Sudden Federal THC Ban Leaves Hemp Industry Reeling

Upcoming Federal THC Ban Expected to Disrupt Hemp Products Industry

An emergency federal THC ruling has rocked the hemp industry, sparking chaos and outrage as businesses scramble to understand what it means for their future. A new provision in the forthcoming federal spending bill could change what is considered hemp under the law. With this amendment, only hemp and its derived products that do not exceed a total THC level of 0.3% on a dry weight basis would be legal.

This redefinition would effectively criminalize most intoxicating hemp-derived cannabinoids, including Delta-8 THC and other synthesized compounds that have exploded in popularity since the passage of the 2018 Farm Bill. That law had legalized hemp and its products, and mistakenly created a loophole that made it legal for hemp processors to produce the psychoactive product.

Legislators recently rejected an amendment that would have stripped the ban language from the bill, and now many hemp businesses are grappling with uncertainty over what happens next. Industry leaders warn that this new regulation might bring jobs loss, devastate downtown businesses and force companies to throw product into the waste stream. The hemp industry, which has it booming since 2018, is now confronting one of its most difficult regulatory challenges.

Hemp Industry Steps Up Lobbying as Deadline for Legalization Nears

As the federal THC ban possibly nears passage, hemp growers and businesses race to identify compliance risks The new rules could render many products — even ones that contain trace elements of THC or other compounds similar to it — illegal overnight. Businesses are already bracing for products recalled, sales suspended and expensive legal adaptations.

Large alcohol and marijuana companies have embraced the change, saying it ensures safe products for consumers while maintaining a level playing field, but small hemp enterprises counter that an estimated $28 billion hemp market could be destroyed. Many argue the emphasis should be on regulation and testing, not prohibition.

If the bill is approved by both chambers of Congress and signed by the president, the new definition for hemp could be in place as soon as 12 months after its passage. In the meantime, hemp companies are hunkering down for massive upheaval — and potentially the end of the hemp-derived cannabinoid boom.