Since the enactment of the Agriculture Improvement Act of 2018 (Pub. L. No. 115-334) (the “2018 Farm Bill”), a substantial commercial market has developed around hemp-derived cannabinoid-containing products (including edibles, beverages, vaporizer cartridges, and tinctures) sold through retail, e-commerce, and convenience channels nationwide. These products proliferated under a statutory definition of “hemp” that included “all derivatives, extracts, cannabinoids [and] isomers” of Cannabis sativa L. with delta-9 tetrahydrocannabinol (“delta-9 THC”) concentration of not more than 0.3% on a dry weight basis. This definition unintentionally made lawful certain psychoactive cannabinoids so long as they were derived from hemp. By 2025, the intoxicating hemp sector was valued at approximately $28.4 billion, supported an estimated 300,000 jobs, and generated roughly $1.5 billion in state tax revenue. That rapid expansion, however, was built on a statutory definition now facing significant federal reconsideration.
On November 12, 2025, President Trump signed the Continuing Appropriations, Agriculture, Legislative Branch, Military Construction and Veterans Affairs, and Extensions Act, 2026 (Pub. L. No. 119-37) (the “Act”). Section 781 of Division B of the Act materially amends the statutory definition of hemp under 7 U.S.C. §1639o and, absent intervening legislation, will render the vast majority of hemp-derived cannabinoid products currently on the market federally unlawful as of November 12, 2026.
Substantive Amendments to the Definition of Hemp
Section 781 effectuates three principal changes to existing law. First, the amended definition replaces the prior delta-9 threshold with a “total THC” standard. Hemp is now defined as Cannabis sativa L. with a total THC concentration (inclusive of tetrahydrocannabinolic acid (“THCA”) and delta-8 THC) of not more than 0.3% on a dry weight basis. Second, the Act imposes a ceiling of 0.4 milligrams of total THC per container for finished hemp-derived cannabinoid products. For reference, products currently available on the market typically contain between 2.5 and 10 milligrams of delta-9 THC per unit, substantially exceeding this threshold. Third, the Act expressly prohibits products containing cannabinoids that are synthesized or manufactured outside the plant (e.g., delta-8 THC derived through CBD isomerization) or that are not capable of being naturally produced by the cannabis plant (e.g., hexahydrocannabinol (HHC)).
The Act preserves a carve-out for “industrial hemp” cultivated for fiber, grain, oil, seeds, microgreens, and research. However, industry stakeholders have noted that the 0.4-milligram-per-container limitation is sufficiently restrictive that an estimated 90% or more of non-intoxicating “full spectrum” CBD products would also fall outside the amended definition. The Act further directs the Food and Drug Administration (FDA) to publish, within 90 days of enactment, a list of naturally occurring cannabinoids, THC-class cannabinoids, and cannabinoids with pharmacologically similar effects, as well as a regulatory definition of “container.” These determinations will materially affect the scope of the revised framework. Enforcement is deferred for 365 days; as of the effective date, non-compliant products will be classified as marijuana under the Controlled Substances Act (CSA) and subject to attendant civil and criminal consequences.
Legislative History and Procedural Context
The hemp provisions were advanced principally by Representative Andy Harris (R-MD), Chairman of the House Appropriations Subcommittee on Agriculture, and supported by Senator Mitch McConnell (R-KY), who, despite having championed hemp’s legalization under the 2018 Farm Bill, subsequently characterized the intoxicating hemp market as the product of an “exploited” statutory loophole. A coalition of 39 state attorneys general submitted a letter urging Congress to close the gap, asserting that state-level regulation of intoxicating hemp products was impracticable given the realities of interstate commerce. Substantially similar legislative language had been considered and rejected during the 118th Congress and during the initial FY2026 appropriations process. The provision’s inclusion in the government-reopening package, a must-pass vehicle, foreclosed standalone debate. Senator Rand Paul (R-KY) moved to strike the hemp language by emergency amendment; the motion was tabled by a vote of 76–24. In the House, Representatives Thomas Massie (R-KY) and Greg Steube (R-FL) were the only Republican members to vote against final passage, with Representative Massie citing Section 781 as his basis.
Anticipated Market and Economic Impact
The U.S. Hemp Roundtable has estimated that the amended definition would eliminate approximately 95% of existing hemp-derived cannabinoid products, with corresponding losses of over 300,000 jobs and $1.5 billion in aggregate state tax revenue. The consequences extend beyond manufacturers of intoxicating products: the 0.4-milligram threshold implicates a broad range of non-intoxicating wellness products, including CBD formulations marketed for analgesic, anxiolytic, and sleep-related applications. Agricultural producers who transitioned from commodity crops to high-value cannabinoid hemp cultivation (many of whom had already committed capital for the 2026 planting season at the time of enactment) face the prospect of harvesting a crop that may constitute a Schedule I controlled substance before it can be brought to market. Although the enforcement date does not arrive until late 2026, the amended law is already producing material disruption to capital formation, supply chain agreements, product development pipelines, and insurer willingness to underwrite hemp-related operations.
