U.S. Senate Moves to Ban Hemp-Derived THC Products by 2026

In a significant legislative move, the U.S. Senate has passed a bill that will make nearly all hemp-derived THC products illegal by late 2026. This decision was embedded within spending bills aimed at ending the prolonged government shutdown. The redefinition of "hemp" excludes a variety of intoxicating hemp products that have become widespread since the 2018 Farm Bill. The bill passed with a 60-40 vote, despite efforts by Senator Rand Paul to maintain the current status quo. Paul described the legislation as a form of "prohibition" during his speech on the Senate floor

The ban, now heading to the House of Representatives, is part of the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act. This act redefines "hemp" to include only Cannabis sativa and its derivatives with a THC concentration of no more than 0.3 percent on a dry weight basis. This change aims to close the THCA loophole, which has allowed merchants to sell THCA flower outside state-regulated marijuana channels. The THCA flower market alone is valued at hundreds of millions of dollars annually, highlighting the significant economic impact of this legislative change

Senator Rand Paul, a vocal opponent of the bill, warned that the legislation would effectively destroy the hemp industry in the U.S. "Every (hemp) plant in the country will have to be destroyed," Paul stated. The bill's passage has prompted concerns from hemp industry stakeholders, with attorney Seth Goldberg advising companies to prepare for the potential loss of safe harbor under the 2018 Farm Bill. This development could affect small businesses and major retailers alike, such as Total Wine & Spirits and Circle K, which currently sell hemp-derived products

The legislative push to redefine hemp has been gaining momentum since the summer, with support from key figures like Maryland Republican U.S. Rep. Andy Harris and Kentucky Republican Sen. Mitch McConnell. The initiative has been bolstered by a coalition of 39 state attorneys general and major alcohol industry lobbies, all advocating for the closure of the hemp loophole. The regulated marijuana industry views this as a victory, as it reduces competition from less regulated hemp products. "The regulated cannabis industry can now get back to normalizing cannabis," said Trent Woloveck, Jushi's chief strategy officer

However, the impending ban is poised to significantly impact small brewers and businesses that have incorporated hemp THC drinks into their offerings. Omar Ansari, president of Surly Brewing Co., expressed his dismay, stating, "The rug just got pulled out from under us." The move is seen as a rare federal win for large marijuana multistate operators, who have been advocating for stricter regulations on hemp-derived THC products. These operators argue that the ban will help eliminate "bad actors" exploiting the Farm Bill loophole

Hemp advocates have expressed their frustration, accusing larger industries of unfairly targeting the hemp sector. Steven Brown, CEO of Nothing But Hemp, criticized the legislative process, saying, "What happened was sneaky, and it’s not how this country was supposed to work." The hemp industry, valued at $28.4 billion and employing hundreds of thousands, now faces an uncertain future. As the bill awaits a vote in the House, the outcome will determine the fate of hemp-derived THC products across the nation

Looking ahead, the hemp industry must navigate the potential shift in the regulatory landscape. Companies are encouraged to reassess their business models and explore alternative strategies to adapt to these changes. The impending legal adjustments underscore the need for stakeholders to engage in dialogue with policymakers to advocate for balanced regulations that support industry growth while addressing public health concerns. The coming months will be crucial for industry players to strategize and mitigate the impact of this legislative shift