From Legal to Illegal: Hemp Industry Faces Shock Ban in Shutdown Agreement

News of a deal to reopen the federal government swept through the cannabis and hemp communities on Sunday when it was revealed that the agreement includes provisions to ban intoxicating hemp products. Under the spending plan hammered out by Senate Republicans and eight Democratic moderates in the chamber, the federal government would criminalize many hemp-derived products that have become popular since the 2018 Farm Bill legalized the crop, Marijuana Moment reported.

The appropriations bill at the heart of the agreement would end the government shutdown, which has continued for 41 days. Under its hemp provisions, the measure “prevents the unregulated sale of intoxicating hemp-based or hemp-derived products, including Delta-8, from being sold online, in gas stations, and corner stores, while preserving non-intoxicating CBD and industrial hemp products,” according to a summary published on Sunday by the Senate Appropriations Committee.

Under current federal law, cannabis with no more than 0.3% delta-9 THC on a dry weight basis is considered legal hemp. If the appropriations bill is enacted in its current form, the total weight of THC would include delta-8 THC and other isomers of the compound. The measurement would also include “any other cannabinoids that have similar effects (or are marketed to have similar effects) on humans or animals as a tetrahydrocannabinol (as determined by the Secretary of Health and Human Services).”

Proposed Ban Divides Cannabis and Hemp Community

The debate over hemp products with THC and other intoxicating cannabinoids has divided advocates for the plant. Many in the regulated marijuana industry say a ban is needed to correct a loophole in the 2018 Farm Bill, while hemp advocates say a prohibition on hemp-derived cannabinoids would deny patients and consumers access to products that are currently available and potentially therapeutic.

Paul Armentano, deputy director of the National Organization for the Reform of Marijuana Laws (NORML), tells IgniteIt that the group and other organizations have “urged the FDA to establish regulatory guidelines governing the production, testing, labeling, and marketing of hemp-derived intoxicating cannabinoid products.”

NORML has also expressed concerns about the quality of hemp-derived cannabinoid products, many of which are synthetically produced, noting that some are inaccurately labeled and could contain heavy metals or other contaminants.

“That said, a market for these products exists largely as a result of cannabis prohibition. Consumers desire safe and affordable cannabis products. In jurisdictions where such products are not state-legal, use and demand for these unregulated alternatives is far greater than elsewhere,” Armentano added. “Lawmakers ought to recognize this reality and act in a way that provides greater expansion of and regulated access to legal cannabis markets, thereby reducing demand for these alternative products.”

David Craig, CMO of licensed MSO Illicit Gardens, said he supports the provisions of the appropriations bill that ban intoxicating hemp products.

“This is a long-overdue correction to a loophole that’s been exploited for years,” Craig wrote in a statement to IgniteIt. “The unregulated sale of synthetic and intoxicating hemp products has blurred the line between safe, tested cannabis and cheap lab-made imitations. Closing that gap protects consumers, restores integrity to the market, and ensures that cannabis is produced and sold under real oversight.”

Allison Zervopoulos, chief horticulture officer at lighting manufacturer SANLight, agrees with the proposed ban, saying that “Hemp-derived THC should be regulated in line with the rest of the cannabis industry.”

“Right now, these products are often sold in regular smoke shops with far fewer restrictions, which is a disservice to the entire industry,” Zervopoulos said in a statement to IgniteIt. “Licensed cannabis operators face high fees, strict compliance requirements, and significant taxes, while hemp THC products can be sold without those same obligations. That imbalance hurts legitimate businesses that are working hard to operate responsibly and also puts consumers at risk, since many of these products aren’t required to undergo the same rigorous testing for safety and quality.”

Jim Higdon, cofounder and chief communications officer at Kentucky-based Cornbread Hemp, says the prohibition will outlaw all of his company’s products.

“Senate leadership has sacrificed the hemp industry in a deal to reopen the government,” Higdon said in an emailed statement. “The language in the Senate agriculture appropriations package will kill the $30 billion hemp industry and the 400,000 jobs that go along with it by restricting finished packaged goods to 0.4 milligrams of THC per package, which will make even full-spectrum CBD products illegal.”

With such a low THC threshold, Higdon says the ban should not be framed as a ban on “intoxicating hemp” because it threatens products that do not cause intoxicating effects.

Evan Eneman, CEO of hemp beverage brand Iconic Tonics, urged lawmakers “to choose regulation over prohibition.”

“Prohibition doesn’t work; it drives commerce underground, jeopardizes consumer safety, and threatens the livelihoods of thousands of legitimate operators who’ve built responsible businesses in this rapidly growing category,” Eneman wrote in a statement to IgniteIt.

“The hemp beverage market is nearing $1 billion in U.S. sales, reflecting clear consumer demand for safe, functional alternatives,” Eneman continued. “We need a smart federal framework, not a ban, that enforces safety, generates tax revenue, and preserves innovation in an emerging industry that’s creating real economic opportunity.”

Companies with exposure to both hemp and regulated cannabis took a more nuanced approach to the hemp ban. Cameron Clarke, CEO of Sunderstorm, writes that as “one of the larger brands in the licensed cannabis market and also providing tested hemp products to consumers, we are definitely concerned about the lack of regulation in the hemp market.”

“Product safety is paramount. The right way to address these issues is through thoughtful debate and smart regulation — not a rushed ban that cuts off consumers from products they rely on for health and wellness and threatens the livelihoods of thousands working in this emerging industry,” Clarke told IgniteIt. “We need a federal framework that balances licensed and hemp markets and promotes safety, transparency, and innovation, rather than a punitive approach that penalizes responsible businesses and the people they serve.”

Bill Still Needs Final Approval

The appropriations bill still needs congressional approval before it can be sent to President Donald J. Trump for his consideration. In the meantime, hemp advocates are working to remove the ban on hemp products with even tiny amounts of THC and other intoxicating cannabinoids.

Sen. Rand Paul, a Kentucky Republican, has said he will introduce an emergency amendment to the legislation to remove the ban. Hemp industry advocates say they back Rand’s proposal.

“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 well-being of countless Americans who depend on hemp,” Jonathan Miller, U.S. Hemp Roundtable general counsel, said in a statement from the trade group. “We support Senator 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.”

“This week is going to be Hemp Week because Rand Paul is going to slow down this funding bill all week long,” said Higdon of Cornbread Hemp. “This is much greater than a ban on ‘intoxicating hemp products,’ unless you believe 1mg THC in a 25mg CBD gummy is intoxicating.”

Trump has said he supports the hemp THC ban, according to a White House spokesperson cited by Marijuana Moment.