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News

Nov 13, 2025Client Alert

Hemp Industry Faces $30 Billion Shake-Up Under New Federal Bill

The bill to reopen the federal government is making headlines for ending the longest shutdown in U.S. history, but a lesser-known provision inside the 141-page legislation is upending the hemp industry. 

The measure, passed late Wednesday, introduces sweeping restrictions on hemp-derived THC products, including popular Delta-8 gummies, THC-infused beverages, and vape cartridges. Under the new rules, any finished hemp product containing more than 0.4 milligrams of total THC per container will be banned nationwide. 

Industry leaders warn the change could devastate a market worth an estimated $28–$30 billion. 

"This will kill the hemp industry as we know it," said Jonathan Miller, general counsel for the U.S. Hemp Roundtable, in an interview with NPR. "We’re talking about wiping out thousands of businesses and hundreds of thousands of jobs." 

The provision does not take effect immediately. Businesses have one year from enactment—likely until late 2026—to comply. After that, most hemp-derived THC products will be illegal under federal law. While this does give some time to address the issue, the Senate vote regarding whether to include this language suggests that congressional action on this issue is likely going to take some work on behalf of the industry.  

What’s Changing 

  • THC Cap: Finished goods cannot exceed 0.4 mg total THC per container. 
  • Synthetic Cannabinoids: Compounds like HHC and THC-P will be prohibited. 
  • Grace Period: One year before enforcement begins. 

Economic Fallout 
Analysts predict a $30 billion market collapse and the loss of more than 300,000 jobs across farming, manufacturing, and retail. Experts warn that consumers who rely on hemp-derived THC for pain relief or anxiety may turn to illicit markets. 

Why It’s Happening 
Supporters say the ban closes a loophole that allowed intoxicating products to be sold outside regulated cannabis channels, often without age checks. Senate Minority Leader Mitch McConnell, who championed hemp legalization in 2018, defended the move: 

"We never intended hemp to become a backdoor for THC products," McConnell said. 

Opponents, including Sen. Rand Paul, argue for regulation rather than prohibition, citing economic harm and states’ rights concerns. 

What’s Next 

  • Enforcement begins one year after enactment. 
  • Expect litigation, lobbying, and state-level workarounds. 
  • Businesses should start compliance planning and work with counsel to address concerns now. 

The Industry Position 
This is a pivotal moment for hemp entrepreneurs, investors, and policymakers. The industry needs clear, balanced regulation, a blanket ban is likely to harm businesses and expand the illicit market.  

Call to Action 
If you operate in the hemp or cannabis space, reach out to our team.  

We can help you: 

  • Navigate compliance under the new federal framework. 
  • Develop government relations strategies. 
  • Explore alternative business models and state-level opportunities. 

Contact us today to protect your business and position for what’s next. 

Disclaimer: For discussion purposes only; not legal advice. 

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