When attempting to stop Congress from including language to ban intoxicating hemp products in a deal to reopen the government, U.S. Sen. Rand Paul, R-Ky., said the legislation would override 23 state laws that “already regulate hemp responsibly.”
Paul argued on Nov. 10 that the hemp provisions in an appropriations package to fund the federal government would “wipe out” an entire $28-billion industry. Hoping to avoid this disruption, Paul offered an emergency amendment in a last-ditch effort to remove the prohibitive language.
“The states have done what they’re supposed to,” he said. “Twenty-three states have instituted laws on hemp. None of them have limits anywhere close to what is being proposed in this bill. So, what will happen is, most of the things that your states are regulating and have made legal will be made illegal by this bill. This bill will preemptively preempt and nullify all state laws concerning hemp.”
In nullifying state hemp laws, Paul said the federal legislation will make the “hemp industry kaput.”
His Hail Mary to remove the hemp language failed, 76-24, in the Senate. The House also preserved the language in the final government reopening package that President Donald Trump signed on Nov. 12.
While Paul did not succeed, he put state officials on alert: The vast majority of hemp products available in state marketplaces will soon collide with federal law under the status quo.
As signed by Trump, the hemp legislation includes a one-year transition period until the federal law’s changes take effect on Nov. 13, 2026. If nothing changes before then, synthetic and converted cannabinoids will be outlawed (such as delta-8 THC and HHC), the definition of hemp will include total THC (including THCA), and hemp-derived cannabinoid products will be limited to 0.4 milligrams of total THC per container.
In Kentucky, this means the state’s allowance of 5 milligrams of hemp-derived THC per container of a 12-ounce beverage would be in clear violation of the federal standard.
During a press conference on Nov. 13, a reporter asked Kentucky Democratic Gov. Andy Beshear if he agreed with Paul about the federal government’s hemp language posing an “existential” risk to the state’s industry.
Beshear said he had yet to review the federal language but added that he believes hemp is an “important” industry in the Blue Grass State.
“We should have appropriate safety regulations around it, but we should make those regulations here in Kentucky, talking to the industry and making sure that we get that balance right,” he said. “I think that we can protect our kids; I think that we can do the right thing to protect all of our people while not handicapping an industry that supports a lot of people.”
As state officials throughout the country will likely review their hemp-related regulatory frameworks, or lack thereof, in the wake of the federal legislation, states could take drastically different approaches, including:
- Aligning their regulations with federal standards
- Maintaining their current regulations regardless of federal standards
- Adopting new regulatory regimes that collide with federal standards
- Folding their hemp programs into their licensed cannabis markets
These potential outcomes have yet to play out, especially if the question of federal preemption gets considered in court.
While the federal law may indicate that states need to modify their hemp laws, there is no timeline for them to do so in the Trump-signed bill. Also, if the nation has learned one thing from cannabis, the 40 states that have legalized medical and/or adult-use programs have generally operated their licensed markets free of federal government interference.
With this reform precedent, two questions come front and center:
- Could there be a new wave of state-by-state hemp legalization across the U.S.?
- Could this come in the form of citizen-initiated ballot measures for hemp-derived cannabinoid products?
A lot still needs to happen (or not happen) before those questions have pertinence.
In Tennessee, the state’s Department of Agriculture (TDA) has already issued a notice to its hemp industry stakeholders that it will be business as usual – at least for now.
Under Tennessee’s new law, which is set to take effect on Jan. 1, hemp-derived cannabinoid beverages and edibles can contain up to 15 milligrams of THC per serving, with two servings per container for drinks and 20 edibles allowed per package. The state’s beverage potency cap is 75 times that of the new federal standard.
“Until TDA has more information, Tennessee’s hemp program will remain unchanged under existing state law while federal agencies develop guidance to implement the new provision,” the Nov. 14 notice states. “Similarly, at this time, regulation of hemp production and hemp-derived cannabinoid products also remains unchanged under current state law.”
Under the federal legislation, the U.S. Food and Drug Administration (FDA) is tasked with issuing guidance within 90 days, including what constitutes a natural cannabinoid versus a synthetic cannabinoid, while also clarifying the definition of “container.”
As Paul pointed out last week on the Senate floor, many states have regulations allowing for much more than the federal government’s 0.4-milligram-per-container cap on THC. In addition to Kentucky and Tennessee, he referenced Maine (3 milligrams per serving); Minnesota, Utah and Louisiana (5 milligrams); and Alabama and Georgia (10 milligrams).
These states have varying regulations surrounding packaging sizes, synthetic cannabinoids, allowable product forms, etc. States that choose to regulate hemp products also often prioritize age restrictions, packaging and labeling standards, and testing requirements.
“This bill, as it now stands, overrides the regulatory frameworks of several states, cancels the collective decisions of hemp consumers and destroys the livelihoods of hemp farmers,” Paul said.
In other states that don’t yet regulate hemp-derived cannabinoid products, the federal law could influence local lawmakers.
In Ohio, where Senate and House lawmakers are negotiating intoxicating hemp product regulations in a conference committee, state Rep. Tex Fischer, R-Boardman, said the federal law added another hurdle to state legislation he helped craft, the Ohio Capital Journal reported.
“We’re still trying to figure out how to implement what’s going on at the federal level, so I think that maybe pumped the brakes a little bit while we try to figure out how to proceed based on that,” Fischer said.
Ohio’s proposal would allow licensed hemp dispensaries to sell products containing no more than 0.5 milligrams of delta-9 THC per serving or 2 milligrams per package, or no more than 0.5 milligrams of total non-delta-9 THC per package (such as delta-8 THC).
While nine of the 24 states that have legalized adult-use cannabis did so legislatively, Ohio was not one of them, where lawmakers deliberately passed legislation in defiance of federal prohibition. Instead, the Buckeye State’s voters did so in the 2023 election.
And although states may take varying approaches to consumable hemp product regulations – even under a new federal standard – states have their hands tied when it comes to other potential industry impacts, including:
- Interstate commerce;
- Section 280E tax requirements; and
- The legality of cannabis/hemp seeds.
Under the new federal definition of hemp, shipping cannabinoid products containing more than 0.4 milligrams of total THC per container across state lines will be prohibited.
Companies involved in the sale or distribution of hemp-derived cannabinoid products that don’t comply with the new federal definition will be “trafficking” a Schedule I drug and therefore cannot deduct their ordinary business expenses (wages, rent, utilities, insurance, etc.) from their federal taxes under Section 280E of the Internal Revenue Code.
And viable seeds are explicitly excluded from the federal hemp definition if the parent plant exceeds the 0.3% total THC threshold (i.e., seeds derived from marijuana are illegal), according to Steven M. Schain, a cannabis law expert at Smart-Counsel LLC, who provided Cannabis Business Times with a “cheat sheet” outlining changes in the new federal law.
Under the new federal law, seeds would only be legal if they are categorized as “industrial hemp,” meaning they’re intended for specific, limited research or non-consumable purposes, such as fiber, stalk, or non-cannabinoid oils, according to Schain. Non-cannabinoid seed derivatives (oil, cake, nut, hull) and microgreens derived from immature plants would be OK.
During his plea last week on the Senate floor, Paul claimed that “every hemp seed in the country” would have to be “destroyed” under the new definition.
“This is the most thoughtless, ignorant proposal to an industry that I’ve seen in a long, long time,” he said. “The states have made progress, and more progress was coming.”
