By: Irina Dashevsky, Esq.
The legalization of hemp in the 2018 Farm Bill created an approximately $28 billion hemp industry, which includes intoxicating hemp-derived consumables and smokable products such as beverages, gummies, and flower, that, as of late, have become ubiquitous. This has often been referred to as the “hemp loophole.” While several states passed laws and regulations in response to the “hemp loophole,” the federal government has largely been dormant on this issue. However, in late June, a key U.S. House committee approved a Fiscal Year 2026 Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Bill (the “House Agriculture Appropriations Bill”), which contained a provision prohibiting intoxicating hemp-derived products. Notably, on July 10, 2025, the U.S. Senate Appropriations Committee unanimously passed an Agriculture, Rural Development, FDA spending bill for FY 2026 (the “Senate Agriculture Appropriations Bill”) that also includes a provision, written by Sen. Mitch McConnell and Sen. Jeff Merkley, changing the definition of hemp set forth in the 2018 Farm Bill to now exclude intoxicating hemp-derived products. The hemp-related language in both bills is nearly identical. Under the Senate Agriculture Appropriations Bill, the implementation of the ban on intoxicating hemp-derived products would be stayed for one year, allowing for a wind-down period.
This is a significant development because if this proposed legislation passes (and it remains a big “if” given the logjam in Congress), it would close the “hemp loophole” created in the 2018 Farm Bill by changing the definition of hemp from the 0.3% delta-9 THC cap to a 0.3% cap based on the total THC concentration, including all THC isomers as well as THC-A. As such, products that contain more than 0.3% total of delta-9, delta-8, delta-10, and THCA would be considered illegal cannabis. Moreover, the proposed agriculture appropriations bill bans any product containing “quantifiable amounts” of THC, or any other cannabinoid with effects similar to THC. “Quantifiable amounts” is undefined. Perhaps most significantly, the bill bans any products that contain cannabinoids synthesized or manufactured outside the cannabis plant, regardless of concentration. The implications and impact of such a ban on the hemp industry are sweeping.
Sen. McConnell, who championed the 2018 Farm Bill and legalizing hemp, said the change would take the definition of hemp back to the Congressional intent and would keep hemp-related hallucinogenic substances out of the hands of children while still making it possible for farmers to grow hemp. Notably, the House Agriculture Appropriations Bill contains an express carveout for “industrial hemp,” which includes hemp grown for fiber, whole grain, oil, cake, nut, hull, microgreens, or other edible hemp leaf products, as well as hemp grown for research purposes.
The reconciled Agriculture Appropriations Bill is still a ways away from becoming law, but these developments make clear that the House and Senate’s intentions on this issue are largely aligned, and the Bill’s language changing the 0.3% cap to include all types of THC has bipartisan support. If the Bill were to pass with its current definition of “hemp,” the implications for the hemp-derived consumable/inhalable products industry would be very significant. Any product containing more than 0.3% total THC would become illegal under federal law. Similarly, any product containing THC synthesized or manufactured outside the plant, such as delta-8 or delta-10, would be federally illegal. Product segments like hemp-derived THC-infused beverages, which have gained enormous popularity with consumers over the past few years, would likely be banned from interstate commerce, and many states that have passed hemp laws and regulations based on the “hemp loophole” would likely need to reassess their position.
We will continue to track the Agriculture Appropriations Bills and any developments closely. If you’d like to discuss the impact this may have on your business, please reach out to Irina Dashevsky at Irina.Dashevsky@gmlaw.com .
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