Joshua S. Bauchner, Chair of the Cannabis, Hemp & Psychedelics Practice Group at Mandelbaum Barrett PC, recently explored a pivotal federal court ruling in his latest article for the New Jersey Law Journal—a decision that is sending shockwaves through New Jersey’s cannabis and hemp sectors.
In Loki Brands v. Platkin, U.S. District Judge Zahid N. Quraishi issued a preliminary injunction on October 10, 2024, blocking the enforcement of key provisions of the New Jersey Hemp Act Amendments (NJHAA). The ruling, which favored plaintiffs including Loki Brands, declared that New Jersey’s law conflicted with both the U.S. Constitution and the 2018 federal Farm Bill.
The Legal Divide
The NJHAA, signed into law in 2024, sought to redefine “hemp” under state law—specifically excluding so-called “intoxicating hemp products” (IHPs) from the definition and restricting their transportation and sale. Though Governor Murphy acknowledged concerns about the law’s constitutionality, he signed the bill regardless.
Within weeks, Loki Brands and other plaintiffs filed suit, challenging the law under two key legal principles:
- Federal Preemption, based on the 2018 Farm Bill’s express prohibition on states blocking the transportation of legal hemp; and
- The Dormant Commerce Clause (DCC), which prohibits state laws that discriminate against or burden out-of-state commerce.
The court agreed on both fronts. It found that New Jersey’s redefinition of hemp functionally criminalized the transport of federally legal hemp from other states—directly violating the Farm Bill. Additionally, the NJHAA’s explicit targeting of out-of-state hemp businesses was deemed facially discriminatory under the DCC, amounting to economic protectionism.
Why It Matters
The Loki Brands ruling is more than a company win, it’s a warning for all navigating the fragmented cannabis and hemp landscape.
As Joshua notes, the decision highlights the need for proactive risk management and creative legal strategy. For multistate operators and brand owners, the takeaway is clear: conflicting state laws can be challenged, but litigation is costly. The smarter approach? Build on federal law and partner with counsel who can guide you through shifting legal terrain.
Looking Ahead
This case should also resonate beyond cannabis and hemp. The issues at play—federal preemption, economic protectionism, and constitutional consistency—affect every emerging industry navigating inconsistent state regulations. As Bauchner notes, “Allowing competitors to commandeer market share due to fearful inaction is just as risky as pushing too far too fast.”
In other words, businesses must be both bold and thoughtful.
The Loki Brands case isn’t the final word, but it is a powerful reminder: when states enact laws that disadvantage out-of-state actors without legitimate justification, they may not only harm industry innovation but also violate the Constitution.
Read the full New Jersey Law Journal article here.
For more information, you can reach Joshua S. Bauchner at jbauchner@mblawfirm.com or at 646-369-0250.