A provision in the government funding bill that ended a record 43-day shutdown aims to clarify the definition of hemp and close a loophole that allowed the hemp-derived product industry to flourish with barely any regulation.
As The Hill reports, the now $28 Billion Hemp industry is gearing up for a significant lobbying fight, claiming the language could ban nearly all hemp-derived consumer products and will put companies out of business.
Hemp was legalized in the 2018 farm bill, with the intent that it could be used in agriculture and textiles. But the law’s broad definition and subsequent lack of federal regulation created a loophole that allowed companies to extract high levels of THC — the psychoactive compound responsible for a high.
The market soon flooded with hemp-derived gummies, drinks and vapes that can give people a marijuana-like high without being considered marijuana.
The Senate language was driven by Mitch McConnell
Sen. Mitch McConnell (R-Ky.) pushed hard for the 2018 legislation that classified hemp as an agricultural product. He pushed equally as hard for the language to close the so-called hemp loophole that supporters of the provision say has helped fuel a market of intoxicating hemp products. McConnell argued the new restriction restores the original intent of the farm bill.
The new restriction limits the total amount of THC that can be included in hemp-based products to 0.4 milligrams per container. Under the 2018 law, a product was considered hemp if it contained less than 0.3 percent delta-9 THC, the psychoactive ingredient in marijuana. But there was no mention of delta-8 THC, a chemical variant that is found in minuscule levels in natural cannabis.
The absence of federal rules has created a patchwork market, where products are allowed to be sold without strong labeling or testing requirements. Hemp companies began synthesizing high levels of delta-8 THC from CBD derived from hemp, and selling it in stores and online. In remarks on the Senate floor Monday, McConnell said the bill will “keep these dangerous products out of the hands of children while preserving the hemp industry for farmers.”
House, Senate GOP divided
The hemp provision was included in the Senate’s Agriculture Department funding bill over the summer. It cleared committee but then was removed by unanimous consent after McConnell’s fellow Kentucky GOP Sen. Rand Paul threatened to derail the bill’s passage.
Paul similarly waged a last-minute fight to try to keep the provision out of the government funding bill, threatening to drag out the process until he got a vote on an amendment to strip the language. He got that vote Monday; Paul and Sen. Ted Cruz (Texas) were the only Republicans who voted in favor. “This is the most thoughtless, ignorant proposal to an industry that I’ve seen in a long, long time,” Paul said after his amendment was defeated and the funding legislation passed.
The hemp provision was also included in the House’s Agriculture Department funding bill that advanced through committee, but it never made it to the floor. Notably, Rep. James Comer (R-Ky.) led a bipartisan group of 28 lawmakers in September opposing the inclusion of what he said was “anti-hemp language.”
The lawmakers sent a letter to House GOP leaders calling on them “to stand up for American hemp farmers by removing the language” from the appropriations bill and any final fiscal 2026 appropriations package. The letter was signed by almost the entire Kentucky delegation, save Reps. Hal Rogers (R) and Brett Guthrie (R).
Could impact almost all products
Rather than focusing on the concentration of delta-9 THC, the new law prevents companies from having products containing a total concentration of any THC greater than 0.3 percent. It also closes what is called the “derivative loophole” by prohibiting products that are derived from CBD, like delta-8 THC. There are very few products currently on the market that would meet those definitions. Some companies say it could even prohibit full-spectrum CBD — if it has a THC content greater than 0.3 percent.
Hemp industry leaders said they want government regulation, not bans. Many states have stepped in to regulate hemp products, which they say proves there is a way forward that isn’t prohibition. “We are concerned about some of the consumer health threat that is presented by not having regulation,” said Thomas Winstanley, executive vice president and general manager at edibles.com, an online platform for low-dose gummies and beverages backed by Edible Brands, the parent company of Edible Arrangements. “And as we see it, prohibition is going to be a solution to a problem that is going to actually end up exacerbating it. It is a cure worse than the disease,” Winstanley said.
Those in favor of the new restriction argue the law isn’t the death knell the industry claims. “These products don’t have to go away. This isn’t a ban. This isn’t regulation either. The only thing that the language included this week does, is it says we are cleaning up the definition of ‘what is hemp?” said Cory Harris, the senior policy advisor for the American Trade Association for Cannabis and Hemp (ATACH).
Harris said the new law stops companies from selling unregulated marijuana products masquerading as hemp, which are advertised as a less potent cousin of marijuana. “The cannabis industry has worked really hard to show that they want to be legitimate players, that they want to operate in highly regulated spaces, and they want to sell products that are safe and consistent and that instill consumer confidence and that bolster public safety, and what we’ve seen over the last seven years is a complete erosion of all of that,” Harris said.
“These guys … found a way to sell knockoff weed, with no rules, everywhere.”
One-year lead time
The language in the funding bill gives a one-year period before the ban takes effect. Industry groups and companies said they will use that time to try to push for similar regulation to legal marijuana: stronger age verification to limit sales to people 21 years and older, third-party laboratory testing, independent licensing, and excise taxes on hemp/THC products.
The Food and Drug Administration (FDA) has 90 days from the bill’s signing to publish a list of natural and synthetic cannabinoids and provide a definition for “container.”
The hemp industry is regrouping and gearing up for a significant lobbying blitz. Winstanley, who is based in Georgia, previewed some of the messaging that will be focused on the midterm elections next year. “You have states like ours in Georgia, where folks like [Democratic Sens.] Jon Ossoff and [Raphael] Warnock, they’re representatives of a state that has a legal hemp framework,” Winstanley said.
“It would be a disservice to their constituents to rescind and support federal bans, or not support language that can codify a future of this industry, because this will be a major trickle down as we get into midterms and we start to see the segments of the market that are asking for these things.”
Lobbying blitz has unconventional allies
Lobbying over the hemp language has led to groups typically on opposite sides working towards the same goal, including alcohol groups, cannabis and cannabis-adjacent companies, as well as major marijuana prohibition groups.
Getting the hemp language passed “was something that we’re very proud of,” said Kevin Sabet, president of Smart Approaches to Marijuana, one of the leading anti-marijuana groups. “It’s the biggest change in marijuana policy, I would say, in a generation,” Sabet said. “To recriminalize and ban a form of marijuana/hemp, that’s extremely dangerous, so we’re very proud of that.”
Harris of ATACH, which represents regulated cannabis companies, said he understands the irony of being on the same side of a cannabis issue as SAM. “You know, they’ve been coming after us for years,” Harris said. “I think they saw the writing on the wall that, if they thought we were bad news having our products on the market, having similar products on the market with no rules and no regulations and no parameters or guardrails — I think that was a nightmare scenario for them.”
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