I’ve spent a lot of time lately thinking about the definition of “hemp” under the 2018 Farm Bill. More than anyone reasonably should, probably.
The history is actually pretty interesting though…I promise. Ride with me on this one.
Brief History
The 0.3% dry-weight delta-9 THC limit goes back to the 2014 Farm Bill, but the hemp market we know today really came out of the changes made by the 2018 Farm Bill. In 2018, Congress kept the 0.3% limit, expanded “hemp” to include derivatives, extracts and cannabinoids, and removed qualifying hemp from the definition of marijuana under the Controlled Substances Act (“CSA”).
There was one pretty obvious problem with the way Congress implemented its limit though: 0.3% by dry weight is an… interesting…way to regulate an intoxicating consumer product because it measures concentration, not dose. A 10 gram gummy can contain 30 mg of delta-9 THC and still be only 0.3% THC by dry weight. Just add more sugar and scale up!
The market figured that out, and here we are.
I’m Not a Policeman, I’m a Princess! (Or, I’m Legal Hemp, Not Illegal Marijuana!)
Whatever Congress intended in 2018, businesses were operating under the law Congress actually wrote. If a product fit within the federal definition of hemp, the company could say something marijuana businesses couldn’t: “We sell legal hemp.”
That did more than make gummies and THC beverages possible. It made the businesses necessary to support the industry more comfortable working with the companies selling them.
Federal banking regulators even told banks they didn’t need to file a Suspicious Activity Report solely because a customer was engaged in lawful hemp activity. Insurers, retailers, distributors, payment processors, landlords and lenders could make the same basic distinction: hemp wasn’t marijuana under federal law.
Now Congress is taking that distinction away for much of the current market.
Under current law, the federal definition of hemp changes on November 12, 2026. Among other changes, THCA is expressly included in the 0.3% THC calculation, creating an obvious problem for high THCA flower and vapes. Finished hemp-derived products also can’t contain more than 0.4 milligrams per container of total THC and certain similar cannabinoids and still qualify as “hemp.”
There is no meaningful recreational THC market at 0.4 mg per container.
Plenty of beverages currently sold in Wisconsin contain 5, 10, 20 or even 50 milligrams of THC per can. This isn’t a matter of taking a 10 mg beverage down to 5 mg and carrying on. Most of the products currently making up this market simply won’t qualify as hemp anymore.
There is still legislation toddling around Washington that could delay the change or alter it. Maybe Congress pulls something together at the very last minute, but I wouldn’t run a business on that assumption.
Keep It in Wisconsin
But, Collin, won’t staying in Wisconsin solve this problem? Couldn’t Wisconsin allow these products despite the change in the federal definition of “hemp?”
Sure, but that doesn’t solve the problem described above. Wisconsin can’t force an otherwise uncomfortable bank to keep banking a business selling products that are illegal under federal law. The old “keep it in Wisconsin to keep the Food and Drug Administration away” approach doesn’t translate either.
The Food and Drug Administration (“FDA”) regulates food in interstate commerce and has maintained for years that THC cannot lawfully be added to conventional food and introduced into interstate commerce. The 2018 Farm Bill didn’t change that. Because of the interstate commerce hook, we’ve talked with clients about keeping THC food products entirely inside Wisconsin as a way to avoid that particular FDA enforcement problem. If the product never entered interstate commerce, there was at least a plausible jurisdictional argument to make.
The CSA doesn’t work the same way. Keeping the product in Wisconsin doesn’t create an exception to federal controlled substance law.
Wisconsin could still allow THC products that no longer qualify as hemp under federal law. Other states have operated marijuana markets in conflict with federal law for years. But that would be a different business model from the Wisconsin hemp market we have today and nobody knows if\how\when enforcement priorities at the federal level are going to change.
Right now, a company can say: “Federal law says this is hemp.”
After the change, a “Wisconsin only” company may instead be saying: “Wisconsin lets us sell it even though the feds say it’s illegal.”
Some businesses will be willing to operate that way. The harder question is how many banks, insurers, retailers, distributors and other businesses will be willing to go with them.
Thanks for reading.