Pending Legislative Responses
Repeal. Representative Nancy Mace (R-SC) introduced the American Hemp Protection Act of 2025 (H.R. 6209) on November 17, 2025. The bill would strike Section 781 in its entirety, restoring the 2018 Farm Bill definition. Co-sponsored by Representatives Massie, Lofgren (D-CA), and Baird (R-IN), the legislation has drawn criticism from certain industry participants on the ground that it proposes no regulatory framework to replace the repealed provision.
Delay. The Hemp Planting Predictability Act (H.R. 7024), introduced January 13, 2026, by Representative Baird (R-IN) with bipartisan co-sponsors including Representatives Comer (R-KY) and Craig (D-MN), would amend the implementation language of Section 781 by replacing “365 days” with “3 years,” thereby deferring the effective date to November 12, 2028. A Senate companion was introduced by Senators Klobuchar (D-MN), Paul (R-KY), and Merkley (D-OR). The bill currently has 15 co-sponsors in the House. Notably, the delay does not alter the substance of the amended definition; it is intended to provide a transitional period during which Congress may develop a permanent regulatory framework through the Farm Bill reauthorization or standalone legislation.
Comprehensive Regulation. Senators Wyden (D-OR) and Merkley (D-OR) introduced the Cannabinoid Safety and Regulation Act (CSRA) in December 2025. The 84-page bill would replace the Section 781 prohibition with a federal regulatory framework establishing THC limits of 5 milligrams per serving and 50 milligrams per container for edibles (10 milligrams per container for beverages), a federal minimum purchase age of 21, mandatory third-party testing, standardized packaging and labeling requirements, and restrictions on pesticides, heavy metals, and chemical byproducts. The CSRA expressly preserves state authority to impose regulations exceeding the federal baseline, including outright prohibitions and state-specific tax structures.
Farm Bill Reauthorization. House Agriculture Committee Chairman Glenn Thompson (R-PA) filed an 802-page draft of the Farm, Food, and National Security Act of 2026 in February 2026. While the draft addresses regulatory relief for industrial hemp producers, it does not directly engage the consumable product ban. Chairman Thompson has taken the position that regulation of finished goods falls outside the Agriculture Committee’s jurisdiction, though the bipartisan composition of the Hemp Planting Predictability Act’s co-sponsor list, which includes members of the Committee, may make the issue difficult to avoid during markup.
State-Level Developments
The federal redefinition is precipitating divergent state responses. Ohio enacted Senate Bill 56 in December 2025, imposing a categorical ban on intoxicating hemp products. A coalition operating as Ohioans for Cannabis Choice has initiated a signature-collection effort to place a repeal referendum on the November 2026 ballot, requiring 250,000 signatures by mid-March. New Jersey has advanced legislation requiring the liquidation of non-compliant inventory on an accelerated timeline and, following November 2026, channeling THC beverages into the state’s licensed cannabis regulatory framework. Conversely, Minnesota’s existing regulatory model (which incorporates licensing, age-gating, labeling standards, and per-serving THC limits) has been cited by federal legislators as evidence that state-level regulation can address public safety concerns without resort to blanket prohibition.
Outlook and Considerations
Several variables will determine the practical effect of the amended definition. The FDA’s forthcoming administrative determinations regarding cannabinoid classification and the definition of “container” will shape the ban’s operative scope. The enforceability of the new prohibitions remains an open question, given the resource constraints facing both the FDA and the Drug Enforcement Administration (DEA), and the federal government’s established practice of deferring to state regulatory frameworks in the analogous context of state-legal cannabis programs. Additionally, President Trump’s December 2025 executive order directing the Attorney General to expedite the rescheduling of cannabis from Schedule I to Schedule III introduces a further layer of regulatory uncertainty, as any reclassification of cannabis under the CSA would extend to hemp-derived products that are deemed to fall within the cannabis definition.
Affected stakeholders should not treat the 365-day implementation period as a basis for inaction. Prudent practice requires immediate assessment of product-line compliance against the amended thresholds, evaluation of contractual change-of-law provisions, financial modeling of revenue impacts, and development of contingency plans addressing reformulation, operational restructuring, or market exit. The attorneys at Frier Levitt advise manufacturers, distributors, retailers, investors, and stakeholders navigating rapidly evolving hemp-derived cannabinoid regulation. Our attorneys assist with compliance strategy, product classification, enforcement risk assessment, contract restructuring, and engagement with regulators as the federal and state framework continues to take shape. Early planning will be critical to preserving market access and mitigating regulatory exposure.
Mr. Asebey and Mr. Ferrari are the authors of Legal Guide to the Business of Cannabis and Hemp (PLI Press, 2025).
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