A new federal rule focused on establishing a total THC threshold will take effect in November 2026. This shift will make an estimated 95% of the existing hemp-derived products federally illegal, according to the U.S. Hemp Roundtable. For many licensed cannabis owners across the country, this is much-needed relief and a long time coming after years of navigating the impact of an unregulated hemp market on their bottom line.
While this might be a step in the right direction, a subtle win is not a true fix for the long-term damage caused to legitimate cannabis businesses and their owners. True progress toward a just market can only be achieved if policymakers treat this new law as a starting point and not the finish line. Without deeper consideration and policy action, the same structural harm to the licensed industry and the communities we have fought to uplift will continue to persist.
Over the last 12 years, I’ve built a licensed cannabis operation in Nevada, sat on the state’s Cannabis Compliance Board, and helped inform how other states approach responsible business practices in our industry. Like many legal operators, I’ve had to navigate licensing requirements, testing mandates, packaging regulations, and seed-to-sale tracking. During that time, I watched the 2018 Farm Bill be used as a shield for an unchecked hemp market, operating with none of the same constraints.
What started as a market for CBD oils and supplements became something else entirely. Hemp-derived THC products, including delta-8, delta-9, and THCA flower that converts to the same compound in your body as marijuana when heated, grew from a $200 million market in 2020 to nearly $2.8 billion by 2023, a 1,283% increase in three years, according to the Brightfield Group. That is not a supplement industry. That is a parallel cannabis market operating without a single one of the rules that licensed operators live by.
Customers tell me directly: They can order the same products online, have them shipped to their door from another state, and pay significantly less. No dispensary visit. No ID check. No lab test verifying what is actually in the product. Once their friends try it that way, they stop coming to licensed dispensaries altogether. I have heard this from people who work inside dispensaries.
According to industry analysts, licensed cannabis operators simply cannot compete on price and convenience with the unregulated hemp-derived THC market. The playing field was not uneven. It was not a field at all.
This is not a Nevada problem. Walk into a gas station or convenience store in a state without a regulated cannabis market, and you will often find hemp-derived THC products on the shelf, in candy packaging designed to look like nationally recognized snack brands, with no age verification and no potency testing. Licensed operators in legal states compete against this. Operators in states that are still fighting for legalization watch as unregulated THC sales normalize before a legal market even exists.
Unfortunately, the current state of conversations with legislators doesn’t provide much clarity on the future of our industry. For many legislators, cannabis compliance is a foreign and complex concept. Besides the work needed to overcome social stigma, they also don’t understand the operational practices that are foundational in our industry. That may include the cost burden for an operator to test, track, package, and sell a compliant product. This often means they don’t have context for how difficult it is for an operator to compete against a channel that isn’t held to the same standards, even when it offers the same or similar products as the legal market.
At a recent industry event, I approached a current Nevada assemblywoman to learn more about how she and fellow lawmakers planned to approach these issues. Our conversation gave me a small glimpse of what impactful engagement could look like.
During our brief interaction, I talked about how the illegal market has been hiding behind the hemp industry. In her response, she stated that she didn’t want to see the hemp industry go away and conceded that there is a need for real regulation. She recognized the importance of sitting with owners, and she even agreed to do so. I walked away with her commitment to meet with fellow operators and me to hear directly about the problem, our first-hand experiences, and our proposed solutions.
That’s a clear indication that both legislators and business leaders are ready to have a conversation about ensuring safe practices and protecting the legitimacy of our industry. As a result of that conversation, I am working to bring together a small group of owners to share data and operational experience in meetings with this legislator and others in the future.
The November rule is our biggest opening for a fair market thus far, but if we don’t take this moment to continue structural conversations about the regulation of the hemp market and impacts on legal cannabis businesses, the loopholes will continue to grow. If we want to see real change, this is what needs to happen:
First, the new total THC standard needs to be enforced with fidelity. We all know that an unenforced law is useless, and we will need true federal enforcement that goes beyond a redefinition. Changing how hemp is defined on paper means nothing if business continues as usual – with the same products shipping across state lines from warehouses that have already moved inventory.
Our federal agencies, the Drug Enforcement Administration and the Food and Drug Administration, need clear, funded mandates designed to support enforcement of the new standard. Simultaneously, states need guidance on how to best coordinate with federal enforcement once an illegal product has entered their territories.
Second, whatever replaces the hemp loophole for compliant hemp operators needs to include the same testing, labeling, age verification, and potency disclosure requirements that licensed cannabis operators are already held to. If the product gets someone high, it should be regulated like something that gets someone high, regardless of what plant it came from.
Finally, Congress and state legislators need to hear the voices of licensed operators directly. This is particularly important for Black and Brown owners who fought for equity licenses, dealt with community fallout from prohibition, and built legal cannabis businesses with the hope that legalization would create a more equitable opportunity to succeed in this market. These are the operators who are most impacted by the damage caused by the unregulated market. They are also the least likely to be invited, seen, or heard when decisions and laws are made, and that has to change.
I will be honest about what the last few years have felt like. My partners and I have joked, only half-jokingly, about walking away from our licensed operation and going into the hemp business instead. Sell the same products. Make more money. Answer to no one. The fact that licensed operators are having that conversation at all is the clearest possible signal that the regulatory framework has been broken. November is a chance to start fixing it.
Legalization was supposed to mean something significant. It was supposed to right-size the outsized burden of prohibition on certain communities and finally make a way for those same communities to benefit from a legal, regulated industry. We thought that following the rules would give us an advantage over those who didn’t; unfortunately, we’ve seen the opposite.
With this new law in place, it’s possible that this haunting industry loophole could truly be closing. But without collaboration and engagement among legislators and each of the competing industries, the promise of a just and legitimate cannabis industry will continue to be a step too far away.
