With a federal legal loophole for hemp products set to close this year, an O‘ahu dispensary is challenging state hemp regulations.
Lance Alyas, founder of O‘ahu Dispensary and Provisions, LLC, sued the state earlier this year over laws that regulate the sale of hemp products. Alyas told Aloha State Daily that Hawai‘i's hemp laws have made it illegal to sell about 80% of O‘ahu Dispensary’s products as of the start of this year.
A 2018 federal law — the Agriculture Improvement Act, or Farm Bill — removed hemp from the federal list of controlled substances, and instead defined hemp as the cannabis plant and any part thereof with a concentration of Delta-9 tetrahydrocannabinol (the substance that lends cannabis its psychoactive properties) of less than 0.3%.
This opened up a loophole in the law that allowed for a booming trade in technically legal hemp products that still get users high. Products with Delta-8 THC — which is still psychoactive — or hemp flowers with high concentrations of tetrahydrocannabinolic acid — a non-psychoactive precursor that is converted to Delta-9 THC via heat — could still meet the federal legal threshold.
Two years later, Hawai‘i changed its own hemp laws in response to the Farm Bill. The new state law — Act 14 — largely defined hemp the same way as the federal law, but included a clause to close the loophole: it required testing to determine whether a hemp product meets the 0.3% THC threshold.
The state standard now hinges the legality of a hemp product on the outcome of a specific testing methodology. The Department of Health codified that methodology into the state’s Administrative Rules in 2021, which, according to Alyas’ lawsuit, now means that the state defines hemp based on “total THC concentration” and not by the exclusive Delta-9 THC standard as set by the Farm Bill.
This deviation from federal law has effectively criminalized hemp products that would be legal under federal standards, Alyas claimed.
Furthermore, a 2025 Hawai‘i bill has required all hemp distributors to register with the DOH’s Office of Medical Cannabis Control and Regulation at the start of this year. Vendors are required to register with the office to sell any hemp products, and any registered vendor selling products that don’t meet the state’s testing standards can be fined up to $10,000 per offense, have their registration suspended and have their products destroyed by law enforcement.
Alyas’s lawsuit claims that O‘ahu Dispensary has complied with the terms of the 2018 Farm Bill, and that all products sold by the company contain no more than 0.3% Delta-9 THC. Nonetheless, Alyas told ASD his business has been targeted by “sting operations” by the Honolulu Police Department since it was founded in 2023.
According to state court records, Alyas has not been charged with any offenses beyond minor traffic violations.
Alyas told ASD his suit against the state, which he filed in January, can potentially overturn Act 14. The suit argues that the state law violates the Supremacy Clause of the U.S. Constitution by making illegal at state level something that is decriminalized at the federal level.
The suit also argues that the additional regulations imposed by the state place an undue burden on out-of-state commerce, and that the state’s efforts to seize or destroy property violates due process.
Meanwhile, the state — specifically, Attorney General Anne Lopez and DOH Director Kenneth Fink — has moved to dismiss the case, arguing that Alyas has no credible assertion of being harmed by the state laws.
Moreover, the state points out that Alyas’ argument relies on the definition set in the 2018 Farm Bill, which is on its way out. In November of 2025, President Donald Trump signed into law an agriculture bill that closes the Farm Bill loophole by defining legal hemp as having no more than 0.3% total THC concentration — the same definition as in state law.
That new federal definition takes effect Nov. 12 of this year.
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