A federal judge on Friday declined to postpone a change in state hemp regulations, set to take effect Saturday, that seven Virginia companies say will remove their ability to sell many products and could wipe out their businesses entirely.
The change makes selling hemp gummies, drinks, oils and other products with more than 2 milligrams per package of tetrahydrocannabinol — THC, the main intoxicating compound in cannabis — illegal in Virginia.
It came out of the state budget bill, finalized in June, that also will allow a limited number of licensed Virginia retailers to sell marijuana starting July 1 of next year.
Hemp business owners, represented by attorney and former state Sen. Chap Petersen, appeared Wednesday in federal court in Roanoke to ask U.S. District Judge Robert Ballou to delay the new rule, arguing that it will cause them significant harm and is happening too quickly for them to adjust.
“It will nullify, in some cases, 80 to 90% of their revenue and products,” Petersen said during the three-and-a-half-hour court hearing.
But Ballou said in his opinion published Friday that the businesses had not met the standards required for him to grant a delay and that “it is not the role of this Court to second-guess the Virginia legislature in setting an effective date for the new law.”
Petersen has previously said he hoped to postpone the new rule at least until the Virginia General Assembly could reconsider it. He has said that it came out of a rushed budget process that lacked public hearings and other standard processes.
In an interview Friday after the ruling, Petersen said that he was “disappointed” and that his clients could appeal the judge’s decision but they had not yet decided what steps to take next.
“I thought we put forward pretty compelling evidence of the economic harm to my clients. I don’t know what else we could do,” Petersen said.
Companies say THC rule change could put them out of business
Up until the change in law, businesses have been able to sell hemp products with more than 2 milligrams of THC per package if the products also had at least 25 parts of cannabidiol — CBD, a non-intoxicating component of cannabis — for each part of THC. The products also must have no greater than 0.3% total THC.
Petersen and the hemp businesses sought a delay in ending this “25-to-1” rule as part of a larger federal lawsuit against Gov. Abigail Spanberger and other state and local officials.
They argue that by making it illegal to sell hemp products with more than 2 milligrams of THC, Virginia is unconstitutionally taking away the value of the businesses’ property without compensating them.
“The bottom line is the profitable use for hemp after Aug. 15 is going to go away,” Petersen said during Wednesday’s hearing.
But defense lawyers with the Virginia Attorney General’s Office countered that ending the 25-to-1 rule is not an unconstitutional taking of property and that the state has a right to enforce its own regulations.
“It does concern some intoxicating products with real health and public safety risks,” said Ethan Fallon, deputy solicitor general with Attorney General Jay Jones’ office.
Fallon and Senior Assistant Attorney General Pebbles Burgess argued that many of the businesses were operating before the 25-to-1 rule was enacted in 2023 and that they could sell other products after the rule goes away.
Furthermore, they argued that regardless of Virginia’s laws, the businesses already should be preparing for changes in the federal government’s definition of hemp — approved in November 2025 and set to take effect later this year — that further restricts total THC content to 0.4 milligrams per container.
“The emergency aspect of them changing their business model isn’t quite as short as they’re suggesting,” Fallon said.
It remains to be seen what happens next. Multiple hemp business owners testified Wednesday that they might have to close up shop after the 25-to-1 rule ends.
Cody Moorefield, owner of Simply Hemp in Collinsville, testified that sales impacted by the change make up more than half of his store’s profits.
“Without these products, I don’t think there’s going to be enough for me to continue,” Moorefield said.
Business owners argued that they’ve put thousands of dollars into investments that will no longer be viable. Retailers bought inventory, hemp processors made products with more THC than will be allowed and growers planted seeds in the spring but now face a fall harvest with fewer prospects for selling their plants.
“I really just don’t see it being a profitable market at all,” testified Graham Redfern, owner of Redfern Hemp Co., which grows hemp on a Caroline County farm.
Business owners said that they have not received guidance from state agencies about how to handle the drinks, oils and other products that they’ll no longer be able to sell.
“I have no idea what I’m supposed to do with this inventory,” testified Barbara Biddle, owner of Manassas-based District Hemp.
Some expressed concern about possible legal repercussions from ending up with potentially felony-level quantities of products on hand.
“I have tons of what could be considered marijuana in drink cans,” testified Travis Lane, whose company, Fauquier County-based Nova Hemp, sells THC-infused beverages.
Meanwhile, the federal lawsuit remains active.
Besides District Hemp, Nova Hemp, Redfern Hemp Co. and Simply Hemp, other plaintiffs in the suit are Powhatan County-based Cypress Hemp, Chesterfield County-based Kultivate Wellness and Rockingham County-based Pure Shenandoah.
Besides Spanberger and Jones, defendants are Charles Green, commissioner of the Virginia Department of Agriculture and Consumer Services; the Virginia Cannabis Control Authority; Jamie Patten, head of the cannabis authority; and multiple counties’ commonwealth’s attorneys.
