Mellow Fellow Fun v. Ivey — Federal Hemp Preemption Challenge to HB 445

Last verified: May 2026

The Federal-Preemption Theory

The 2018 federal Farm Bill (Agriculture Improvement Act of 2018) federally legalized hemp by defining "hemp" as the cannabis plant and any part of the plant containing not more than 0.3% delta-9 THC by dry weight (7 U.S.C. § 1639o(1)). Federal hemp is exempt from the Controlled Substances Act’s Schedule I designation under 21 U.S.C. § 802(16)(B).

Plaintiffs argue that the federal definition preempts state regulation of hemp-derived products because (a) federal law has expressly defined hemp and exempted it from controlled-substance status; (b) state regulation that effectively re-criminalizes hemp-derived products contradicts the federal scheme; and (c) the federal Farm Bill’s express provision permitting states to maintain or implement their own hemp regulatory programs does not authorize states to ban hemp-derived products altogether.

The preemption theory has significant federal-court support in similar cases:

• Carolina Hemp Hut v. Stein (M.D.N.C. 2024) — preliminary injunction granted against North Carolina hemp restrictions on similar grounds.
• NCC Imports v. Knudsen (D. Minn. 2024) — partial preliminary injunction against Minnesota hemp restrictions.
• Hemp Industries Association v. DEA (multiple decisions across years) — established the federal-hemp definition’s primacy.

The Dormant Commerce Clause Theory

Plaintiffs also argue HB 445 violates the Dormant Commerce Clause by imposing burdens on interstate hemp commerce that exceed legitimate local public-health interests. Specifically:

• HB 445 prohibits Alabama-licensed retailers from selling hemp-derived intoxicant products that are lawful under federal law and lawful in many other states.
• HB 445 effectively forces Alabama hemp-derived intoxicant business to relocate out of state, while Alabamians continue to purchase via online interstate channels.
• The 10% excise tax + ABC-distribution requirement creates a state-licensee preference that disfavors out-of-state hemp products.

The June 30, 2025 TRO Denial

Judge Anderson denied the plaintiffs’ motion for a temporary restraining order on June 30, 2025 — one day before HB 445’s July 1 effective date. The denial allowed HB 445 to take effect on schedule. Anderson’s order rested principally on the standard for TRO relief (likelihood of success on the merits, irreparable harm, balance of equities, public interest) and the procedural posture of the case at the TRO stage.

The TRO denial does not resolve the underlying merits. The case proceeds through the standard federal-court schedule with motions for preliminary injunction, summary judgment, and (potentially) trial.

Continued Operations Under Stay Arrangements

Mellow Fellow Fun and the other plaintiffs have continued operations under various stay arrangements pending the litigation. Some of the products HB 445 restricts have been removed from inventory; others continue to be sold under arguably-grandfathered or otherwise-distinguishable status.

Other Alabama hemp retailers have made varying compliance choices:

• Some have closed entirely.
• Some have transitioned to ABC-licensed-liquor-store distribution (which substantially reduces volume because of the smaller retail-outlet count).
• Some have shifted to interstate online sales targeting Alabama customers.
• Some have repositioned to non-restricted products (CBD-only items, hemp-derived consumer products that don’t meet the § 20-2A intoxicant definition).

The Defendants — Gov. Ivey and AG Marshall

The case names Gov. Kay Ivey and AG Steve Marshall as defendants in their official capacities. The defendants’ legal positions:

• The Farm Bill expressly preserves state authority to regulate hemp under 7 U.S.C. § 1639p (state and tribal hemp production plans) and the broader public-health and safety police power.
• State authority over consumer products extends to age-gating, labeling, dosing, distribution, and excise taxation.
• HB 445 does not categorically ban hemp; it regulates hemp-derived intoxicants on terms applicable to similar adult-only products (alcohol, tobacco).
• The Dormant Commerce Clause permits state public-health regulation that incidentally burdens interstate commerce when the burden is outweighed by the local benefit.

The Federal-Cliff Backstop

Even if Mellow Fellow Fun wins the preemption challenge, the federal-cliff provision (Public Law 119-37 Section 781, effective November 12, 2026) would effectively moot the underlying issue. The federal-cliff provision redefines hemp by total-THC standard plus a 0.4 mg per container cap — effectively eliminating the high-dose hemp-derived intoxicant products that HB 445 targets.

This means the most consequential question may not be whether HB 445 survives preemption challenge, but whether the federal-cliff implementation goes forward and whether Congress acts to repeal or extend the implementation date. See federal cliff page.

Plaintiff’s Counsel

Mellow Fellow Fun LLC is represented by counsel with experience in federal hemp-preemption litigation. The plaintiffs’ bar in this niche has consolidated around several firms with multistate hemp-litigation portfolios.

Practical Takeaways for Operators

• HB 445 is in effect. Alabama-located hemp retailers must comply with the bill’s restrictions or face state criminal exposure.
• The Mellow Fellow case is one path to relief. Operators considering federal litigation should consult counsel and consider joining or supporting the existing case rather than filing duplicative actions.
• The federal cliff is a separate concern. November 12, 2026 implementation could moot HB 445 even if the case succeeds.
• Compliance with ABC distribution is the principal lawful pathway. Alabama-licensed liquor stores are the only authorized retail outlet for hemp-derived intoxicants.