December 10, 2025
In mid-November, the U.S. Congress passed the Continuing Appropriations, Agriculture, Legislative Branch, Military Construction and Veterans Affairs, and Extensions Act, 2026 (H.R. 5371). The measure was signed by President Trump, ending the longest U.S. government shutdown in history. As evidenced by the length of the name, the bill encompasses a wide array of remits impacting a variety of sectors.
One particular addition quickly drew the attention of the hemp industry for its potential to significantly alter the sector’s future. The provision proposes to close the so-called “hemp loophole” in the 2018 Farm Bill. Unless corrective legislation is passed by November 2026, a significant portion of hemp products will be criminalized.
Key context
In 2018, Congress passed the Agriculture Improvement Act of 2018 (“2018 Farm Bill”), which legalized “hemp” under the definition of “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 delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.”
The 2018 Farm Bill did not regulate cannabinoids other than delta-9 THC, which created a “loophole” for manufacturers to create intoxicating products with other types of cannabinoids like delta-8, delta-10, and THC-O as long as the delta-9 tetrahydrocannabinol (THC) levels in those products were 0.3% or less by dry weight. This quickly led to a burgeoning hemp industry that is now estimated to be worth $28 billion.
However, this “loophole” means that hemp products face much less stringent regulations and oversight. There is no requirement for testing and concerns have emerged that the lack of Food and Drug Administration (FDA) oversight has resulted in unsafe products that may be contaminated with other chemicals, mislabeled, or have adverse side effects.
Changes under the Continuing Appropriations Act
The recently passed Act amends the 2018 Farm Bill definition of hemp to restrict total tetrahydrocannabinol concentration, not just the concentration of delta-9 THC, to no more than 0.3% on a dry weight basis. The new definition also excludes synthetic cannabinoids, which effectively serves to make delta-8 and THCA illegal under federal law.
In addition, the measure establishes a limit of 0.4 milligrams of total THC per container in a final hemp-derived product. This places the 0.3% dry weight limit for total THC concentration in conflict with the total allowable amount of THC per container. Producers will need to meet both thresholds.
The changes will have sweeping impacts for the food and beverage sector, as new hemp-infused product categories have emerged since 2018. This includes delta-8 gummies and other forms that have become popular as more Americans move away from alcoholic beverages to THC products.
Looking ahead
The new definition is set to go into effect on November 12, 2026. The hemp industry is trying to block the federal ban and instead pushing for regulations and oversight of the industry. This includes federal testing, labeling, and age-restriction rules. There are fears that if the ban is upheld, many hemp growers and manufacturers may turn to producing hemp products illegally, posing additional safety concerns.
A bipartisan group of Congressional members from South Carolina, Kentucky, California, and Indiana have introduced a bill that would repeal the federal ban under Section 781 of the Continuing Appropriations Act. Individual states are also taking varying approaches. Texas is moving forward with regulations for the hemp industry instead of a ban, while Ohio has advanced a bill to ban intoxicating hemp products in line with the new federal restrictions.
Food and beverage companies who grow, manufacture, or distribute hemp products or synthetic cannabinoids should closely monitor new developments at the state and federal levels. There are many scenarios that could emerge over the next year, including a patchwork of state laws regulating or banning hemp products, a reversal of the federal ban, or new federal regulations for the sector.
Businesses should assess their operations and begin preparing for how they need to adjust under the definitional changes included in the Continuing Appropriations Act.
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