Congress Bans Most Hemp Products, Leaving Industry Unsettled and Uncertain

In passing the appropriations bill to end the federal government shutdown, Congress this week also dealt a potential death blow to the multi-billion dollar hemp industry. Included in the bill is a provision that ends the so-called hemp loophole, which allowed companies to get around the 0.3 percent THC cap on hemp products by using laboratory processes to extract THC and other cannabinoids from raw hemp.

The provision also bans synthetic cannabinoids and sets a 0.4 milligram limit on THC in any one container, meaning that many non-intoxicating hemp products, including those containing CBD will also be banned. It bans "any final hemp-derived cannabinoid products containing … greater than 0.4 milligrams combined total" of THC or "any other cannabinoids that have similar effects (or are marketed to have similar effects)."

Including that provision in the bill means virtually all hemp products currently on the market will be illegal when the law takes effect next year--unless Congress enacts regulatory legislation before November 2026.  According to the industry group the US Hemp Roundtable, that is a nearly $30 billion a year industry and about 300,000 jobs about to go up in smoke. Those hemp-derived gummies, vapes, and drinks will be gone—or only available in an unregulated black market.

The industry and its supporters had argued that any concerns about intoxicating hemp products could be addressed via regulation, but prohibitionist forces within the ruling Republican Party opted to criminalize them instead.

While hemp had long been treated as a controlled substance indistinguishable from marijuana, then Senate Majority Leader Mitch McConnell (R-KY) championed its legalization in the 2018 farm bill. But despite the urgent protests of Kentucky hemp farmers, this year McConnell changed his tune, saying that legislation unwittingly opened a space for intoxicating hemp products.

"Unfortunately, companies … [take] legal amounts of THC from hemp and [turn] it into intoxicating substances," McConnell said during debate on the bill Monday. Those companies, he claimed, use "candy-like packaging" to market it to kids in "easily accessible places like gas stations," he said.

Fellow Kentucky Republican Sen. Rand Paul was a lonely advocate for the industry, having been joined only by Sen. Ted Cruz in voting against the provision. Paul said offers to find a regulatory path forward had been ignored.

"The hemp industry, myself and others have come together and we have been willing to negotiate to get rid of the bad actors," Paul said during debate on Tuesday. "And yet instead we are met with legislation that would be prohibition. Every hemp seed in the country will have to be destroyed," he added. "This is the most thoughtless, ignorant proposal to an industry that I’ve seen in a long, long time."

Support for the legislation came not only from Republican prohibitionists but also from a somewhat surprising source: the legal marijuana industry. Some industry players see hemp-derived cannabinoids as competition for their products.

"The bill passed tonight carefully distinguishes between intoxicating and nonintoxicating products and synthetic and natural products," said Chris Lindsey, a vice president at the American Trade Association for Cannabis and Hemp, an industry group that includes companies operating in states where marijuana is legal, whether for adult use or for medicinal use.

But that's not true, said US Hemp Roundtable general counsel Jonathan Miller.

"US senators were promised that this bill protects nonintoxicating CBD products, which is manifestly untrue — the large majority of nonintoxicating CBD products on the marketplace feature more than 0.4 mg of THC per container," said Miller.

Noting that the legislation could wipe out 95 percent of the hemp industry and cost states more than $1.5 billion in lost tax revenues, the US Hemp Roundtable is also vowing to fight on.

"If the language passes, as-is, the hemp industry is committed to continuing the fight," the group said in a Monday press release.  During the one-year proposed moratorium, US Hemp Roundtable will work closely with lawmakers to reverse the ban and replace it with responsible, science-based regulations that crack down on misleading and purely synthetic products, create restrictions that keep products out of the hands of children, and promote standard manufacturing practices. Unlike these regulations, the current proposal fails to protect consumers and risks fueling a dangerous black market.

"Our industry is being used as a pawn as leaders work to reopen the government. Recriminalizing hemp will force American farms and businesses to close and disrupt the wellbeing of countless Americans who depend on hemp," the Roundtable's Miller said in the statement. "We support Sen. Rand Paul’s efforts to push back on this language and will continue to fight alongside him for a regulated, safe, and robust hemp industry."

After the bill passed Congress Wednesday, the US Hemp Roundtable declared "it ain't over." Noting that thanks to Sen. Paul, the industry has 365 days before the ban goes into effect, the group said it was confident it can find "a path forward" in the interim.

"First," the group argued, "the harmful hemp language passed was fueled by misinformation and unrelated political maneuvering. US senators were promised that this bill protects non-intoxicating CBD products, which is manifestly untrue – the large majority of non-intoxicating CBD products on the marketplace feature more than 0.4 mg of THC per container. They were assured that this would crack down on fully synthetic products and copycat, high THC products that are marketed to kids – but prohibition without regulation will shift these products to the black markets. Senators were scared by claims that this hemp debate would lead to a longer and more painful government shutdown, forcing some of our good friends to vote against us to hurry the government’s opening. Once all of these dynamics are exposed, we believe that we can develop a political consensus on behalf of hemp.

"Second, we have a strong gameplan to move forward. Rep. Morgan Griffith (R-VA) plans to soon introduce a bill that would replace a total ban with robust regulation of hemp products (exactly what we have been advocating for!), including requiring good manufacturing practices, truth in labeling, bans on synthetic THC, and strong measures to keep products out of the hands of children. As chairman of the powerful Health Subcommittee of the House Energy and Commerce committee, Griffith is perfectly positioned to secure a fair and just result. In the Senate, Sens. Ron Wyden (D-OR) and Jeff Merkley (D-OR) will reintroduce their regulatory bill soon, for consideration by the Senate Health, Education, Labor and Pensions (HELP) committee, where we expect action as well. The Roundtable will be furiously lobbying both committees and seeking your help to send emails and make phone calls to secure a positive result."

The clock is ticking.