In a commercial kitchen outside Raleigh, North Carolina, Nicholas Hohns produces THC gummies, a product that may soon be affected by new federal regulations. The U.S. market for hemp products containing THC, which includes items like THC seltzers and smokable cannabis flowers, is facing potential restrictions after Congress voted to close a loophole in federal law that has allowed these products to thrive. A short-term government funding bill signed by President Donald Trump last month postponed the effective date of the proposed 'hemp THC ban' from November 12 to December 11, allowing Congress additional time to consider regulation options.
Hohns expressed concern about the future of his business, stating, "You worked 100 hours a week for the past four years, and, yeah, you made some money. But now you might have nothing to show for it." The 2018 farm bill, which legalized industrial hemp, defined hemp as containing less than 0.3% delta-9 THC by weight, leading to a loophole that allowed products with higher THC levels to be marketed as hemp.
As a result, unregulated products containing hemp-derived THC have proliferated in convenience stores and gas stations, sometimes accessible to minors. In response, many states have begun regulating or banning these products. Last year, Senator Mitch McConnell closed the loophole by introducing a hemp THC ban, which limits THC content in hemp products to 0.4 milligrams per container.
According to a report from Whitney Economics, the ban could reduce retail revenues by $28.3 billion, displace 225,000 jobs, and decrease state sales tax revenue by $2.1 billion. The industry is proposing measures to restrict THC products to individuals aged 21 and older and limit THC content in packages to mitigate the impact of the ban.
Eric Zipperle and Jim Higdon, owners of Cornbread Hemp in Kentucky, stated that a 0.4-milligram limit would jeopardize their business, which employs 105 people and is expected to generate $65 million in revenue this year. Jonathan Miller, general counsel of the U.S. Hemp Roundtable, noted that the proposed cap could also ban non-impairing CBD products.
Hohns entered the hemp industry after losing his job during the COVID-19 pandemic and has expressed concerns about the sustainability of his business under the new regulations. Meanwhile, Drinkin' Buds, a cannabis beverage company in Wisconsin, has halted production due to uncertainty in the market.
Supporters of the hemp industry, including alcohol retailers, argue that cannabis seltzers have helped offset declining alcohol sales. However, opponents, including Kevin Sabet, CEO of Smart Approaches to Marijuana, express concerns about the safety of these products. The regulated marijuana industry also supports the ban, viewing hemp THC as unfair competition. Lobbyist Cory Harris suggested that while the ban would end interstate sales, some products could still be sold in legal in-state markets, and states could establish legal hemp programs.
Associated Press reporters Allen G. Breed and Dylan Lovan contributed to this report.