A Ninth Circuit panel on Wednesday seemed conflicted over whether to wade into a debate over hemp and the 2018 Farm Bill, an issue highlighted by the case of a truckload of Colorado-bound hemp seized by Idaho police as illegal contraband earlier this year.

In oral arguments in Seattle, the three judges pressed the hemp's owner, Big Sky Scientific of Aurora, Colorado, to explain why Idaho's state courts aren't best suited to decide whether it should get the cargo valued at more than $1 million back.

"Why can't you vigorously litigate your position in front of the state court and see what happens?" Senior Judge Michael Daly Hawkins of the U.S. Court of Appeals for the Ninth Circuit asked Big Sky Scientific's attorney, Stoel Rives partner Christopher Pooser, just seconds into his opening argument. "If you come out on the wrong end, you can always come back here."

The hemp company is not a defendant in the state's prosecution of the shipment's contract driver, who has been charged with trafficking marijuana, Pooser noted. Big Sky Scientific has intervened in a state in rem action over the hemp's ownership, but that proceeding won't address "broader issues" over the interstate transportation of hemp and CBD products, Pooser said.

"But if you interpose a defense that it's permitted under the 2018 Farm Bill, that would apply to future settlements as well presumably," said Judge Jay Bybee of the U.S. Court of Appeals for the Ninth Circuit. "Idaho would certainly know that if it's going to seize more hemp coming through the interstate that every time it goes to an in rem proceeding it's going to lose."

But the state's in rem, or forfeiture, proceedings tied to Big Sky Scientific's hemp have been paused while the company pursues its litigation in federal court. At the same time, the state's criminal prosecution of the hemp truck driver continues, a fact that troubled Hawkins and Judge M. Margaret McKeown of the U.S. Court of Appeals for the Ninth Ciruit.

The driver either "pleads guilty, you give him some kind of diversion or not or he goes to trial," McKeown said. "But Big Sky is not there … Since that's the procedure in Idaho that gives me pause about whether we should abstain, because Big Sky doesn't have any stake in the criminal proceedings."

Hawkins said the state's decision to prosecute the driver while the forfeiture proceedings are on hold "created a big problem."

"At least for me, in the absence of assurance that the in rem proceeding will go forward with Big Sky as a party, where they can litigate their Farm Act defenses, it causes me great pause," Hawkins said. "You can do whatever you want with that," he told attorneys for the state. "I may not be able to convince my friends."

State police nabbed Big Sky Scientific's hemp during a traffic stop outside of Boise, Idaho, in January. Hemp is not legal in Idaho, and while lab tests showed the cargo's THC levels were less than 0.3%, the threshold for defining hemp, the state deems products containing any amount of THC to be illegal marijuana.

Big Sky Scientific sued, but in February Chief U.S. Magistrate Judge Ronald Bush of the U.S. District Court for the District of Idaho refused to order the state to hand back the hemp. Bush wrote that while the 2018 Farm Bill made hemp a legal agricultural commodity, Big Sky Scientific's shipment "could not have been grown under either a federal or state plan implemented under the 2018 Farm Bill, because neither the federal government nor the state of Oregon (where the hemp is alleged to have been grown, harvested, and shipped from) has yet enacted such a plan."

USDA general counsel Stephen Vaden issued an opinion in May that states cannot block interstate shipment of hemp made legal in the 2018 Farm Bill. Vaden wrote that he didn't agree with Bush's reasoning in allowing the seizure to stand.

Counsel for Big Sky Scientific, which include attorneys from Stoel Rives and Hogan Lovells, argue that the hemp was legally grown under a 2014 federal program and shipped in accordance with provisions of the 2018 Farm Bill.

With hemp and its derivative, CBD, exploding in popularity, the case has attracted national attention while pointing out the state-federal conflict over the plant and its regulations. The U.S. Department of Agriculture is expected to issue new regulations for hemp production this fall in time for the 2020 growing season.

Attorneys for the state say Big Sky Scientific should have waited for those regulations—or at least avoided driving its hemp through Idaho until then.

Merritt Dublin, an attorney for the Idaho State Police, said the forfeiture case was stayed pending the criminal prosecution against the driver to avoid potential problems with discovery. The state should not have to pursue the in rem proceedings at the same time, she said, because the driver will raise the same defense—that the hemp shipment is legal under the 2018 Farm Bill—as Big Sky Scientific would have.