Since the passage of the 2018 Farm Bill, the hemp industry has rapidly grown into a multi-million-dollar market. This boom has led to a proliferation of hemp-derived products available everywhere, from grocery stores to gas stations. Although the federal government initially paved the way for the industry’s development, it has since taken a hands-off approach to regulating the sector. This lack of federal oversight has shifted the burden to individual states, which have been tasked with developing their own hemp programs. However, recent actions suggest that some states are now moving beyond regulation, with efforts seemingly aimed at curbing, if not dismantling, the industry altogether.
Federal Response to Unregulated Market
Due to the necessity to provide uniformity in the hemp industry, federal lawmakers have introduced several pieces of legislation, such as the Farm, Food and National Security Act of 2024 and the Rural Prosperity and Food Security Act of 2024. Although the Acts focus on streamlining cultivation and easing regulatory burdens for certain categories of hemp, they would drastically affect hemp operators across the nation due to its targeted changes to how hemp is defined under federal law and rule. The Acts modify the existing definition of hemp by replacing language basing the legal limits for hemp on its delta-9 THC concentration, to basing the legal limits on hemp’s “total tetrahydrocannabinol [Total THC] (including tetrahydrocannabinol acid (THCA]) concentration.” Moreover, the amendment would further restrict hemp’s definition to exclude synthetic and intoxicating products. As such, hemp cannabinoid products with “quantifiable amounts” of total THC (including THCA) or any other cannabinoids that have similar effects as THC would be strictly prohibited.
Recently, Senator Ron Wyden filed the Cannabinoid Safety and Regulation Act to offer a more robust framework for consumer safety and product legitimacy. Not only does it focus on keeping such products out of the hands of minors, but also highlights the need for federal oversight on setting manufacturing and testing control processes, as well as labeling requirements to ensure products are safe for human consumption. Under the proposed bill, it will require producers of cannabinoid products to register with the Food and Drug Administration (“FDA”) and test their products for contaminants, heavy metals, pesticides, and additives. The bill further mandates the FDA to promulgate rules specifying testing requirements to ensure safety standards are met in every state. Although this Act maintains the above’s new legal limits on hemp, as well as banning synthetically derived cannabinoids, it intends to prevent an outright federal ban on hemp products containing traceable amounts of THC.
Multi-State Attack on the Hemp Industry
California
Despite being a prominent leader in the cannabis industry, California took a surprising turn on September 6 when Governor Gavin Newsom (D) issued proposed emergency regulations that effectively cripple the state’s hemp industry. Under the new regulations, the California Department of Public Health (“CDPH”) approved of emergency rules that require all industrial hemp food, food additives, beverages, and dietary supplements intended for human consumption to have no detectable THC or other intoxicating cannabinoids. The regulations expand upon the definition of “intoxicating cannabinoids” as the language adds an additional thirty (30) cannabinoids and isomers, including delta-5, delta-6, delta-7, delta-10, and delta-11. The additional cannabinoids and isomers are on top of further banning delta-8, delta-9, and THCA. All products intended for human consumption will be further restricted to no more than five (5) servings per package. Moreover, to address products on the market that are attractive to children, the new rules establish a minimum age of twenty-one (21) to purchase hemp food products.
New Jersey
On September 12, 2024, Governor Phil Murphy (D) signed Senate Bill No. 3235 into law, despite his concerns regarding the language of the Bill. Pursuant to the Bill, the Cannabis Regulatory Commission (“CRC”) now has authority to regulate intoxicating hemp products. Under the new law, “intoxicating hemp product” is defined as any product cultivated, derived, or manufactured from hemp regulated pursuant to the “Agricultural Improvement Act of 2018,” Pub.L.115-334 or the “New Jersey Hemp Farming Act,” P.L.2019, c.238 (N.J.S.A.4:28-6 28 et al.) that is sold in this State that has a concentration of total THC greater than 0.5 milligrams per serving or 2.5 milligrams per package. Moreover, “total THC” means total concentration of all tetrahydrocannabinols, including delta-8, delta-9, delt-10, and THCA and any other chemically similar compound, substance, derivative, or isomer of tetrahydrocannabinol, regardless of how derived or manufactured, and any other cannabinoid, other than cannabidiol, identified by the CRC.
Unless the business has a cannabis business license issued by the CRC, hemp operators will be unable to sell such products containing more than the total THC permitted under the Bill. Ironically, the Bill carved out a piece applicable to liquor stores regulated by the Division for Alcohol Beverage Control (“ABC”) – such licensees will be permitted to sell intoxicating hemp products despite not being held to the same standards as cannabis business licensees.
