By Timothy S. Donahue

Top Takeaways:

• New federal spending bill would criminalize most hemp-derived THC products nationwide within 12 months.
• The change threatens tens of thousands of businesses across the $28.3B U.S. hemp sector.
• Advocates warn that CBD and other hemp products could become Schedule I drugs without fast legislative action.

The federal government is set to reopen after the House of Representatives approved a broad spending package late Wednesday, and the President later signed the bill. However, the bill also includes language that would ban nearly all hemp-derived THC products in the United States, a move industry advocates say could disrupt the country’s $28.3 billion hemp industry.

The House vote concludes months of efforts by Republican lawmakers to close what they call the “hemp loophole” created by the 2018 Farm Bill, which legalized hemp but accidentally fueled the nationwide rise in intoxicating hemp-derived products like delta-8, THCA flower, and synthetic cannabinoids.

Rep. Andy Harris, the Republican from Maryland who authored the ban, said the bill “closes the hemp loophole that has resulted in the spread of unregulated intoxicating hemp-derived products that are being sold online and in gas stations and corner stores across the country.”

Only two Republicans — Kentucky Rep. Thomas Massie and Florida Rep. Greg Steube — joined most Democrats in opposing the bill. Massie condemned the process, saying, “I detest the tactics that are being used to try to get this ban enacted into law.”

The ban would take effect 365 days after President Donald Trump signs the measure, which happened shortly after Congress passed the bill. If enacted as written, the law would redefine hemp to include only cannabis plants and derivatives containing no more than 0.3% total THC, including THCA.

It would also exclude cannabinoids that are “not capable of being naturally produced” by the plant or that are “synthesized or manufactured outside the plant,” covering compounds such as HHC and THC-P.

The change would remove the national marketplace for THCA flower — valued at hundreds of millions of dollars — and leave tens of thousands of hemp businesses without a clear way forward, including those in states like Kentucky that already have hemp-THC regulations.

The impact would also extend to marijuana multistate operators, such as Curaleaf Holdings, which sells hemp-derived products, and mainstream retailers like Circle K and Total Wine & Spirits that carry hemp-based beverages.

Industry disruption has already started. Some companies are dealing with canceled orders, although many continue to work on their 2026 business plans while seeking clarity. For others, the warning signals are flashing.

“We have 365 days until all hemp products — including CBD oils — become Schedule 1 narcotics,” said Jim Higdon, co-founder of Kentucky-based Cornbread Hemp. “To stop this insane outcome, we must pass a bill through the House Energy & Commerce Committee immediately.”

Higdon said growers need certainty to plan for next season. Without a legislative compromise, he warned, “all hope for a future of rational cannabis laws in the country will vanish.”

Supporters of the ban argue it is necessary to fight an unregulated marketplace. “The intoxicating hemp marketplace is full of bad actors selling synthetic drugs and cannabis while pretending to be hemp, often without proper age restrictions,” said Chris Lindsey, vice president of policy and state advocacy at the American Trade Association for Cannabis and Hemp. He said under the new definition, “intoxicating hemp products would be legally equivalent to cannabis.”

Meanwhile, efforts to remove the ban from the bill failed in the Senate earlier this week when Sen. Rand Paul’s amendment was defeated — after eight Democrats crossed the aisle to support the Republican-sponsored funding bill.

It remains unclear how aggressively federal agencies will enforce the new prohibition; although state-regulated cannabis programs are also illegal under federal law, they have not experienced widespread crackdowns. Nevertheless, hemp-derived THC products would become Schedule I drugs and face strict penalties and federal tax burdens under Internal Revenue Code 280E.

Renowned cannabis attorney Rod Kight stated that the change will have uneven impacts across the country. “This will create some opportunities in hemp-friendly states while also sowing chaos and lots of legal ‘grey’ areas,” he said. But overall, he warned, the move will “exacerbate the problems that the marijuana industry is currently facing,” including taxation, banking, interstate commerce, and access to capital.