The federal government is sending some very mixed signals on cannabis—and if you’re in Minnesota’s THC market, it’s a moment that demands your full attention.
On one side, there’s momentum toward reclassifying marijuana under federal law, a move that could benefit cannabis businesses nationwide. On the other, Congress is considering legislation that could severely restrict hemp-derived THC products—including many that are currently legal and state-regulated.
For Minnesota businesses and consumers alike, these two shifts represent both opportunity and risk. Here’s what you need to know.
Marijuana Rescheduling: A Step Toward Legitimacy
The Trump administration has taken formal steps to reschedule marijuana from Schedule I to Schedule III under the Controlled Substances Act. If finalized, this would mark the most significant change in federal cannabis policy in over 50 years.
Let’s break it down:
- Schedule I substances (where marijuana currently sits) are defined as having no accepted medical use and a high potential for abuse—alongside heroin and LSD.
- Schedule III substances, like Tylenol with codeine, are recognized as having legitimate medical uses and a lower potential for abuse.
Why it matters:
- Tax relief: Cannabis businesses could finally be exempt from IRS Code §280E, which currently prevents them from deducting basic expenses like rent, payroll, and marketing.
- Improved access to banking and investment: Rescheduling could ease financial restrictions and allow cannabis companies to work more easily with banks and lenders.
- Expanded medical research: Moving to Schedule III would eliminate many of the barriers to clinical studies on cannabis’s therapeutic benefits.
While this doesn’t legalize marijuana federally, it is a meaningful shift—especially for newer or smaller businesses that struggle under current financial and regulatory burdens.
Hemp-Derived THC: The Door May Be Closing
While marijuana is moving toward wider acceptance, hemp-derived THC products may be heading in the opposite direction.
Here’s the context: the 2018 Farm Bill legalized hemp by defining it as cannabis with no more than 0.3% delta-9 THC by dry weight. That technicality opened a loophole, allowing producers to create intoxicating products from legal hemp—like delta-9 THC gummies and beverages—so long as they met that threshold.
In the years since, those products have become widely available, often outside the traditional dispensary system.
Now, Congress is weighing new legislation that would:
- Cap total THC per container, not just per gram.
- Effectively ban most hemp-derived THC products, even those that are compliant and state-regulated.
This isn’t just about tightening oversight. It’s a clear move to eliminate most intoxicating hemp products from the market entirely.
Minnesota’s Unique Position: Legal, Regulated—and at Risk
Minnesota stands out as one of the few states to proactively regulate hemp-derived THC products. In 2022, the state legalized low-dose edibles and beverages with:
- Defined potency limits
- Age restrictions
- Product testing and labeling requirements
This framework has allowed a thriving low-dose THC market to develop ahead of Minnesota’s rollout of full adult-use cannabis licensing. For many small businesses, it’s been a much-needed on-ramp to the broader cannabis economy.
But if Congress passes federal restrictions, Minnesota’s entire hemp-derived THC market could be overridden—despite its compliance-focused approach.
With full cannabis licensing still in development, a federal crackdown on hemp could leave a regulatory gap, putting both entrepreneurs and consumers in limbo.
The legislation under consideration wouldn’t take effect until late 2025, giving states and businesses some time to adapt—but the clock is ticking.
The Federal Cannabis Policy Paradox
Here’s the contradiction at the heart of all this:
- Marijuana—chemically identical to hemp-derived THC—is moving toward medical legitimacy and reduced restrictions.
- Hemp-derived THC, which is already regulated in many states, is being targeted for federal prohibition.
Same active compound. Different source. Vastly different treatment under federal law.
This disparity points to a much larger issue: federal cannabis policy lacks a unified, science-based framework for regulating THC. Instead, we have a patchwork of rules based on where the THC comes from—not what it does, or how it’s used.
What’s Next: A Pivotal Year for THC Regulation
The next 12 months will be critical in shaping the future of THC policy at both the state and federal levels. We’re watching several key developments:
- Will marijuana officially be moved to Schedule III?
- Will Congress impose strict federal limits on hemp-derived THC?
- How will states like Minnesota respond?
For anyone operating—or planning to enter—the cannabis or hemp space in Minnesota, now is the time to assess your legal position and prepare for change.
Final Thoughts: Be Proactive, Not Reactive
Whether you’re manufacturing hemp-derived beverages, opening a dispensary, or simply trying to stay compliant, this much is clear: we’re in a moment of rapid transition, not stability.
At Lommen Abdo, we help businesses navigate this ever-changing regulatory landscape with clarity and confidence. If you need guidance on how evolving THC laws could affect your operations—or if you want to plan ahead—we’re here to help.
Let’s talk before the rules change again. Contact us today to schedule a consultation.