Federal lawmakers and industry advocates are debating the future of the multibillion-dollar market for hemp-derived THC products following a legislative move to close a regulatory loophole. A federal ban, which limits THC in hemp products to 0.4 milligrams per container, was recently delayed by a short-term government-funding bill signed by President Donald Trump. Originally set for November 12, the effective date for the restrictions is now December 11.
The current market grew out of the 2018 farm bill, which was championed by Sen. Mitch McConnell (R-KY) to legalize industrial hemp. That legislation defined hemp as cannabis containing less than 0.3% delta-9 THC by weight. However, this definition allowed for beverages and snacks to contain intoxicating levels of THC while remaining within the legal weight-based threshold. Late last year, McConnell inserted a provision to close this loophole into a measure that ended a government shutdown.
Industry groups, including the U.S. Hemp Roundtable, are proposing alternatives to a total ban, such as restricting sales to adults 21 and older and limiting THC content to levels higher than the 0.4-milligram cap. Alcohol retailers like Total Wine & More have joined the defense of the industry, citing cannabis seltzer sales as a supplement to declining alcohol revenue. Conversely, the regulated marijuana industry and organizations such as Smart Approaches to Marijuana support the ban, arguing that hemp products currently enjoy an advantage by avoiding the taxes and testing required for legal marijuana.
Individual business owners report significant changes as the December deadline approaches. At Drinkin’ Buds in Wisconsin, production has been halted and a co-founder has removed himself from the payroll due to the uncertainty. In North Carolina, producers like Nicholas Hohns of Deutermann Farms are considering switching to other products, such as creatine gummies, if the ban takes effect. While some advocates suggest these products could eventually transition into state-regulated marijuana markets, this would subject them to the taxes and regulatory costs currently faced by cannabis operators.
The outcome depends on whether Congress uses the current extension to pass new regulations or allows the ban to proceed. If no further legislative action is taken, the 0.4-milligram THC limit will become federal law on December 11. This would end the legal interstate shipment of most currently available hemp-derived gummies, seltzers, and smokable flowers. Some industry participants, such as Cory Harris, a lobbyist for state-legal cannabis operators, suggest that even if a federal ban is enacted, individual states like North Carolina could choose to adopt their own legal hemp programs to preserve local markets.