansas we just couldn't do anything about it to enforce the law. One follow-up?
Representative Brit McKenzie
Unverified
17:11
Well what can you help describe to me what work has been done to communicate the same level of rigor to wholesalers, distributors, suppliers of this product inside the state or
Speaker 3
17:21
out? They are permitted with us. Tobacco is permitted in a three-tier system so manufacturers wholesalers and retailers same as alcohol are permitted with us so I know I've had some of the wholesaler beer guys had called me months and months ago and we're like hey
what what's going on with the hemp should should we order that should we stock this and I said I can't give you business advice but I can tell you that at any given moment once this case is decided that could become a controlled substance so if you want to have that liability of possessing that item in your store at that time that's on you but all the wholesalers have received the notification letters contacts that we have in our system as well so if they're permitted with us they should know about it by now we have done heavy heavy notification represent painter you recognize for a question
Representative Stetson Painter
Unverified
18:11
thank you mr. chair and uh appreciate you because
that was one of the recipients of the site visit
that you guys had um just you know you said you guys have reached out to 1500 in-person visits what's what's the goal uh how many more site visits do you plan uh to um especially maybe out in the rural areas that always have the greatest internet or may not even check their boxes too and second of all is i can tell you that yes i can tell you guys have talked to some of the wholesaler distributors because they've gone around at least to my store and said hey these products are no longer we're not going to have these anymore so
I do appreciate you do communicating but I would like to know just what the overall goal is is to get how many visits do you
Representative Dwight Tosh
Unverified
18:56
plan to have yes sir thank you representative painter yes we plan on continuing this until we get an order we've got roughly 5,000 which is the renewals 5,000 permits and so we plan on keeping going until we get to all of those or the order comes down in identifying what to do next at that point yes and just stopping follow up and
Representative Stetson Painter
Unverified
19:16
you just want to make sure for the record it's your agents that are ones that are going out there
and and checking in doing those site visits because i got that nice little
Representative Dwight Tosh
Unverified
19:28
letter and then they're ones handing those correct yes sir we are hand delivering those as well and as director bordenson said those were emailed to the permit holders too so we're hoping to get everybody and we're working very quickly as you can tell to before this order actually comes down giving everybody a chance to get compliant asap
Speaker 3
19:45
thank you thank you mr chair and i'll follow up too we Like I mentioned, we've seen these products in all types of different forms. Some are liquid drinks that some of the beverage distributors have been interested in.
Others are gummy, smokable, vape-type products. Majority of them are found in tobacco outlets, but that doesn't mean that there aren't any in alcohol outlets either. So we are prioritizing a little bit. That's where that 5,000 number comes from. That's our tobacco permit number. So we are prioritizing tobacco over alcohol. We believe and have been told that it is a lot easier
Speaker 51
20:17
for the alcohol permittees to comply because they just have less of the products.
Chair
Unverified
20:28
Representative Tosh, you're recognized for a
Representative Dwight Tosh
Unverified
20:31
question. Thank you, Mr. Chair. Just a quick question for you. I know I've worked with ABC a lot over the years. You do a great job. You always have. And I know we've given you a lot of responsibility to enforce a lot of laws. I just want to make sure, I know this could be overwhelming to your enforcement part of the ABC. Do you have the manpower to be able to meet the challenges that you're going to be faced with this?
I'm just, I know we've spread you thin, but is the manpower there? and are you going to be able to allocate that manpower appropriately to be able to address these issues? Thank
you for the question, Representative Tosh. I would answer that and say we are at 100% work capacity with a lot of what we do, and so we are pushing off additional assignments to get these done. I would, as agency director, I'd never tell you that. I wouldn't welcome additional resources, but that will be a conversation I have with our cabinet secretary and everything else.
But we're getting the job done right now. We have had some additional mandates through the 25 session that came on us. So we're diligently working at those. Okay,
thank you for that answer. Alex, I have a question. We passed another bill this past session.
How would that possibly impact this law?
Representative Johnny Rye
Unverified
21:56
Yes, sir. Thank you. So as a refresher, because I know we've all slept since Siney died,
And so the 2025 law only amended this law that we're talking about today, this ban with a backup regulation. And that amendment will only become effective upon the trigger language being met. And there are four different instances in which that can be met. And then the AG may certify once he sees that those conditions have been met. This win on the appeal does not satisfy one of those criteria because it's not a final adjudication, but we are much closer to that.
And we would have to win on the merits in this case in a final order, and this is merely an interlocutory appeal that we received the order on. So still have some work to do. Obviously, I know that there's been a lot of changes with the Farm Bill and with some of the House of Propes with some different definitions of hemp. that may satisfy some of the trigger language as well. We won't know until USDA promulgates rules with the definitions of hemp and hemp-derived psychoactive substances whether or not that would be sufficient
to meet the trigger language in the 2025 law. So not there yet, but
Speaker 56
23:14
we will certainly keep everybody apprised once we get to that point. all right
seeing no other questions one more
I'm sorry in representing McKenzie you recognize for a
Representative Brit McKenzie
Unverified
23:49
question thank you mr. chair just as a question based on nuance because in the 2025 bill that we talked about and the four triggers that push it push it over and supersede the 2023 law THCA which is again that's what happens when we start to to to pass laws and legislate against what we understand to be common commonly derived definitions and then they change over time THCA in the 2025 bill would be considered illegal illicit but based on 2023 there wasn't there was no clear
enumeration to that strain or varietal of cannabinoid derived product. I do understand the 2023 law that there was a definition of any substance there within which is big and broad basically it's the entire flower. So could you tell me we get a mandate tomorrow based on the opinion of you and I don't want to ask you a specific if you can't give me one but based on the opinion that the 2023 law that would be in effect um would thca be also banned
Speaker 2
24:51
thank you representative i think we anticipate
Representative Johnny Rye
Unverified
24:59
litigation on on this question specifically i have heard uh a lot of questions about that and that the same trial lawyer is going to probably try to seek to carve out a new loophole here. So I don't want to say anything publicly that would bind our clients or our legal arguments
on anticipated litigation. That's fine. Thank you. Representative Carr, you're
Representative John P. Carr
Unverified
25:39
recognized for a question. Thank you, Mr. Chair. I just want to go on and say thank you for the quick response, Ms. Benton, for you and all your team and your clarification that was needed in my district and to get things back in order. So I appreciate you taking care of things, not only there, but throughout the state as well.
So thank you to all. Thank you, Mr. Chair. All right, members, seeing no other questions, I want to thank you all for coming and giving this explanation. so that the members know how to answer any questions they may get from constituents. I know you're working hard to inform the public so that they know what the impact of this ban is going to be on their businesses. So seeing no other business, we are adjourned.
Agenda
A. Call to Order
B. Discussion of Recent Eighth Circuit Court of Appeals Ruling
C. Discussion on Enforcement of Ban on Delta-8 Products
D. Other Business
E. Adjournment
Documents
| Title | Type | Pages | Source |
|---|---|---|---|
| Agenda — HOUSE RULES, Jul 9, 2025 | Agenda | 1 | Official source ↗ |
Speakers
Representative Jon S. Eubanks Chair
Unverified
Speaker 2
Speaker 3
Representative Johnny Rye
Unverified
Representative Nicole Clowney
Unverified
Speaker 21
Representative Dwight Tosh
Unverified
Representative Brit McKenzie
Unverified
Representative Stetson Painter
Unverified
Speaker 51
Chair
Unverified
Speaker 56
Speaker 59
Representative John P. Carr
Unverified