Connecticut
Prior to New Jersey taking such steps to limit the total THC of intoxicating hemp products, Connecticut enacted similar provisions in 2023, which went into effect on October 1, 2024. Pursuant to Public Act 24-76 (House Bill 5150) and its amendments, the Connecticut legislature enforced a new definition of “High-THC Hemp” based on total THC concentration, which differs from the federal Farm Bill’s dry weight measure. In accordance with the new law, High-THC Hemp includes all manufacturer hemp products including edibles, topicals, tinctures and concentrates that have a total THC content of more than 1 mg/serving up to 5 mg/container and hemp flower or trim with a total THC exceeding 0.3% by dry weight. As a result of this new definition, an operator must obtain a cannabis business license from the state to sell High-THC Hemp products.
To note, infused beverages were not included in the High-THC Hemp definition, however, such products did not avoid new restrictions as any time after July 1, 2024, only licensed cannabis retailers and package store permittees may sell THC-infused beverages. Moreover, starting October 1, 2024, THC-infused beverages cannot contain more than 3 milligrams of THC per 12-ounce container.
Hemp operators in Connecticut may sell Moderate-THC Hemp Products, which are defined as hemp products with 0.5 mg/serving to 5 mg of total THC per container, excluding infused beverages. However, they are now required to obtain certification from the Department of Consumer Protection (“DCP”) by January 1, 2025, to sell such products.
Georgia
The Georgia Hemp Farming Act (Senate Bill 494) took effect on October 1, 2024, radically changing the state’s hemp program. Under the new law, hemp operators are now required to obtain one of the following licenses from the Georgia Department of Agriculture: (i) Hemp Grower license; (ii) Hemp Laboratory Registration; (iii) Hemp Manufacturer license; (iv) Hemp Processor permit; (v) Hemp Retail Consumable Establishment license; or (vi) Hemp Wholesale Consumable Hemp license. Although the Act does not ban delta-8, the Department proposed THC limits on edibles containing hemp-based delta-9 THC to 10 mgs./per serving and 150 mgs./per package. To note, gummies are now the only hemp-based edibles permitted in the state as food products such as baked goods or snacks are now banned under the Act.
As a result of the Act’s new language requiring hemp and consumable hemp products to be tested for total delta-9 THC concentration, including THCA, Georgia’s law has effectively closed the THCA loophole as products will have to have a combined concentration of less than 0.3% of both Delta-9-THC and Delta-9-THCA to be legal. Due to the majority of THCA products being available in the form of smokeable flower or pre-rolls, the new Act essentially removes such products from the shelves immediately.
Tennessee
On July 1, 2024, Senate Bill 0378’s provisions became effective, thus establishing new regulatory requirements for the hemp industry. Thereafter, the Tennessee Department of Agriculture (“TDA”) issued new emergency regulations and implemented a licensing program for operators working in the state’s hemp industry. Pursuant to the new regulations, any person who manufactures or distributes hemp-derived cannabinoid products (“HDC products”) are required to obtain a HDC product license from TDA. Moreover, a HDC retail license is required for any person who offers for sale an HDC product at retail. Despite THCA’s growing popularity in the Volunteer State, the emergency rules greatly affect THCA products as it prevents the sale of products with greater than or equal to 0.3% of total THC from those who aren’t licensed; for businesses with an HDC product license, it’s greater than or equal to 5%.
On September 27, 2024, the Tennessee Department of Agriculture filed permanent rules for hemp and hemp-derived cannabinoid products. Operators need to ensure their operations are in compliance with the new rules as they go into effect on December 26, 2024.
Missouri
Governor Mike Parson (R) did not hold back his disdain for the unregulated hemp industry when he signed Executive Order 24-10 into law, specifically attacking hemp food and beverage products. Under the Executive Order, Governor Parson defined “unregulated psychoactive cannabis products” to include delta-8, delta-9, delta10, HHC, THC-O, THCP, THCV, and other similar cannabinoids. As such, the Executive Order requires the Missouri Department of Health and Senior Services (“DHSS”) to “designate foods containing unregulated psychoactive cannabis products as foods that come from an unapproved food source or as foods that contain an unapproved food additive that comes from an unapproved food source . . . and to take the necessary steps in accordance with statute and regulation to embargo and condemn any food containing unregulated psychoactive cannabis products.” Moreover, it mandates the Missouri Division of Alcohol and Tobacco Control (“DATC”) to prohibit such products from being sold on the premises of a liquor-licensed facility.
Fortunately, the Governor’s broad sweeping approach has been minimized as the DHSS published a letter clarifying its enforcement policies concerning certain psychoactive hemp products. However, it did not save them from ongoing lawsuits by state hemp operators.
Conclusion
The passage of the 2018 Farm Bill has paved the way for a thriving hemp industry. However, it requires careful time and effort to establish a pathway that benefits both operators and consumers. Instead of imposing outright bans on products, federal and state governments should collaborate closely with industry leaders to ensure that consumers can access—and continue to access—the products they depend on for managing health conditions.