/>iThese are remarkable times in what has been a remarkable, albeit relative to other industries, remarkably short life cycle for the cannabis industry.
In such times, I am reminded of Rudyard Kipling’s words about how to face trying times:
If you can keep your head when all about you
Are losing theirs and blaming it on you,
If you can trust yourself when all men doubt you,
But make allowance for their doubting too;
If you can wait and not be tired by waiting,
Or being lied about, don’t deal in lies,
Or being hated, don’t give way to hating,
And yet don’t look too good, nor talk too wise
Make no mistake about it: Many are losing their heads about cannabis and blaming the cannabis industry. Many are doubting the cannabis industry and hating it. Can the cannabis industry keep its head, trust itself, wait, and not give way to hating during the most consequential debate about cannabis that has ever occurred in Congress?
So, what are the implications for the cannabis – and tangentially but directly the alcohol – worlds moving forward? Let’s dive in.
What Is the Farm Bill and Why Does It Matter?
First, a brief note on the most important piece of federal legislation regulating cannabis that Congress has passed in the last decade and is currently updating. The Farm Bill is a complicated, fascinating, and consequential piece of legislation. It governs everything from farm subsidies to food stamps to school nutrition and, as of 2014, even hemp.
I have written thousands of words and used many pop culture references to describe the debates about cannabis in statehouses around the country just this year. But it’s time to address the elephant in the room: Specifically, Congress is currently considering proposals that would render much of that discussion moot as it debates the hemp provisions of the upcoming Farm Bill. The consequences could hardly be more substantial for the cannabis and alcohol industries.
What’s This “Loophole” People Are Talking About?
If you’re an old hand in the cannabis space, you know what I’m talking about. If you’re just dipping your toes into this discourse, get ready to hear the term “loophole” to describe the growth of the American consumable hemp industry.
We’ve written in detail about the “loophole,” including most recently here:
Shortly after Congress created this separate definition of hemp, savvy (and, in some instances, unsavory) operators concluded that Congress had created a loophole of sorts that would allow for products that contained cannabinoids from the cannabis plant – even those with psychoactive or intoxicating effects – as long as the concentration of delta-9 THC on a dry weight basis is not more than 0.3%. It was this interpretation of the Farm Bill, replicated in the 2018 version, that led to the proliferation of consumable products containing delta-8 THC, delta-10 THC, and the like.
Ergo, the loophole.
Maybe this is all semantics. The current consumable hemp industry probably falls within the common understanding of a loophole, so maybe it depends on how any given critic or supporter of hemp uses the term “loophole.” Some use it derisively to minimize the legitimacy of the consumable hemp industry. Others recognize that Congress chose to use certain terminology and hemp operators should not be punished for following the law as written.
So, Which Is It?
On one hand, I very much doubt that most members of Congress gave a moment’s thought to the implications of the specific words used governing hemp in the 2018 Farm Bill. That is likely a result of the hemp provisions being two pages in a bill that was over a thousand pages long and the lack of understanding at the time how that language could lead to a new and now thriving industry.
On the other, this new and thriving industry is exactly what they allowed. And that brings us to the central question facing Congress as it considers the future of hemp policy in America: Having allowed for a new and thriving industry to develop over the past almost seven years – intentionally or not and explicitly or not – should Congress simply close the “loophole” and shut down the consumable hemp industry or should it allow certain consumable hemp operators to continue to do business under a much more stringent regulatory regime?
This is not a simple question. There are serious people on both sides of the issue, and there are seemingly nonserious people involved as well (hey, we get what we vote for).
Having permitted the development of the consumable hemp industry, intentionally or ignorantly, Congress now faces a simple yet extraordinarily important question: Should we simply close the “loophole” entirely and essentially end the consumable hemp market? Or should we acknowledge certain reliance interests by hemp operators and choose to keep a consumable hemp market in place and then enact strong regulations in as a guardrail to ensure that any such products are safe and available only to adults?
We previously wrote:
And that brings us to the next Farm Bill and what it may portend for intoxicating hemp products. Though the cannabis portion of the bill will make up a tiny percentage of the Farm Bill’s text and there are enormous consequences to so many other provisions of the massive legislation, one would be wrong to assume there isn’t a street fight occurring in Washington between marijuana operators and hemp operators. Tens of millions of dollars – at least – are being spent on lobbying efforts to influence federal cannabis policy. Lawmakers are regularly fielding questions from constituents and their local media about the proliferation of hemp in its various forms. This is going to come down to the wire, and the specific language (likely with tweaks imperceptible to the average American and even many in Congress) will have enormous consequences for the cannabis industry in America. Truly, the devil – ahem, ghost – will be in the details.
So, What Will Happen to the “Loophole”?
We have written:
At the end of the day, I suspect Congress will land on some sort of compromise that allows for at least some versions of intoxicating hemp products. If true, I would expect Congress to direct some agency or agencies to adopt regulations governing the manufacturing, testing, marketing, and sales of such products. Operators targeting children or making health claims aimed at vulnerable populations are in the most jeopardy, and purveyors of novel cannabinoids and high-THC products should be concerned as well. Low-THC products, including the increasingly popular hemp beverages, seem to have occupied a different place in the public eye and may be codified, albeit subject to more definite regulation.
