Hemp Regulation in the U.S.: Between the Farm Bill, Spending Riders, and State Action
Hemp and hemp-derived cannabinoids (including CBD, Δ⁸-THC, THCA, and other novel compounds) occupy a complex legal space in the United States. On one level, hemp was federally removed from being a controlled substance under the 2018 Farm Bill, but numerous gaps, “loopholes,” and regulatory uncertainties remain. In recent months, Congress, state legislatures, and regulators have stepped up efforts to clarify, tighten, or even reverse aspects of hemp’s legal regime. The stakes are high—not just for businesses and consumers, but also for public health, law enforcement, and the future of cannabis policy.
Below is an overview of national developments, legal risks, and state-level trends.
National Framework & Recent Shifts
The 2018 Farm Bill and USDA Oversight
Under the Agriculture Improvement Act of 2018 (the “Farm Bill”), hemp was defined as cannabis sativa (or any part thereof) with no more than 0.3% Δ⁹-THC on a dry weight basis, removing it from the federal list of controlled substances.
To regulate cultivation, the bill directed the USDA to establish a Domestic Hemp Production Program. In response, USDA developed rules for states and tribes to submit hemp plans for cultivation oversight (or, for jurisdictions without approved plans, a federal fallback plan).
However, the Farm Bill leaves many questions unanswered, especially concerning processed hemp products, cannabinoids derived via conversion (e.g. Δ⁸ THC), potency, and consumables.
FDA, Food & Drug Law, and Regulatory Gaps
The Food and Drug Administration (FDA) has taken the position that THC and CBD products are excluded from the definition of dietary supplements under section 201 of the Food, Drug, and Cosmetic Act. Thus, many ingestible or consumable hemp-derived products cannot be marketed as dietary supplements or food additives without FDA approval.
FDA oversight has historically focused on adulteration, false claims, contaminants, and labeling issues, but it has not broadly authorized hemp-derived cannabinoid products for health or wellness claims.
Because of these ambiguities, many hemp-derived cannabinoid products currently exist in a legal gray zone—with regulatory attention but little clarity.
New Federal Moves to Restrict or Redefine Hemp
In 2025, significant pressure has emerged in Congress to redefine hemp and to restrict or ban many consumable hemp-derived cannabinoids. Some key developments:
The House Appropriations Committee advanced a spending bill with language to close the “THCA loophole” and redefine hemp more narrowly, effectively banning many intoxicating hemp products.
That proposal would expand the definition of hemp to exclude products with any “quantifiable amount” of THC (or cannabinoids with THC-like effects) — potentially making even trace-level cannabinoids illegal, depending on how “quantifiable” is defined.
Critics argue this could sweep in CBD and many existing hemp products, removing protections the industry has relied upon.
MJBizDaily and allied trade publications note that the budget proposal would ban hemp-derived THC and THCA flower and related products.
Associations such as the Washington State Wine & Spirits Association (WSWA) have expressed concern that the proposed language in Section 759 could ban even “naturally occurring cannabinoids.
Cannabis Business Times and others observe that Congress is now more actively engaging the issue, perhaps more than in previous years.
If passed into law, these changes could dramatically restrict or criminalize many hemp-derived cannabinoid products that today are sold legally under current frameworks.
State-Level Trends: Regulation, Bans, and Patchwork Systems
While national law sets boundaries, states are acting aggressively (and very differently) to regulate or restrict hemp-derived cannabinoids. Below are a few illustrative state examples:
Illinois
Illinois Governor JB Pritzker has threatened an executive ban on hemp-derived THC products (edibles, drinks, etc.) because the state legislature has not yet passed comprehensive regulatory bills. The risk is that, absent a regulatory system, the executive may move unilaterally. The core concerns include weak labeling, lack of testing standards, and over-potent products.
Texas
Texas is a particularly volatile example:
In 2025, the Texas Legislature considered Senate Bill 3 (SB 3), a sweeping measure that would have prohibited many consumable hemp-derived cannabinoid products. However, Governor Greg Abbott vetoed it on June 22, 2025, citing constitutional concerns and calling for a more regulated approach instead.
Abbott has since urged lawmakers to treat hemp-derived THC products like alcohol—with age limits, packaging rules, sale restrictions, etc.
