Update: As of Thursday, July 10, 2025, the Senate approved a bill that contains provisions that would notably alter hemp laws. The implementation has been deferred for one year.
A Republican-led House Appropriations subcommittee has advanced a 2025 spending bill that includes a provision to ban all hemp-derived products, including intoxicating hemp beverages, containing any level of THC including delta-8, delta-9 and other cannabinoids.
If passed, this measure would effectively outlaw the legal hemp-derived THC market nationwide, even for products compliant with the federal 0.3% delta-9 THC limit established in the 2018 Farm Bill. Popular items like vapes, gummies and full-spectrum CBD oils would no longer be permitted under federal law.
This could be a devastating blow to:
- Hemp farmers and extractors
- Retailers and dispensaries selling compliant products
- Consumers seeking non-cannabis derived therapeutic alternatives
Supporters of the provision cite safety and regulatory concerns, while opponents argue that it threatens jobs, small businesses, and an entire sector that was legalized less than a decade ago.
What Does This Mean for U.S. Cannabis Operators?
If this provision moves forward, it could dramatically reshape the competitive landscape. Hemp-derived THC products often compete with regulated cannabis products, especially in states without adult-use programs. While a ban could reduce market confusion and eliminate unregulated competitors, it may also open the door to stricter federal oversight of cannabinoids more broadly. Cultivators, manufacturers and retailers should keep a close eye on how this develops. The outcome could influence consumer demand, pricing strategies and future federal cannabis reform.
Authors: Steven Monacelli, CPA, Partner and Team Lead, Cannabis Services | [email protected] and Lindsey Valentine, CPA | [email protected]
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Withum’s Cannabis Services Team is monitoring developments closely and will continue to provide timely updates. If you would like to talk to a member of our team, please contact us today.
