Closing The Hemp Loophole
The “Hemp Loophole” was a legal gap created by the 2018 Farm Bill that allowed hemp-derived intoxicating products like delta-8 THC to be sold nationwide, largely unregulated, but it is set to close under federal law in November 2026. The loophole emerged from the Agriculture Improvement Act of 2018 (2018 Farm Bill), which legalized hemp by defining it as Cannabis sativa L. containing no more than 0.3% delta-9 THC by dry weight. This definition explicitly referenced only delta-9 THC, leaving other psychoactive cannabinoids, such as delta-8 THC, delta-10 THC, and THCA, technically legal if derived from hemp and below the delta-9 threshold. Manufacturers exploited this gap to produce intoxicating products from hemp-derived CBD, creating a multi-billion-dollar market for gummies, beverages, vapes, and other edibles. The loophole allowed hemp-derived THC products to operate largely outside state cannabis regulations, often without age restrictions, lab testing, or safety oversight. This unregulated market grew rapidly, with estimates suggesting a $28 billion industry employing over 300,000 people. Licensed cannabis operators argued that these products undermined regulated markets by offering cheaper alternatives and bypassing compliance costs. Courts generally upheld the legality of hemp-derived intoxicants federally, while states retained the authority to impose stricter bans. In response to public health concerns and regulatory ambiguity, Congress passed the Continuing Appropriations and Extensions Act of 2026 (H.R. 5371), signed into law on November 12, 2025. Section 781 of the Act redefined hemp to include a total THC limit (including all isomers and THCA) of 0.3% by dry weight and imposed a 0.4 mg THC per container cap for finished products. The law also excluded synthetic or lab-converted cannabinoids, effectively banning most intoxicating hemp products, including delta-8 and THCA flower. Enforcement was set to begin on November 12, 2026, which gave the industry a one-year window to adapt and, of course, to try to push back. The closure of the loophole has sparked lobbying efforts to preserve some hemp-derived products under regulated frameworks, including proposals for age verification, lab testing, and excise taxes. Advocates argue that while the law protects public health, it also threatens jobs, state tax revenue, and the viability of hemp-based businesses, particularly in states without legal cannabis markets.
The U.S. Senate has voted to delay closing the hemp loophole, after a bit of a fight. Now it moves to the House, where another fight appears to be brewing.
Kristen Ullman, Eagle Forum President, is scheduled to join me to discuss the issue and why the Eagle Forum is in this fight for public safety.
