The Fiscal Year 2026 Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Bill, recently advanced by the U.S. House Appropriations Committee, and if passed, would introduce significant changes to the hemp and cannabinoid regulatory landscape in the United States.
This proposed legislation seeks to close what is often referred to as the “hemp loophole” established by the 2018 Farm Bill, thereby redefining how hemp-derived products are regulated in the United States.
While this bill is in its early stages, it has started intense conversations in the hemp industry due to the implications it carries for growers, manufacturers, retailers, and consumers.
What Does the FY 2026 Agriculture Bill Propose?
At the core of this bill is a redefinition of hemp that limits the scope of legal hemp-derived products. The 2018 Farm Bill defines hemp as cannabis with no more than 0.3% delta-9 tetrahydrocannabinol (THC) on a dry-weight basis.
This definition allowed the production and sale of hemp-derived products, including those that do not produce a psychoactive “high,” such as cannabidiol (CBD).
The FY 2026 bill, however, goes further. It redefines hemp to exclude products containing “quantifiable” amounts of THC or THCA (the acidic precursor to THC), as well as cannabinoids that mimic THC’s effects.
The legislation also targets cannabinoids that are not produced naturally by the hemp plant, such as delta-8 THC and delta-10 THC, which are synthesized through chemical processes.
These cannabinoids have risen in popularity over the years due to their intoxicating effects, which led to their marketing as alternatives to delta-9 THC.
The Secretary of Health and Human Services and the Secretary of Agriculture have the authority to define “quantifiable” amounts of THC or similar cannabinoids, leaving room for interpretation.
The bill also maintains an exception for industrial hemp products intended for non-cannabinoid purposes, such as fiber, grain, oil, and certain edible products used as food.
This isn’t Harris’s first attempt. In 2023, he led efforts to include similar language in the FY2025 Agriculture Appropriations bill, but the measure ultimately failed.
Why Is the Hemp Loophole a Focus in the Fiscal Year 2026 Agricultural Bill?
One of the main goals, according to subcommittee chair Rep. Andy Harris (R-MD), is to address the proliferation of intoxicating cannabinoid products, such as delta-8 THC, being sold legally under the current regulatory framework.
Companies market these products as federally legal because their delta-8 THC content comes from hemp, not marijuana. You can often find them in gas stations, convenience stores, and online marketplaces.
Harris has argued that this loophole allows for the sale of intoxicating substances under the guise of legal, USDA-approved hemp products, which he believes was not the original intent of the 2018 Farm Bill.
The FY 2026 bill aims to rectify this by banning most consumable products containing trace amounts of THC or similar cannabinoids.
Hemp Industry Concerns
This redefinition has alarmed hemp growers and manufacturers, particularly because it imposes stricter limitations on the kinds of products they can sell under the hemp label, a major economic driver for the industry.
Many worry that new restrictions could also target non-intoxicating CBD products, which often contain trace amounts of THC within federally allowable limits.
Advocacy groups like the U.S. Hemp Roundtable have criticized the bill for what they call an attack on a legal industry. They claim the legislation risks wiping out much of the progress made in legitimizing hemp-based commerce by creating federal standards for THC concentration.
Further, this proposed change could undermine the economic viability of the hemp industry, which has seen growth in recent years thanks to the popularity of CBD and other cannabinoid-based wellness products.
Small-scale farmers and producers, in particular, could face tough decisions about whether to pivot to industrial hemp or scale back operations altogether.
What the Fiscal Year 2026 Agriculture Bill Preserves
Despite the restrictions on cannabinoid-containing hemp products, the bill preserves federal allowances for industrial hemp. Products such as hemp fiber, hemp grain, and microgreens remain legal under the new definition, provided they are not intended for cannabinoid extraction.
Textiles, food, biofuels, and other non-consumable markets rely on these applications, which have historically formed the foundation for hemp use.
The proposed legislation now specifies that hemp does not include “a drug that is the subject of an application approved under subsection (c) or (j) of section 505 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355).”
This clarification may create an exception for FDA-approved drugs like Epidiolex, a CBD-based medication used to treat certain seizure disorders.
Regulatory Challenges Ahead for Fiscal Year 2026 Agriculture Bill
One aspect of the bill that warrants close attention is the delegation of regulatory authority to determine what constitutes “quantifiable” THC or similar cannabinoids.
Federal agencies make this decision, which could create uncertainty and uneven interpretation of the law. It is also unclear how the proposed bill will reconcile with state-level cannabis and hemp laws, many of which are more permissive than those outlined in the pending legislation.
Furthermore, the enforcement of this bill could place additional strain on regulatory agencies tasked with oversight. Testing laboratories, manufacturers, and retailers will need guidance on compliance, further complicating rollout in an industry already facing scrutiny and evolving regulations.
Impacts Beyond the Hemp Industry
The implications of this bill extend beyond the hemp industry itself. The legal ambiguity surrounding intoxicating cannabinoid products has created tension in areas such as law enforcement, public health, and consumer safety.
Proponents of the bill argue that it will reduce the presence of unregulated and potentially unsafe products in the market.
However, those in the hemp industry emphasize the need to distinguish between intoxicating products and non-intoxicating cannabinoids like CBD.
If enacted, this legislation could shift consumer behavior, with those seeking cannabinoid-based products turning toward state-legal cannabis markets or even black-market alternatives. This migration could inadvertently exacerbate some of the very issues the bill seeks to address.
Looking Ahead
The FY 2026 Agriculture Bill is currently advancing through Congress and is undergoing markup by the full House Appropriations Committee as of the writing of this. While the intentions behind closing the hemp loophole may be clear, the path forward will likely demand many more questions.
For those within the cannabis and hemp industries, this pending legislation highlights the importance of staying informed and active in advocacy efforts.
Ample resources are available to help businesses and individuals understand the nuances of the bill and prepare for potential changes to the regulatory landscape, which you can do here, via the U.S Hemp Roundtable.
