Earlier this week, the House passed a short-term funding bill that postpones the federal ban on hemp-derived THC products. President Trump signed the ban into law last year; it was scheduled to take effect November 12^th. This Wednesday, however, Trump signed off on the Congressional extension, pushed by his Administration, which means the ban is now scheduled for December 11^th.

The extension begs three primary questions for me. The first is whether Congress will pass legislation relevant to intoxicating hemp products (i.e. regulating them), prior to December 11^th. The second is whether Congress will extend the deadline again, if legislation fails to coalesce. The third is whether enforcement will follow, if a ban takes effect. I’ll answer these and a few more in FAQ format.

Will we see legislation around intoxicating hemp products prior to December 11^th?

We hear a lot of scuttlebutt from Capitol Hill and industry players on this topic. The general sentiment is that comprehensive legislation to regulate intoxicating hemp products is unlikely to coalesce prior to December 11^th. There are just too many disparate interests, too many ideas, and not enough time.

That conclusion was buttressed for me yesterday morning, when Speaker Johnson announced cancellation of all votes for the last two weeks of September. This leaves a very small window before midterms. After midterms, things become even less certain.

Note: the current composition of Congress fully supported the ban, and hardline conservatives have vocally supported it. If Democrats take majorities, we may see a more “regulated market” approach.

Will we see another extension to the December 11th ban on intoxicating hemp products?

This is possible. The Trump Administration has signaled that it will not seek another extension beyond December 11. The Administration had also talked of implementing regulations over the extension period, for whatever it’s worth. More recently, we’ve heard talk of a second extension to the ban, through March. Again, much depends on the midterms.

Who benefits from an extension? Who suffers?

The primary beneficiaries are going to be sellers of unregulated, intoxicating hemp products, from Trump aides on down. Our impression is that many operators in the space aren’t planning carefully, or planning much at all. It’s also fair to say that a lot of hemp products sellers will keep doing whatever they’re doing, or attempt to, regardless of any federal law.

State-legal cannabis sellers are on the other side of this equation, which is a complicating policy factor—including for proponents of an “agnostic” or “one source” bill. The sale of intoxicating hemp products in adult-use cannabis states, including at gas stations etc., competes with these regulated businesses’ sales.

The alcohol lobby is another complicating factor. Major drink producers are pushing to restrict or ban hemp-derived beverages, while wholesalers and retailers would like to see regulation. All of these competing interests, plus the confusion around cannabis regulation more generally, create a true morass.

Will there be enforcement against sellers of intoxicating hemp products, if the ban takes hold?

I wrote a piece about this last December, after the first ban was scheduled. In relevant part, I opined:

At the federal level, I wouldn’t expect a coordinated crackdown by DEA and U.S. attorneys. That would be too expensive, too unwieldy. Instead, I think targeted enforcement of select larger players—perhaps including warning letters next summer—is the most likely path. In that scenario, the chilling effect I mentioned for service providers would be magnified, and it’s likely that many operators would also stand down.

I also think states will continue to get on the prohibition bandwagon, as I explained to MJ BizDaily last month. Some already are, but you’d see more of this in an environment where the feds throw their backs into it, enforcement-wise, and where de jure prohibition is not the whole picture.

I don’t have much to add at this point, other than any business operating under perpetually looming bans, deadlines, enforcement threats, etc., is operating in a dicey milieu. The money must be good!

Big picture

For a long time, I’ve been on record opposing intoxicating hemp products. This is not simply a public health objection to unregulated, chemically synthesized, frequently contaminated products (which are often for sale to minors). As a legal matter, our law firm concluded: 1) the “Farm Bill loophole” does not exist, 2) that most intoxicating hemp products are marijuana or other controlled substances, 3) that most of these products clearly violate the FD&C Act in addition to the Controlled Substances Act, and 4) that most states lack a regulatory framework for these sales (while others outright prohibit them.) I reiterate all of this here, as context for the opinions above.

I do continue to believe that we need a wholistic U.S. policy for the cannabis plant. As far as the pending ban on intoxicating hemp products and seed sales, let’s see what happens leading up to the midterms, and before December 11^th.

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U.S. Representatives Beth Van Duyne (R-TX) and Greg Landsman (D-OH) introduced the Beverage Regulatory Parity Act on Monday, which would create a federal framework for the responsible sale of intoxicating hemp beverages.

The proposal includes a three-tiered distribution system covering product labeling, advertising, and trade-practice rules modeled after alcohol regulations. The bill would also set the minimum age for purchasing or consuming hemp products at 21 and create product testing requirements for the industry. There would also be a federal excise tax of 8 cents per milligram of intoxicating THC in each beverage.

The sale of hemp-derived THC is currently set to be prohibited under federal law starting this December.

“I’ve heard directly from people across North Texas who consume hemp-derived beverages, and businesses who sell them, that they need clarity, not a ban that pushes this market underground,” Rep. Van Duyne said in a statement.

“The Beverage Regulatory Parity Act brings long-overdue certainty to the industry by regulating these beverages with the same proven structure that has successfully governed alcohol for decades. I am glad to introduce this bipartisan legislation alongside Rep. Greg Landsman, because American families and responsible businesses deserve structure and sensible regulations that protect children while allowing adults to choose beverages they prefer.” — Van Duyne, in a press release

“There are people all over Southwest Ohio who have invested significantly in these products, and they’ve done so safely,” said Rep. Landsman. “Now the federal government is telling them they can’t sell these products anymore. Our bill is bipartisan and very straightforward. It will keep people safe and let these folks stay in business.”

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