Introduction to the Hemp Industry Crisis
The production lines at Indeed Brewing moved quickly, the cans filling not with beer, but with THC-infused seltzer. The product, which features the compound that gets cannabis users high, has been a lifeline at Indeed and other craft breweries as alcohol sales have fallen in recent years. But that boom looks set to come to a crashing halt. Buried in the bill that ended the federal government shutdown this month was a provision to ban those drinks, along with other impairing beverages and snacks made from hemp, which have proliferated across the country in recent years. Now the $24 billion hemp industry is scrambling to save itself before the provision takes effect in November 2026.
The Looming Ban on Impairing Products Derived from Hemp
“It’s a big deal," said Ryan Bandy, Indeed’s chief business officer. "It would be a mess for our breweries, for our industry, and obviously for a lot of people who like these things.” The ban on impairing products derived from hemp has sent shockwaves throughout the industry, with many businesses and individuals unsure of what the future holds.
Congress Opened the Door in 2018
Marijuana and hemp are the same species. Marijuana is cultivated for high levels of THC in its flowers. Low-THC hemp is grown for its sturdy fibers, food, or wellness products. “Rope, not dope” was long the motto of farmers who supported legalizing hemp. After states began legalizing marijuana for adult use over a decade ago, hemp advocates saw an opening at the federal level. As part of the 2018 farm bill, Congress legalized the cultivation of industrial hemp to give farmers, including in Republican Sen. Mitch McConnell’s home state of Kentucky, a new cash crop.
The Loophole in the Law
But the way that law defined hemp — as having less than 0.3% of a specific type of THC, called delta-9 — opened a huge loophole. Beverages or bags of snacks could meet that threshold and still contain more than enough THC to get people high. Businesses could further exploit the law by extracting a non-impairing compound, called CBD, and chemically changing it into other types of impairing THC, such as delta-8 or delta-10. The result? Vape oil, gummy candies, chips, cookies, sodas, and other unregulated, untested products laden with hemp-derived THC spread around the country.
A Patchwork of State Regulations
Dozens of states have since taken steps to regulate or ban impairing hemp products. In October, Democratic California Gov. Gavin Newsom signed a bill banning the sale of intoxicating hemp products outside the state’s legal marijuana system. Texas, which has a massive hemp market, is moving to regulate sales of impairing hemp, such as by restricting them to those over 21. In Nebraska, lawmakers have instead considered a bill to criminalize the sale and possession of products containing hemp-based THC.
The Impact on the Industry
The ban would jeopardize more than 300,000 jobs while costing states $1.5 billion in lost tax money, according to the U.S. Hemp Roundtable. Drew Hurst, president and chief operating officer at Bauhaus Brew Labs, has no doubt his company would be among the casualties. “If this goes through as written currently, I don’t see a way at all that Bauhaus could stay in business," Hurst said.
A Powerful Senator Moves to Close the Loophole
None of that was what McConnell intended when he helped craft the 2018 farm bill. He finally closed the loophole by inserting a federal hemp THC ban in the measure to end the 43-day federal government shutdown, approved by the Senate on Nov. 10. “It will keep these dangerous products out of the hands of children, while preserving the hemp industry for farmers,” McConnell said. “Industrial hemp and CBD will remain legal for industrial applications.”
What Comes Next?
A number of lawmakers say they will push for regulation of the hemp THC industry. Kentucky’s second senator, Republican Rand Paul, introduced an amendment to strip McConnell’s hemp language from the crucial government-funding bill, but it failed on a lopsided 76-24 vote. Minnesota’s Democratic U.S. senators, Amy Klobuchar and Tina Smith, are among those strategizing to save the industry.
Conclusion
The hemp industry is facing a crisis with the looming ban on impairing products derived from hemp. The ban has sent shockwaves throughout the industry, with many businesses and individuals unsure of what the future holds. While some lawmakers are pushing for regulation of the hemp THC industry, others are celebrating the ban as a way to end unfair competition. The fate of the industry remains uncertain, and it is unclear what the future holds for the thousands of jobs and billions of dollars at stake.
FAQs
Q: What is the current state of the hemp industry?
A: The hemp industry is facing a crisis with the looming ban on impairing products derived from hemp.
Q: What is the ban on impairing products derived from hemp?
A: The ban is a provision that was inserted into the bill that ended the federal government shutdown, which prohibits the sale of impairing beverages and snacks made from hemp.
Q: When does the ban take effect?
A: The ban takes effect in November 2026.
Q: How will the ban affect the industry?
A: The ban will jeopardize more than 300,000 jobs and cost states $1.5 billion in lost tax money.
Q: What are lawmakers doing to address the issue?
A: Some lawmakers are pushing for regulation of the hemp THC industry, while others are celebrating the ban as a way to end unfair competition.
Q: What is the future of the hemp industry?
A: The fate of the industry remains uncertain, and it is unclear what the future holds for the thousands of jobs and billions of dollars at stake.
