Navigating the Farm Bill Sunset: A Business Perspective Before the Light Fades

By Devoy Dubuque (Member, Mountain West Consulting Services, LLC) and John Moynan (Senior Director, Scidan Consulting and Operating Partner, Capitan Consulting, LLC)

Federal cannabis policy is shifting faster in 2026 than at any point since the Controlled Substances Act of 1970 (the “CSA”). Two developments dominate: partial rescheduling (“Rescheduling”) on April 23, 2026, and the November 12, 2026 sunset of the 2018 Farm Bill’s hemp framework (the “Sunset”), with the latter casting a shadow over an entire industry. This article will discuss how business can navigate that uncertain event.A separate article will address Rescheduling.

The Sunset

The 2018 Farm Bill legalized commercial hemp – cannabis containing no more than 0.3% delta-9 THC by dry weight, creating an industry supporting approximately 320,000 jobs and $28.4 billion in activity. By capping solely delta-9 on a dry-weight basis, the statute allowed producers to convert CBD into delta-8 and sell THCA-rich flower that converts into delta-9 THC when heated (the “Loophole”), creating an unregulated market for interstate cannabis sales. The industry now at risk is based, in large part, on that Loophole economy. Section 781 — part of H.R. 5371, which ended the longest government shutdown in history — closes the Loophole effective November 12, 2026.

What Section 781 Does as the Light Fades

Section 781 applies the 0.3% threshold to total THC, including THCA; any finished product over 0.4 milligrams of total THC per container falls outside the hemp definition, and synthetic cannabinoids (delta-8, delta-10, THC-O, HHC) are excluded. Products outside the definition revert to “marijuana” under the CSA, subject to state cannabis law, the federal interstate-commerce ban, and Section 280E. Consequently, the Sunset eliminates an estimated 95% of hemp-derived cannabinoid products. Where state law permits THC above the federal threshold, a business cannot comply with both laws at once; thus, state delta-8/THC frameworks (affecting intrastate and interstate commerce) could be nullified, with litigation likely to follow. Litigation on ancillary issues has already begun.

Will the Senate Beat Sundown?

Several bills are in play—Rand Paul’s Hemp Safety Enforcement Act (state opt-out), the Wyden–Merkley Cannabinoid Safety and Regulation Act (federal regime with per-serving limits, a 21+ minimum, testing, and packaging), and the bipartisan Hemp Planting Predictability Act (two-year delay), among others — but none has cleared committee, and the House bill that passed 224–200 on April 30 left the Sunset untouched. According to Robert Hoban (“Hoban”), a prominent cannabis attorney and industry executive, “The Senate’s most likely response is delay rather than resolution. Cannabis policy has repeatedly demonstrated an ability to attract attention without generating consensus. If the Sunset issue reaches a point where economic disruption becomes politically visible, Congress may pursue a temporary extension, a narrow fix, or another short-term legislative solution rather than addressing the broader federal-state conflict.” Michael Bronstein of the American Trade Association for Cannabis and Hemp (ATACH) finds action unlikely; “any expectation of change in the law is almost exclusively the product of lobbying efforts, and a consequent narrative pushed by the parts of industry the Sunset targets.”

Who Wins and Who Loses If the Sun Goes Down

The clearest winner is the licensed cannabis industry, which lobbied to close a gap viewed as unregulated cannabis sold without age checks or testing. Nearly everyone else in the hemp-derived cannabinoid space loses as the 0.4 mg ceiling bars even non-intoxicating CBD wellness products. On November 12, absent FDA sell-through relief or legislative delay, every non-compliant product anywhere in the chain — the cultivator’s unsold biomass, the manufacturer’s finished stock and WIP, the distributor’s warehouse, the retailer’s shelf — becomes unlawful to sell overnight.

Navigating this Uncertain Environment

Due to the Sunset, businesses face deep uncertainty. Below are tactics to find a path forward—or triage, if the Sunset occurs:Pivot to the regulated market. Operators can enter state-licensed markets via licensing (facing significant regulatory costs), joint ventures (partnering with licensed operators to leverage their regulatory standing while contributing brand, product development or distribution capabilities), or acquisitions — in all instances, lobbying for enforcement as a “competitive moat”. All these strategies require strong brands, distribution relationships, and capital for a clean break; compliance costs are steep, and the payoff depends on enforcement.

Hoban predicts this won’t happen quickly: “Do not expect a dramatic enforcement wave. The federal government lacks both the political will and the practical resources necessary to dismantle dozens of established state-regulated industries.”

Cultivators can attempt the same, but only long-term (as they have already planted). Licensing is more cumbersome and this would require selling to an industry that disdains hemp. In the eyes of the cannabis industry, the Sunset is the promised reckoning. A likelier pivot is industrial hemp —textiles, hempcrete, rope, grain — which sidesteps the ban, though those markets are smaller and less lucrative, more triage than growth.

Reformulate and/or extend into non-intoxicating wellness.

Businesses can re-engineer core SKUs under the 0.4 mg ceiling, though technically demanding and the DEA has yet to define “container.” Operators with strong brand equity independent of intoxicating effect (especially functional-wellness or alcohol-alternative brands) can extend into low-dose CBD or non-cannabinoid CBD product lines within the new hemp definition. Focus on market leadership within specific state markets. States such as Minnesota and Tennessee have hemp-cannabinoid frameworks offering short-term insulation, though momentum points toward restriction. Operators can dominate a few favorable programs before federal clarity arrives, then leverage that position.Export. Export is a lifeboat, but it will not save most U.S. cultivators. Why? The economics of export of compliant hemp (≤0.3% delta-9 THC) rarely pencil out: freight, payment risk, tariffs, foreign testing, currency risk, and tight foreign THC limits (EU often 0.2%; Japan, effectively 0%) eat the margin. Domestic generally wins for CBD biomass and smokable flower; THCA flower has no lane, as most countries treat it as marijuana — and that domestic market vanishes with the Sunset. Hoban believes “Cultivators should continue evaluating diversification strategies that reduce dependence on any single regulatory framework. The operators best positioned for uncertainty will be those capable of producing compliant, standardized, export-ready biomass and finished products rather than those relying solely on local retail demand.

Last Light: The Bottom Line

The window for strategic decisions is narrow; “wait-and-see” is not a defensible strategy. The Sunset is a victory for licensed operators poised to (finally) benefit from investment into compliance, and a reckoning they deem long overdue. Businesses should choose now rather than wait for certainty that may never arrive. In a market defined by regulatory asymmetry, operators who best understand the rules and move fastest likely win. Engage counsel, model financials, and select a path. The cost of delay rises daily, and the Sunset won’t wait.This article was abbreviated for publication; a full version will appear elsewhere.