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Hemp sector at risk as last minute shutdown bill adds language targeting intoxicating products
The bill passed by the United States Senate to reopen the federal government includes language that could effectively shut down the country’s current hemp sector. Buried in the 141-page funding package is a provision that would ban the sale of unregulated intoxicating hemp-derived products, including delta-8 THC, and would change the definition of hemp in a way that would make most existing products illegal.
The word came a day before the vote, after pressure from states and parts of the marijuana industry. Hemp operators have long argued that resistance to hemp has a lot to do with safety and market protection, noting that calls for restrictions are most organized where marijuana is legal.
According to the US Hemp Bureau, “If passed, this legislation would wipe out 95% of the industry, shut down small businesses, and shut down America’s farms at a cost of $1.5 billion in lost tax revenue to states.”
Under language now attached to the funding bill, any hemp-derived product would have to meet strict limits for human or animal consumption. It could not contain more than 0.3 percent total THC and no more than 0.4 milligrams total THC in the entire package. Cannabinoids should be naturally occurring in the plant. Compounds produced by chemical conversion or other manufacturing methods would be prohibited. In practice, this would remove most intoxicating hemp products from gas stations, online stores, and corner stores across the country.
Supporters say the measure would close a loophole that has allowed intoxicating hemp products to spread without oversight. Opponents say it would stifle the hemp economy by leaving CBD and industrial hemp uses alone.
The conflict came to a head in Kentucky, where the two state senators found themselves on opposite sides. Senator Rand Paul warned that the language would kill an entire industry and hurt farmers and small businesses. He summarized the bill, Sharing in X that the provision has nothing to do with reopening the government and would hurt Kentucky agriculture.
The voices of the industry line up behind this vision. Tilray Brands stated: “As a leader in the hemp industry, Tilray Brands strongly supports forward-thinking smart regulation, not bans that stifle innovation, threaten small businesses and reduce consumer choices. The hemp language buried in the government’s funding bill is misguided, misguided in consumer interests, and misplaced in law.
The company added that responsible operators already comply with state regulations and called on Congress to work with the industry instead of passing restrictions that would eliminate an entire product category.
© Tilray Marks
Others are putting data on the table. “The data shows that adults are using hemp beverages responsibly to relax, reduce alcohol consumption and feel better without high levels of intoxication,” said Kevin Provost, CEO of MoreBetter. Chief Operating Officer Tyler Dautrich added, “This is not a legalization debate, this is a data-driven public health issue.
“Our industry is being used as a pawn by leaders as they work to reopen the government. Recriminalizing hemp will force American farms and businesses to close and disrupt the well-being of countless Americans who depend on hemp,” said Jonathan Miller, General Counsel of the U.S. Hemp Roundtable.
The hemp-derived beverage segment alone represents $1 billion in annual sales, largely driven by small businesses and supporting farmers, processors and retailers. A recent national poll shows that more than 70 percent of Americans want hemp products to be legal and available.
The Senate passed the bill 60 to 40. The House has yet to vote. The stakes are clear. If the language doesn’t change, the government could reopen the market for hemp-cannabinoids while they disappear.
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“Senator Klobuchar voted against the hemp provision because he believed it would hurt the state’s small businesses.”
Minnesota has a growing industry of intoxicating hemp products, including soft drinks and gummies. A product ban making its way through Congress in a bill that would reopen the federal government.
The bill gives the industry 365 days before all products containing more than 0.4 milligrams of THC (a trace) are outlawed. Christopher Lackner, president of the Hemp Beverages Alliance, hopes to give the industry time to push back against the provision, which he called “arbitrary” and “punitive.”
He said he’s betting on “the pushback from consumers, suppliers and distributors and everyone else in the supply chain” that a ban on THC-infused products made from hemp will cause.
“Our hope as an industry is that Congress will come back and meet with all the stakeholders and build a federal hemp beverage framework that worksLackner said.
The 2018 Farm Bill legalized hemp, removing it from the federal definition of marijuana under the Controlled Substances Act and treating it as an agricultural commodity. It also opened the doors to the production of “modifying” products derived from hemp.
Minnesota led the nation in harnessing the redefinition of hemp. Whitney Economics’ Latest report on THC beverages It estimated total US THC beverage sales to exceed $1.1 billion in 2024, and Minnesota was a key state in that growth.
Success has come at a price, however. Competing industries, mostly the nation’s nascent legal marijuana industry and, more recently, the beer and spirits industries, furiously lobbied to shut down what they saw as “the loophole”. in the 2018 Farm Bill that has led to an explosion of hemp-infused products.
The marijuana and alcohol industries say hemp products are largely unregulated and some contain dangerous amounts of THC. They also say there are no labeling and marketing restrictions or efforts to keep THC-infused drinks and edibles away from children.
On Monday, the Beer Institute, the Distilled Spirits Council of the United States and other alcohol trade groups He sent a lobbying letter to members of CongressSen. Rand Paul, R-Ky., urging the rejection of an amendment that would have removed the bill’s blackout language.
“Producers of alcoholic beverages, one of the top consumer products, are asking the Senate to reject Paul’s attempts to allow hemp-derived THC products to be sold across the country without federal regulation and oversight,” the letter said.
