The recently passed government funding bill, signed by President Trump on Wednesday, successfully ended the longest government shutdown, contains provisions that could dramatically reshape the hemp industry. Tucked within the legislation are measures aimed at closing what lawmakers refer to as the “hemp loophole,” created by the 2018 Farm Bill. These new rules threaten to ban the vast majority of intoxicating hemp-derived products currently on the market.
The passing of this bill is a huge change in federal policy as we know it. While most of the nation’s attention was on the resolution of the government shutdown, Congress moved to recriminalize a multi-billion dollar industry that has flourished over the past several years.
Closing the 2018 Farm Bill “Loophole”
The 2018 Farm Bill federally legalized hemp by defining it as cannabis containing less than 0.3% delta-9 THC by dry weight. This definition unintentionally created a legal pathway for intoxicating products, like those containing delta-8 THC, derived from legal hemp.
Entrepreneurs quickly capitalized on this opening, leading to a boom in products like THC-infused drinks, edibles, and vapes sold in stores across the country.
Politicians who support the new ban argue they needed to address this unregulated market. Rep. Andy Harris (R-MD) stated the provision “closes the hemp loophole that has resulted in the spread of unregulated intoxicating hemp-derived products.”
Proponents, including Sen. Mitch McConnell (R-KY), who originally championed the 2018 hemp legalization, have argued the change is necessary to “keep the dangerous products out of the hands of children.”
This sentiment is shared by a bipartisan coalition of 39 state attorneys general who urged Congress to clarify the federal definition of hemp to prevent the sale of intoxicating products to minors.
New Hemp Ban Regulations
Section 781 of the new funding bill amends the Agricultural Marketing Act of 1946, fundamentally changing the definition of legal hemp. The changes are set to take effect one year after the bill’s enactment, giving the industry a 365-day grace period to adapt or advocate for new legislation.
The new language introduces several key restrictions:
- Total THC Calculation: The 0.3% THC limit will now apply to “total tetrahydrocannabinols,” which includes not only delta-9 THC but also its acidic precursor, THCa. This is a significant change from the previous focus on only delta-9 THC.
- Similar Cannabinoids Included: The definition is expanded to include “any other cannabinoids that have similar effects (or are marketed to have similar effects) on humans or animals as a tetrahydrocannabinol.” The Secretary of Health and Human Services (HHS) will be responsible for determining which cannabinoids fall into this category.
- Synthetic Cannabinoids Banned: The bill explicitly bans products containing cannabinoids synthesized or manufactured outside the cannabis plant, even if they are chemically identical to naturally occurring ones.
- New Milligram Cap: For final products sold to consumers, the legislation imposes a strict limit of 0.4 milligrams of total THC (and other similar cannabinoids) per container. This cap is so low that it would effectively eliminate nearly all currently available intoxicating hemp edibles and beverages from the market.
Within 90 days of enactment, the FDA and other agencies must publish lists of all known cannabinoids naturally produced by the cannabis plant. This will clarify which substances fall under the new regulations.
The Uncertain Future for the Hemp Industry Amid Ban
The response from the hemp industry has been one of alarm, with many predicting an “extinction-level event.” Joe Gerrity, CEO of Crescent Canna, told The Hill that “Ninety-five plus percent of sales in the hemp market have what are now disqualifying levels of THC in them,” meaning the entire edible and beverage market could disappear. Industry groups share this feeling, estimating the legal hemp market could reach nearly $30 billion by 2030 if policymakers leave it unchecked.
Despite the bill’s passage, however, the fight is not over for hemp advocates. The one-year implementation period provides a crucial window for the industry to lobby Congress for changes. Furthermore, some lawmakers, like Sen. Rand Paul (R-KY), have already voiced strong opposition. During the debate, Paul argued the bill “overrides the regulatory frameworks of several states, cancels the collective decisions of hemp consumers and destroys the livelihoods of hemp farmers.”
The Senate rejected his attempt to introduce an amendment removing the hemp ban from the spending bill in a 76-24 vote, as reported by Marijuana Moment.
This legislative battle pits hemp farmers and businesses against a powerful coalition that includes some alcohol industry groups, anti-marijuana organizations, and even some factions within the state-legal marijuana industry who see the unregulated hemp market as unfair competition.
What Happens Next?
With President Donald Trump signing the bill into law, the clock has officially started on the one-year countdown to implementation. The hemp industry now faces a monumental task: convince Congress to pass new legislation that would save it from what many see as imminent collapse.
For now, thousands of farmers, entrepreneurs, and employees who built their livelihoods around the 2018 Farm Bill face an uncertain future. However, the coming year will be a critical period that determines whether the booming market for hemp-derived THC products was a temporary phenomenon or a permanent fixture in the American economy.
