The U.S. hemp industry is heading into a period of deep uncertainty as federal lawmakers tighten restrictions on THC-containing products. Critics, business owners, and legal analysts all warn that the new rules could push the entire hemp sector into legal limbo, leaving farmers, manufacturers, and retailers unsure of their future. This shift, driven by efforts to close gaps in the 2018 Farm Bill, has triggered nationwide debate over what should remain legal and what crosses the line into intoxicating cannabis territory. As the industry braces for sweeping changes, many companies fear that the new landscape could force them into legal limbo for years to come.
The provision closes a loophole that allowed hemp-derived products containing THC to be sold. Even products not marketed for their THC content may face legal problems. The legislation to reopen the government also included strict new rules for hemp products that critics say threaten to outlaw mainstream drinks, creams, gummies, oils and vapes.
The provision closes a loophole in the 2018 Farm Bill that allowed hemp-derived products containing tetrahydrocannabinol, or THC to be sold.
THC is the substance that is primarily responsible for marijuana's trademark psychological effects. Hemp is a plant related to marijuana that produces THC at a much lower level. The 2018 law spawned a whole industry, with some products marketed for health reasons (often with terms like "hemp" or "CBD" in their descriptions) and others marketed as alternatives to marijuana (sometimes sold in vape shops).
The new law lowers the amount of THC allowed in hemp products. Even products not marketed for their THC content may face legal limbo. "Unfortunately, the ban will include many mainstream CBD drinks, gummies, and creams," said Dr. Jeffrey A. Singer, a senior fellow at the Cato Institute, in an email to USA TODAY.
"Only ultra-pure isolates meet the new standard, and those represent a tiny share of the market," Singer said.
Like the reconciliation bill as a whole, the hemp provision was not without critics. Sen. Rand Paul, a Kentucky Republican, said the provision was like "prohibition." Sen. Mitch McConnell, also a Republican from Kentucky, backed the language in the bill, saying he aimed to close a loophole in the 2018 law he supported at the time that inadvertently allowed products with intoxicating qualities to hit the market. He has said he hopes to protect children from intoxicating products like those marketed to look like Oreos or other child-friendly foods.
Jonathan Miller, general counsel for the U.S. Hemp Roundtable, says the new rules would ban more than 95% of all hemp-extract products – including many products that have no intoxicating effect, he said. As this plays out, industry advocates warn the entire supply chain may fall into legal limbo, creating economic and regulatory chaos.
What is hemp? How is it different from marijuana?
Hemp and marijuana are two plants from the same Cannabis genus, but marijuana contains higher amounts of Tetrahydrocannabinol, more commonly known as THC.
There are a wide range of hemp products on the market that contain THC and cannabidiol (CBD), including tinctures and oil, pills and capsules, balms, edibles and beverages. The products are used for a variety of conditions, including anxiety, joint and muscle pain, headaches, insomnia and PTSD. There are also ways to process hemp plants to achieve effects that may mimic marijuana. That has spawned a whole "marijuana-lite" or "diet weed," industry featuring terms such as Delta 8 and Delta 10.
What products will be banned?
The bill would ban any products with more than 0.4 milligrams of THC, which, according to Miller, would mean a ban of more than 95% of all hemp-extract products – including many products, he said, that have no intoxicating effect.
The ban will re-criminalize products that were made legal in the 2018 Farm Bill via a "hemp loophole," according to Singer.
"Most CBD products won’t survive unless they contain virtually no THC," Singer told USA TODAY in an email.
Looming ban sends hemp industry into limbo
The looming ban could have significant effects on communities where hemp-based consumer products have become a source of jobs and formed an entire industry with farmers growing the crop, according to reporting from the USA TODAY Network. With these changes, many companies fear falling into permanent legal limbo, unsure how to reformulate or comply.
Jim Higdon, the cofounder of Louisville-based Cornbread Hemp, is gearing up for the grand opening of a new 25,000-square foot facility, he told the Louisville Courier Journal. The 6-year-old company produces oils, topicals and gummies containing CBD and gummies and seltzers infused with trace amounts of THC derived from hemp. The facility employs about 100 people, was projected to rake in $50 million in sales in 2025 and will soon be open to the public with a retail shop and tours.
"Come see it while it's legal," Higdon joked, adding that he won't go quietly and is headed to Washington—an example of how businesses fear falling deeper into legal limbo as the rulemaking process unfolds.
Lee Van Tine II owns Apotheca Cannabis Dispensaries in Gastonia, North Carolina. He said he sells hemp products online and operates in multiple states, with over 300,000 customers.
"It takes out 98% of what we sell. We're done. Done. Bankrupt. Four hundred jobs in my company, gone," he told the Gaston Gazette.
When would the ban go into effect?
The ban will go into effect one year from the date the bill was signed: Nov. 13, 2026.
What's next?
The U.S. Hemp Roundtable, a coalition of companies and organizations "committed to safe hemp and CBD products," says it is working with legislators including Republican Rep. Morgan Griffith of Virginia and Sens. Ron Wyden and Jeff Merkley (both Oregon Democrats) to craft regulations that would address concerns over high or irregular THC content, synthetic ingredients, copycat products and marketing or packaging meant to appeal to minors. Until then, businesses anticipate navigating continued legal limbo as the future of hemp-derived products remains uncertain.