November 13, 2025
Summary
With Congress slamming the door shut on intoxicating hemp products – albeit 365 days from now – there is tremendous uncertainty. While tomorrow may look no different, the exploding hemp beverage and other intoxicating hemp markets may effectively be out of business in a year’s time. Below are some of the questions that stakeholders may be asking. Foley Hoag Cannabis and Hemp Practice Co-Chairs Jesse Alderman and Michael McQueeny, and Partner Stephen Bartlett will address these and more topics in our upcoming webinar “Congress Attempts to Close the Hemp Loophole: What Legal and Strategic Considerations are Next?,” on November 24 at 12 – 1 pm ET. Click to register.
- What is the forecast for these restrictions to be modified or the 365-day “runway” to be extended?
- Are there legal strategies to employ now to prepare for possible bankruptcy or restructuring while maintaining business operations during the 365-day period?
- Will states with regulated intoxicating hemp markets continue to license and regulate hemp businesses and allow exiting companies to operate?
- If so, will states allow interstate shipment of source material like THC distillate notwithstanding federal illegality?
- Will “trigger” language in state statutes immediately become effective? For instance, Alabama’s IHP law identifies that “[a]ny federal law enacted after July 1, 2025, that conflicts with a provision of this chapter shall supersede the conflicting provisions of this chapter.” Arkansas has similar trigger language.
- Will hemp companies be subject to Section 280E of the IRS Code, and in which Tax Years?
- If so, will the same minimization strategies used by cannabis companies apply?
- Does federal illegality represent an event of default in loan documents or other financing agreements?
- What is the proper strategy for investor relations?
- Could banking, lines of credit or other relationships be terminated?
- Should I review and/or assess any federal patent and trademark filings to determine the impact of this change on those federal marks?
Yesterday, Congress passed a package of bills to reopen the Federal Government, including a bill providing appropriations for agricultural programs (the “Ag. Bill”). As followers of the cannabis and hemp industries know, the legislation includes a provision to close what opponents call the intoxicating hemp “loophole” created by the 2018 Farm Bill (the “Farm Bill”). In sum and substance, the Ag. Bill would effectively prohibit the sale and/or distribution of all hemp products exceeding 0.4mg of total THC per container.
What the legislation means in layman’s terms is:
- Following 365 days from enactment of the Ag. Bill, most, if not all, intoxicating hemp products will again become classified as “marijuana”, an illegal Schedule I controlled substance under the Controlled Substances Act.
- This includes:
- Any final hemp product containing greater than 0.4mg total THC per container.
- Any intermediate hemp product containing a naturally occurring cannabinoid (Delta-9 THC, Delta-8 THC) that was synthesized or manufactured outside of the plant.
- Any product that is non-naturally occurring (DTHC-O-acetate, HHC, THC-P, etc.).
More specifically, the new measure:
- Prohibits, in addition to the .3% total THC limit:
- All products intended for human or animal consumption with greater than 0.4 milligrams combined total per container of: (a) total tetrahydrocannabinols (including tetrahydrocannabinolic acid); and (b) any other cannabinoids that have similar effects (or are marketed to have similar effects) on humans or animals as a tetrahydrocannabinol (as determined by the FDA);
- Container is defined as “as the innermost wrapping, packaging, or vessel in direct contact with a final hemp-derived cannabinoid product in which the final hemp-derived cannabinoid product is enclosed for retail sale to consumers, such as a jar, bottle, bag, box, packet, can, carton, or cartridge,” but excludes bulk shipping containers or outer wrappings that are not essential for the final retail delivery or sale to an end consumer for personal or household use.
- Cannabinoids that are not capable of being naturally produced by a Cannabis sativa L. plant;
- Cannabinoids and cannabinoid products (whether in intermediate or final form) that: are capable of being naturally produced by a Cannabis sativa L. plant; and were synthesized or manufactured outside of the plant; or contain more than 0.3 percent combined total of: (a) total tetrahydrocannabinols (including tetrahydrocannabinolic acid); and (b) any other cannabinoids that have similar effects (or are marketed to have similar effects) on humans or animals as a tetrahydrocannabinol (as determined by the Secretary of Health and Human Services); or
- Any intermediate hemp-derived cannabinoid products which are marketed or sold as a final product or directly to an end consumer for personal or household use.
- This makes “legal” hemp measurable based on total THC concentration (including THCA) versus the 2018 Farm Bill’s “delta-9 THC dry weight basis” standard.
- All products intended for human or animal consumption with greater than 0.4 milligrams combined total per container of: (a) total tetrahydrocannabinols (including tetrahydrocannabinolic acid); and (b) any other cannabinoids that have similar effects (or are marketed to have similar effects) on humans or animals as a tetrahydrocannabinol (as determined by the FDA);
- Limits the “carve-out” from the definition of “marijuana” (cannabis) under the Controlled Substances Act to “the plant Cannabis sativa L. and any part of that plant, including the seeds, thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a total tetrahydrocannabinols concentration (including tetrahydrocannabinolic acid) of not more than 0.3 percent on a dry weight basis.”
- Provides a 365-day runaway following enactment until the “ban” becomes effective.
- Orders the FDA – in consultation with other relevant Federal agencies – 90 days from enactment to publish:
- A list of all cannabinoids known to FDA to be capable of being naturally produced;
- A list of all tetrahydrocannabinol class cannabinoids known to the agency to be naturally occurring in the plant;
- A list of all other known cannabinoids with similar effects to, or marketed to have similar effects to, tetrahydrocannabinol class cannabinoids; and
- Additional information and specificity about the term “container.”