What It Means for the Intoxicating Hemp Industry
President Donald Trump signed legislation late Wednesday night, November 12, 2025, officially ending the longest government shutdown in United States history. But along with reopening the government, the new law delivers a seismic shift for America’s hemp industry. Hidden deep within the 141-page spending package is a provision that redefines hemp in a way that will make most intoxicating hemp-derived cannabinoid products illegal beginning in late 2026.
The law, known as the Continuing Appropriations, Agriculture, Legislative Branch, Military Construction and Veterans Affairs, and Extensions Act, 2026 (H.R. 5371), funds the federal government through January 30, 2026, and includes three full fiscal year appropriations for agriculture, military and veterans affairs, and the legislative branch. Within its agriculture section lies Section 781, a provision that quietly rewrites Section 297A of the Agricultural Marketing Act of 1946 (7 U.S.C. §1639o) and narrows the definition of hemp that was originally established under the 2018 Farm Bill.
On Wednesday evening, the House of Representatives voted 222 to 209 to pass the Senate-approved funding bill. The Senate passed the legislation earlier in the week, and following the House vote, President Trump signed it into law later that night, ending a forty-three-day government shutdown. The vote largely followed party lines, with only two Republicans, Representatives Thomas Massie of Kentucky and Greg Steube of Florida, voting against it. Six Democrats voted in favor of the measure.
Representative Massie opposed the legislation specifically because of its hemp-related provisions, warning that the new definition would destroy an entire industry in his home state. In an interview with Spectrum News, he said that hemp farmers in Kentucky were “devastated” and that the new definition would “kill an industry” that had provided a vital source of income for agricultural communities. Senator Rand Paul of Kentucky echoed Massie’s concerns in the Senate earlier that week, where he attempted to introduce an amendment to strike the hemp provision entirely. His proposal was tabled after Senate leaders insisted that altering the language would delay passage of the funding package and prolong the shutdown.
At the center of the controversy is Section 781 of the new law. It amends the Agricultural Marketing Act’s definition of hemp, which previously allowed any part of the cannabis plant and its derivatives so long as the concentration of delta-9 tetrahydrocannabinol (“THC”) did not exceed 0.3 percent on a dry-weight basis. That definition opened the door for hemp-derived cannabinoids such as Delta-8 THC and Delta-10 THC, compounds that can be synthesized from CBD and that produce intoxicating effects similar to marijuana. Because these products contained less than 0.3 percent delta-9 THC, they were considered legal under the 2018 Farm Bill and quickly flooded the market.
The new law changes that. Under Section 781, hemp is still defined as Cannabis sativa L. and any part of that plant, including its seeds and derivatives, as long as the total tetrahydrocannabinol concentration, including tetrahydrocannabinolic acid (“THCA”), does not exceed 0.3 percent on a dry-weight basis. However, the provision adds a new set of exclusions that dramatically narrow what qualifies as hemp. It specifies that hemp does not include viable seeds from a plant exceeding the 0.3 percent THC threshold. It also excludes any intermediate hemp-derived cannabinoid products that contain cannabinoids not capable of being naturally produced by the plant, cannabinoids that are capable of being naturally produced but were synthesized or manufactured outside the plant, or products containing more than 0.3 percent combined total THC and other cannabinoids that have similar effects on humans or animals.
The law further excludes intermediate hemp-derived cannabinoid products that are marketed or sold as final products for consumer use, as well as final hemp-derived cannabinoid products containing cannabinoids not capable of being naturally produced by Cannabis sativa L., cannabinoids manufactured outside the plant, or more than 0.4 milligrams combined total per container of THC, including THCA and any other cannabinoids that have similar or marketed-as-similar intoxicating effects. The Secretary of Health and Human Services is authorized to determine which cannabinoids fall under that definition of “similar effects.”
The new definition is set to take effect 365 days after enactment, meaning the changes will become enforceable on November 13, 2026. The U.S. Food and Drug Administration has 90 days to publish a list of natural and synthetic cannabinoids and to provide an official definition for the term “container.”
By amending 7 U.S.C. §1639o, Congress effectively closes what has been called the “intoxicating hemp loophole.” This loophole emerged after the 2018 Farm Bill legalized hemp and its derivatives, allowing companies to extract and modify cannabinoids from hemp into psychoactive compounds that mimic THC. Those products, including Delta-8 THC and Delta-10 THC, quickly gained popularity, especially in states where marijuana remains illegal.
Supporters of the new definition, including Senate Minority Leader Mitch McConnell, who authored the hemp legalization language in the 2018 Farm Bill, argue that this change is long overdue. McConnell said that the rise of unregulated hemp-derived intoxicants creates public health concerns, undermines drug enforcement, and exposes minors to THC-laced products outside of licensed cannabis markets.
Critics, however, argue that the new definition goes too far and threatens the livelihoods of thousands of farmers and small businesses. The U.S. Hemp Roundtable, a leading advocacy organization, estimates that the new restrictions could eliminate more than 95 percent of all hemp-derived products currently available, potentially putting 300,000 jobs and $1.5 billion in state tax revenue at risk. The organization launched a campaign titled “365 Days to Regulate, Not Ban,” urging Congress to use the one-year delay to replace the prohibition with a regulatory framework that would allow the sale of hemp-derived products under strict labeling, testing, and age restrictions.
The political debate reflects broader divisions over how to handle cannabis-related products at the federal level. While cannabis remains a Schedule I controlled substance under federal law, 40 states legalized medical marijuana programs, and 24 states approved adult-use cannabis. This patchwork of laws left hemp-derived cannabinoids occupying a legal gray area, one that Section 781 now seeks to eliminate entirely.
While this new legislation establishes strict rules for hemp-derived cannabinoid products, it does not automatically invalidate state-level hemp programs. States such as New York and New Jersey can continue to independently regulate hemp cultivation, processing, and sale. However, under the Supremacy Clause, federal law can preempt state law if they allow products that are prohibited at the federal level. This means states may maintain their regulatory frameworks, but any hemp products that violate the new federal THC limits or synthetic cannabinoid restrictions could face federal enforcement, particularly in interstate commerce, once the legislation becomes effective. Until then, this new legislation does not directly impact these state level hemp programs.
For now, the intoxicating hemp industry faces a countdown. Businesses have one year to adapt to the new definition or risk being pushed out of the market entirely. The coming months will determine whether Congress acts again to replace prohibition with regulation or whether an entire sector of the hemp economy, built in the wake of the 2018 Farm Bill, will vanish by November 2026.
Mandelbaum Barrett PC’s Cannabis, Hemp & Psychedelics attorneys stand at the forefront of a dynamic and ever-evolving legal landscape. We possess a detailed understanding of laws associated with the production, sale, use, and regulation of a broad range of controlled substances — from cannabis and hemp to psychedelics.
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The information provided in this post is for general informational purposes only and does not constitute legal advice. While we strive to ensure the accuracy and timeliness of the content, laws and regulations frequently change, and the information may not reflect the most recent developments. If you require legal advice or assistance, please contact Joshua Bauchner or Natalie Diaz.