Their argument won the day.
The legislation that would have ended the shutdown includes three appropriations bills in fiscal year 2026 to fund various government agencies, including the U.S. Department of Agriculture, where the hemp provision was inserted. All other federal agencies would receive short-term funding — through the end of January — under a continuing resolution, or CR.
While the hemp industry lost the lobbying battle, it gained supporters in the US Capitol. Paul, for example, blocked Senate GOP leaders from getting unanimous approval to fast-track the shutdown bill, which overcame a six-week Democratic gridlock on a 60-40 vote Sunday afternoon.
The US Senate voted to table—or reject—the Paul amendment, 76-24. Senators Amy Klobuchar (D) and Tina Smith (D) of Minnesota were in the minority in support of the effort to remove the hemp language.
“Senator Klobuchar voted against the hemp provision because he believed it would harm the state’s small businesses and because Congress’ efforts to regulate hemp products should take into account states like Minnesota that already have strong regulations,” a Klobuchar spokesperson said.
Lackner also said lawmakers in Congress were trampling on states’ rights to regulate intoxicating hemp products.
“This is a slap in the face to states like Minnesota that have developed regulatory frameworks based on stakeholder input,” he said.
The hemp switch is wrong from every angle‘
Steve Brown, CEO of Nothing but Hemp, a Northeast Minneapolis-based company that makes THC-infused gummies and drinks, brewery emulsions and a variety of other hemp-based products, said the shutdown bill could spur a move into the marijuana industry.
That said, if President Donald Trump signs the legislation, as expected, the manufacture and sale of its products will be illegal under federal law, and it will have a major impact on its market.
Brown said liquor stores could not offer any of his drinks on the shelves. Microbreweries, which have tried to combat declining beer sales by offering THC drinks that are more popular than alcohol among young people, would be breaking federal law if they continued to offer such libations.
And retail stores, including Target, would likely stop selling THC-infused drinks and other products because customers wouldn’t be able to pay for them with credit cards due to federal banking rules.
Shipping THC-infused products across state lines would also be against federal law.
“I think it’s wrong from every angle,” Brown said of the hemp provision in the shutdown legislation.
Brown said he manufactures about 2 million cans a year and that his THC-infused beverage operation is small compared to other Minnesota companies.
He said he started his business in a kiosk with a sign that read “Try CBD,” a non-intoxicating hemp ingredient that is praised for its medicinal value. If hemp-infused drinks and edibles are outlawed, Brown says he’s preparing to turn Nothing but Hemp, which has 60 employees, into a marijuana business.
Jim Taylor, a spokesman for the Minnesota Office of Cannabis Management, said “any draft or proposed (hemp) language is being reviewed to see its impact on Minnesota.”
“This is a complex policy issue, and we are reviewing it with the Attorney General,” Taylor said.
Just signed by Minnesota Attorney General Keith Ellison a letter They said unregulated THC products pose a threat to the general public along with 38 other attorneys general.
David Ladd, president of the Minnesota Industrial Hemp Association, said his group has tried to be as neutral as possible on the issue. But he said the state’s hemp growers also don’t want to “stifle innovation and investment” in hemp, which can be used to produce a variety of products, including biofuels, paper and textiles.
“I get regulations and sponsors for hemp products,” Ladd said. “But an arbitrary change in the definition of hemp is no substitute for measured regulation.”
The US Senate gave final approval to the shutdown bill late Monday. The legislation now heads to the US House, where Minnesota’s Democratic House members are expected to join the state’s two Democratic senators — Klobuchar and Smith — to reject the legislation.
So the longest government shutdown is on its way to an end after eight moderate Democrats in the US Senate dropped their opposition to the bill. GOP leaders said they offered a fair deal because the legislation would protect programs from Trump’s budget cuts and the Affordable Care Act subsidy extension promised by Senate Leader John Thune (R-SD) in exchange for Democrats’ votes to reopen the government.
This led to an onslaught of criticism from Democratic colleagues and Democratic voters.
Rep. Angie Craig, D-2. Barrutiko, for example, posted on social media “If people think this is a ‘deal’, I have a bridge to sell you.”
This the article appeared for the first time MinnPost and is republished here under a Creative Commons Attribution-NoDerivs 4.0 International License.
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Cannabis became legal for adult use in California in 2016, and adult-use licensing began in January 2018. Nearly a decade after adult-use marijuana became legal in California, two cannabis owners point out that, between taxes and competition, the cannabis business is not equal. Last month, the Humboldt County Board of Supervisors reduced the cannabis tax rate to zero on Oct. 28, ending a long debate about the law’s impact on struggling growers.
Julius Adams, co-founder of Cannabis shop Proper Wellness Center, says business has been good, but with the constant competition from new cannabis shops, various taxes and regulations, it can be frustrating for new business owners.
“Every penny is regulated and so every penny is taxed, so it scares a lot of people away that they don’t want to be a part of it, you know, especially when the taxes are as high as they are,” Adams said.
One of the Proper Wellness distributors is the Sol Spirit cannabis farm, which operates as a small agribusiness. Owner Judi Nelson says she is mired in competition with big distributors, and has to work two jobs to stay afloat.
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