As part of the deal to end the recent government shutdown, Congress included a provision in the funding bill that significantly redefines “hemp” under federal law—a change that could reshape the entire landscape of hemp-derived products across the country.
If you work in the hemp or cannabis industry—or if you’re a business owner, distributor, or consumer of products like delta-8 gummies, high-THCA flower, or infused beverages—this update affects you.
Here’s what to know:
What Changed?
The new legislation effectively closes a legal gap created by the 2018 Farm Bill. That earlier law legalized hemp products with no more than 0.3% delta-9 THC by dry weight. But that definition left a window open for manufacturers to find creative ways to develop and market intoxicating compounds like delta-8, which weren’t explicitly covered.
That window is now closing.
Key changes include:
- New THC Cap: Products must now contain no more than 0.4 milligrams of total THC per container—a much stricter threshold than the previous 0.3% delta-9 THC by dry weight. This covers all THC variants (delta-8, delta-10, THCP, THCA, etc.).
- No Synthetics or Lab-Derived Cannabinoids: Cannabinoids that are synthetically produced or primarily marketed for their intoxicating effects are excluded from the federal definition of hemp.
- One-Year Transition Period: Enforcement begins November 13, 2026, giving the industry 12 months to adjust operations—or advocate for new regulations.
What Does This Mean for the Industry?
This change is seismic. Industry analysts estimate that 95% of the current $28 billion hemp-derived product market could be wiped out under the new rules. That includes popular items sold in smoke shops, wellness stores, and even convenience stores across Minnesota, Wisconsin, and nationwide.
Roughly 330,000 workers in the hemp supply chain—from growers to retailers—could be impacted.
Because the change was tucked into a must-pass appropriations bill rather than a standalone cannabis reform law, many are expecting legal challenges and requests for clarification in the months ahead.
What Should Businesses Do Now?
The one-year transition period offers an important—but limited—window to prepare. Businesses may want to:
- Review product formulations and labeling to ensure compliance under the new total-THC limit.
- Rethink distribution and retail strategies.
- Consult with legal counsel to evaluate whether any current products will fall outside the new definition of hemp.
- Engage with policymakers during this transition period to advocate for more nuanced regulations.
This is a rapidly evolving issue with complex legal, business, and consumer impacts. At Lommen Abdo, we’re closely monitoring federal and state-level responses and are here to help you navigate what comes next.
Have questions about how this law might affect your business?
Our attorneys are available to help you evaluate your options, mitigate risk, and plan for the changes ahead. Contact us today.