Meanwhile, enforcement pressures are mounting. The Texas hemp industry supports greater regulation—age limits, stricter testing, location restrictions—but warns against overreach.
More recently, Texas implemented Senate Bill 2024, banning the sale, marketing, and advertising of vape products containing cannabinoids (THC, CBD, Δ⁸, THCA) in retail—but not criminalizing possession.
The Texas case shows a tension between outright bans and regulated frameworks, with political dynamics heavily influencing direction.
North Carolina (NC)
North Carolina is in a transitional regulatory stage:
Until recently, NC operated largely under the federal definition of hemp (≤ 0.3% Δ⁹ THC) with little state regulation specific to processed hemp cannabinoid products.
A pending state bill aims to impose regulations: license requirements for manufacturers, age-21 purchase limits, product testing (for heavy metals, pesticides, contaminants), restrictions near schools, and prohibitions on marketing to minors.
The bill also targets synthetic cannabinoids and new forms of hemp products for youth access.
If passed, NC may move from a “hands-off” hemp regime to a regulated consumer product model.
Other States & Emerging Patterns
Mississippi, Georgia, New Mexico, Texas have moved fast to ban or severely restrict hemp-THC products, sometimes at the chamber level.
States such as South Dakota, North Dakota, Wyoming prohibit cannabinoids created via isomerization (impacting Δ⁸–THC, Δ¹⁰–THC, etc.), though Δ⁹ THC (if not isomerized) may still be permitted under their laws.
Colorado, Iowa, Minnesota and others have placed caps on total milligrams of THC per serving (e.g. Colorado’s 1.75 mg cap).
In Missouri, the Attorney General has threatened enforcement actions (cease-and-desist letters) against companies selling THCA flower products, even if they argue compliance with federal definitions.
In Minnesota, a change in labeling law is underway: currently, a 12– or 16-ounce hemp-derived THC drink with up to 10 mg THC must be labeled as “two servings” of 5 mg; new legislation would allow it to be marketed as a single serving, easing consumer confusion.
Challenges, Risks & What to Watch
Legal Uncertainty & Enforcement Risk
Many hemp-derived cannabinoid products exist in a murky legal zone. If Congress passes stricter definitions or bans, businesses and consumers may find themselves suddenly noncompliant. The lack of clarity around “quantifiable amounts,” thresholds, and conversion from precursor cannabinoids (like THCA to THC upon heating) heightens legal risk.
State enforcement is patchy and unpredictable. For instance, Missouri’s AG has issued threats against THCA flower sellers notwithstanding federal definitions.
Public Health, Safety & Product Integrity
Concerns about mislabeling, over-potent products, contaminants, and inconsistent testing standards drive regulatory interest. States cite risks to minors and consumer safety in pushing bans or restrictions.
Market Disruption and Industry Fallout
If sweeping bans are enacted at the federal or state levels, many existing hemp-related businesses—especially small operators—could face closure, regulatory noncompliance, or loss of investment.
Role of the Courts & Interpretation
Court decisions in various circuits (e.g. on Δ⁸ THC or THCA) may influence how federal and state agencies interpret laws. Differences in judicial interpretation may lead to fragmented enforcement regimes.
What to Watch in 2025–2026
Final versions of the FY2026 Agriculture and Appropriations bills and whether “close the loophole” language survives.
How “quantifiable amount,” “intoxicating cannabinoid,” and related legal definitions get interpreted or litigated.
Whether states pivot toward regulated models (licensing, testing, labeling) over blanket bans.
Legal challenges by industry groups against state bans or federal overreach.
FDA’s regulatory actions or guidance (if any) on hemp-derived cannabinoid products beyond enforcement letters.
Conclusion
The hemp-derived cannabinoid market sits at a crossroads. The 2018 Farm Bill opened a door, but Congress and states are now actively debating how far that door should remain open. As proposals emerge to redefine hemp, ban intoxicating derivatives, or impose sweeping restrictions, businesses, consumers, and policymakers must brace for change—and hope regulatory clarity, not abrupt prohibition, prevails.
This article is not intended as legal or financial advice, nor does it have any particular political position. It represents a summary of ongoing legislative and regulatory activity related to hemp-derived products. Laws and regulations are constantly evolving, and readers should verify the most up-to-date information from official state or federal sources, or consult with legal or other advisors or counsel.
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