How a Farm Bill amendment could ‘significantly impact’ hemp brands
U.S. hemp products are at risk of becoming illegal if a new amendment goes through.
Back in 2018, the Farm Bill legalized the production of hemp. This paved the way for the rise of CBD-infused supplements and topical treatments, spurring an industry generating billions of dollars for farmers and companies selling hemp-infused products. In 2023, the U.S. hemp-derived CBD market was conservatively estimated to be $28.4 billion, according to Whitney Economics.
With the expiration date of the bill coming up in September, on May 22 the House Agriculture Committee began putting forth proposals to update its policies and included a hemp-killing amendment. It was added hours before voting by Rep. Mary Miller of Illinois, and was passed through a roll call. If it passes through Congress, the amendment would alter the definition of hemp to “only include naturally occurring naturally derived, and nonintoxicating cannabinoids.” The update would have a major economic impact that would effectively shut down about 90% to 95% of businesses in this space, especially those that make edible and topical products.
Now, industry groups are moving to lobby congress members to strike down the new amendment, in order to save the businesses that are currently able to legally operate under the Farm Bill.
What’s next for the industry
Jonathan Miller, general counsel at U.S. Hemp Roundtable, a nonprofit industry coalition, told Modern Retail that, if passed, the amendment would ban non-intoxicating ingestible products from shelves. Many CBD-based products are now sold at national retailers, like Walgreens, CVS, and Nordstrom.
“We want to make clear this was a bad idea and was passed in a devious manner,” Miller said. “I don’t think most members at the time of the vote knew this was even happening.”
Miller said the U.S. Hemp Roundtable had been hearing talks about closing the tetrahydrocannabinolic acid (THCA) loophole. “But it wasn’t made clear to us until the night before so we couldn’t prepare for it.”
The 2018 Farm Bill legalized the production of hemp by differentiating it from marijuana. According to the 2018 bill, hemp is defined as cannabis (or cannabis derivatives) that contain less than 0.3% delta-9 THC on a dry-weight basis. The definition covers all parts of the plant, such as seeds, extracts and cannabinoids. However, it does not mention hemp-derived THCA. The amendment put forth by Rep. Miller is meant to address the concern that THCA turns into intoxicating THC through the decarboxylation process once it’s exposed to heat.
In a May 13 letter, the Drug Enforcement Administration reiterated that there was no hemp loophole to begin with.
A renewal of the Farm Bill is due to be voted on by Sept. 30, but Miller said that because of the upcoming election, the earliest vote is expected to take place until the end of the year or next year. Despite the amendment’s last-minute addition, advocacy groups like the U.S. Hemp Roundtable are already working on pushing D.C. to strike down the hemp-banning proposal.
“We’re very confident we’re going to be able to defeat this,” Miller said. “We’re going to meet with over 20 members of Congress to urge them to vote against the amendment.”
How businesses would be affected
If the amendment passed, hemp-based products would begin being federally regulated like cannabis, which would push currently legal brands to either pivot or pull any products that contain traces of THC.
Minnesota-based Mary & Jane sells its hemp-based edibles direct-to-consumer nationally. The company, launched in November 2023, produces products with federally legal industrial hemp. Mary & Jane’s melts contain 1 mg of Delta-9 THC, and are in accordance with the 2018 Farm Bill, as it’s legal to sell hemp that does not exceed 0.3% by dry weight.
Co-founder Rachael Anderson Dillon said the brand’s positioning revolves around its low dose, so the amendment would “significantly impact our business and so many others,” including the thousands of farmers who have pivoted to growing hemp in the last few years.
Minnesota’s current hemp framework would still allow the company to sell within the state. “But about 50% of our business is out of state thanks to the DTC model, so that’s scary for us,” Dillon added.
The company is also launching a new product called Simple Sunny this month. It’s made of the non-intoxicating kanna plant and would be legal to sell online, including through Amazon and at retail partners.
“If this passes, we’ll push Simple Sunny nationally and focus on our home market for the other products,” Dillon said. “It would take a lot more investment and time to set up production.” But if a federal ban goes into effect, Mary & Jane will explore the options to move to the regulated THC market. However, that would take an expensive and lengthy pivot.
Dillon said it’s difficult to have these amendments slipped in by lawmakers after building a company that was set up legally, and have them potentially thwart growth. “We’re a very young business that’s self-funded, so it’s extremely frustrating because we’re following all the rules, guidelines and doing product testing,” she said. “And suddenly it can all be taken away.”