Impact of the Recently Signed Agricultural Appropriations Bill on the Hemp Industry

What does this mean for the hemp industry? The new Federal legislation removes intoxicating hemp from the legal definition of hemp, which was included in the 2018 Farm Bill, effectively creating a ban. Currently, the Farm Bill defines hemp as any cannabis product with a combined THC level of 0.3% or less.

This prevents the unregulated sale of intoxicating hemp-based or hemp-derived products, including Delta-8, from being sold, while preserving non-intoxicating CBD, CBG and CBN hemp products.

Synthetic hemp-derived cannabinoid products have been removed from the definition of Hemp and are limited to no more than 0.4mg combined total THC per container. For example, a beverage containing 5mg hemp-derived THC, or even 2mg would be a controlled substance under the new definition. Hemp-derived cannabinoids will be most impacted in the area of full and broad spectrum products which contain multiple cannabinoids and in many cases THC.

The impact this will have across the industry is substantial; however, there are a number of options for the businesses that produce these products today. For businesses in states with legal adult-use cannabis programs, the most obvious option is to reformulate their products to meet the new federal THC levels. They also have the option to sell their companies to those that have existing marijuana licensing in place or apply for an available state license themselves (if available). Once the ban is in place they will be prevented from selling their products online and shipping anywhere in the US.

Companies that produce synthetic THC products, and have been avoiding regulation by working within the existing definition of hemp, will have the greatest challenge as the legality of their synthetic products would go away in states without legal marijuana programs.

The changes would not take effect until 12 months after the signing of the new legislation on November 12, 2026. Within 90 days, the Food and Drug Administration is required to publish a list of all naturally-occuring cannabinoids and tetrahydrocannabinoids produced by the Cannabis sativa L. plant and all that produce or are marketed to produce similar effects.

The industry, in particular the U.S. Hemp Round Table, is already laying the groundwork for a regulatory program, as opposed to complete prohibition and they feel confident that those regulations can be put into play before the ban is put in place, effectively negating the ban.

The exception to the 12 month timeframe would be states who enact their own laws, essentially mirroring the federal changes. Those could be put into place within just a few months.

Green Check is following this issue closely and will continue to provide updates.

Wondering what to do if you are banking these businesses today? We are holding a webinar on December 17th on legislative updates, and this issue is likely to be a hot topic during that session.