The recent reopening of the federal government has significant implications for the hemp industry, valued at $28 billion. An amendment in the new federal spending bill threatens to disrupt a burgeoning market for hemp-derived THC products, including beverages popular at retail chains like Target and Total Wine.
Government Action and Its Impact
On Wednesday night, President Donald Trump signed a crucial funding bill marking the end of the longest federal government shutdown in U.S. history. However, this legislation includes an amendment that many in the hemp sector view as a severe threat. The amendment effectively bans most hemp-derived THC products, jeopardizing an industry that has thrived since the 2018 Farm Bill legalized hemp and its derivatives.
- Amendment Highlights:
- Redefines hemp, closing the current loophole.
- Bans the production of synthetic cannabinoids.
- Prohibits all hemp products containing more than 0.4 milligrams of THC per package.
- Current Market Scenario:
- THC-infused beverages generate approximately $1 billion annually in the U.S.
- Many products on the market contain 5 to 1,000 milligrams of THC.
Industry Stakeholders React
Jim Higdon, co-founder of Kentucky-based Cornbread Hemp, expressed grave concerns: “This is an extinction-level event for the CBD products industry.” Higdon fears that current products will be classified as Schedule I narcotics if the amendment is enforced next year.
As the amendment narrows the definition of hemp, it inadvertently broadens the classification of marijuana. This change could drastically affect businesses that rely on hemp-derived THC products.
Lobbying Efforts for Change
Industry leaders are not taking this situation lightly. Higdon plans to advocate for legislation that favors hemp products, hoping to work with influential lawmakers, including Brett Guthrie, Chairman of the House Energy and Commerce Committee.
The irony of Senator Mitch McConnell—who authored the 2018 Farm Bill—supporting the ban has not gone unnoticed. In recent statements, McConnell cautioned against the rise of unregulated THC products, emphasizing public safety concerns following a spike in poison control calls related to cannabis.
Opportunities Amid Challenges
Despite the challenges, some industry figures maintain a hopeful outlook. Thomas Winstanley of Edibles.com views this period as an opportunity for regulation rather than outright ban. As companies scramble to adapt, there’s a consensus on needing common-sense regulations.
Companies like Curaleaf, which has diversified into hemp, are less impacted compared to businesses heavily reliant on hemp products. CEO Boris Jordan noted that less than $5 million of Curaleaf’s revenue comes from hemp sales, indicating minimal disruption at this scale.
As lawmakers navigate the changing landscape, stakeholders are determined to lobby for policies that protect the industry while ensuring product safety. With a year-long grace period before the amendment officially takes effect, the hemp industry hopes to rally support and forge new paths forward.
