Federal Hemp Ban Proposal Introduced, Raising Alarm Across U.S. Hemp Industry
A federal proposal introduced in Congress in November 2025 is sending shockwaves through the U.S. hemp industry, with manufacturers, retailers, and investors warning it could effectively dismantle much of the hemp-derived cannabinoid market as it exists today.
The measure, introduced as part of a broader federal appropriations package, rewrites the legal definition of hemp established under the 2018 Farm Bill. While supporters describe the move as a necessary correction to close loopholes that allowed intoxicating products to proliferate, industry stakeholders say the language amounts to a de facto ban on most hemp-derived THC products currently sold nationwide.
Under the proposal, hemp would no longer be defined solely by its delta-9 THC concentration of 0.3% on a dry-weight basis. Instead, the legislation introduces a “total THC” framework that includes delta-9 THC and its precursor THCA, along with new product-level limits that significantly restrict finished goods.
The most consequential provision sets a cap of 0.4 milligrams of THC per container for any final hemp-derived cannabinoid product. Industry analysts note that this threshold is far below the potency of most hemp-derived beverages, gummies, and edibles currently on the market, many of which contain one milligram of THC or more per serving.
The proposal also excludes from the definition of legal hemp any intermediate or finished product that exceeds the total THC threshold, as well as certain cannabinoids that are chemically synthesized or manufactured outside the plant. Together, these changes would place many existing hemp products back under the Controlled Substances Act.
Market participants say the impact would extend well beyond niche delta-8 products. Hemp-derived THC beverages, one of the fastest-growing segments in the category, have gained traction in convenience stores, bars, and mainstream retail, in part because they operate outside state-licensed cannabis systems. The proposed federal limits would likely eliminate most of those offerings.
Legal and regulatory experts caution that the legislation’s language could also complicate compliance by shifting enforcement from a plant-based standard to a product-based one. Companies would be required to reassess formulations, laboratory testing protocols, packaging sizes, and labeling practices to ensure compliance with the per-container THC cap.
The proposal includes a delayed effective date of November 12, 2026, giving businesses roughly one year to adapt. Many hemp operators are already responding by exploring reformulation strategies, tightening supplier documentation requirements, and redirecting investment toward non-intoxicating cannabinoids or industrial hemp applications such as fiber, grain, and seed oil.
Supporters of the measure argue that the current hemp market has outpaced federal oversight, creating public safety risks and undermining state-regulated cannabis programs. Critics counter that Congress is imposing prohibition-style limits without first establishing a clear regulatory pathway through the Food and Drug Administration for adult-use hemp products.
The debate is expected to intensify in 2026, with industry groups pushing for amendments or alternative regulatory frameworks before the provisions take effect. Legal challenges and state-level conflicts may also emerge, particularly in jurisdictions where hemp-derived THC products have become a significant part of the local economy.
For now, the proposal has introduced a new level of uncertainty into a sector that has already faced years of shifting federal guidance, leaving many hemp businesses preparing for what could be the most consequential regulatory reset since legalization in 2018.