If I’m right, marijuana operators won’t be completely satisfied, but neither will hemp operators. Maybe I’m just crazy enough to believe Congress can find a compromise.
Recent developments have cast doubt on my prediction – even though I stand by it:
On June 5, 2025, the House Agriculture Appropriations Subcommittee voted to send a markup for an FY2026 appropriations bill to the full committee. The full House Appropriations Committee began consideration of the draft bill on June 11 but postponed a final vote. Among its many provisions, the draft bill includes a provision that effectively would prohibit the commercial production, sale, and distribution of certain hemp-derived cannabinoid products.
…
The draft appropriations bill would expand on the existing statutory definition of hemp to include industrial hemp products and exclude hemp-derived cannabinoid products (§759). The provision would define these two terms as follows:
- Industrial hemp would be defined to mean hemp grown for “non-cannabinoid” uses, including for fiber or for grain/seed (e.g., use as a whole grain, oil, cake, nut, or hull) or for immature plants (e.g., microgreens or other edible hemp leaf products), as well as hemp grown for research purposes or as a viable seed to produce industrial hemp.
- Hemp-derived cannabinoid product would be defined to mean “any intermediate or final product derived from hemp (other than industrial hemp), that … contains cannabinoids in any form; and … is intended for human or animal use through any means of application or administration, such as inhalation, ingestion, or topical application.”
Excluding hemp-derived cannabinoid products from the federal definition of hemp would prohibit production and sale of certain hemp-derived cannabinoids, derivatives, and extracts. Excluded cannabinoids would cover also non-naturally occurring and synthesized or manufactured compounds. The proposed provision would make other changes to the hemp definition by changing the allowable limits of THC — the leading psychoactive cannabinoid in the cannabis plant — to be determined on the basis of its total THC, including tetrahydrocannabinolic acid (THCA), instead of delta-9 THC.
When Will Congress Act?
Never an easy question and if I knew when Congress was going to act on any particular piece of legislation, I would be tanning on a beach instead of writing cannabis blog posts.
Here’s what we know. The 2018 Farm Bill was set to expire on September 30, 2023, in keeping with the general tradition of farm bills governing four to five years before a new farm bill was enacted. September 2023 has obviously long passed, and yet there has not been a new farm bill passed by Congress (or even voted on by both chambers of Congress). Instead, Congress has passed a series of continuing resolutions that allowed provisions of the 2018 Farm Bill to remain in place pending a new farm bill.
As of this writing, the House of Representatives seems to be more focused on the next farm bill than the Senate. As discussed above, the House Appropriations Committee is currently considering a proposed farm bill. If that bill is voted out of committee, the next step would be the full House floor, assuming that House leadership chooses to take that step. Once on the House floor, there will be opportunities for the full House to propose amendments to the bill before voting on it. If, for the sake of this discussion, the House of Representatives passes a farm bill, it will go to the Senate for its consideration.
In the Senate, there is a companion farm bill proposal that will need to travel a similar path – from subcommittee(s) to committees(s) and then for approval by the full Senate. If the full Senate approves the bill and it’s not identical to the House version – and that is almost certain to be the case given the complexities of a farm bill – it will go to a conference committee of House and Senate members. If that conference can agree to a single bill, it must then be passed by the full House and full Senate before it is sent to the president for signature.
We’ve miles to go before anything goes to the president. It would be a surprise if a bill left Congress in 2025 and far more likely to do so in 2026.
Does This Impact the Marijuana Industry?
Whether you believe congressional action on hemp will be a net positive or negative to the marijuana industry likely depends on whether you believe hemp and marijuana are operating in a zero-sum game or whether you believe that a regulated consumable hemp market will create a sort of rising tide effect that will socialize cannabis as a whole to the general public and, as a result, a liberalization of hemp will benefit marijuana companies. For those in the former camp, the concern is that cannabis consumers will choose to purchase cannabis from hemp operators because there are fewer rules and regulations that can make the buying experience at a marijuana dispensary more cumbersome than at a hemp shop. The latter camp believes that hemp can be a way for an average American to become introduced to the cannabis plant through products such as low-dose beverages and then grow more comfortable incorporating other cannabis products – including, where appropriate, marijuana – into their regular routines.
For the latter camp to have any real credibility, it should concede that hemp and marijuana should be placed on as close to a level playing field as possible.
For those who believe every sale of a consumable hemp product is a missed opportunity by the marijuana industry, their reluctance to allow more consumable hemp is understandable. I happen to believe that a more robust hemp industry — albeit stringently regulated as never before — will benefit both sides. In my view, let the people determine that regulated hemp-derived cannabis products marketed to adults are a pathway towards a broader understanding of the cannabis plant generally and how regulated hemp and marijuana can both play a role to the other’s benefit.
Does This Impact the Alcohol Industry?
When it comes to alcohol, I think it’s a simpler but more complicated question. There is compelling evidence that all age markets, but particularly the coveted younger adult market, are turning to cannabis over alcohol. This trend is particularly true when it comes to cannabis-derived edibles (“gummies”) and cannabis-infused beverages. Gummies have been successful and prevalent for a number of years (likely as legacy products from the cannabis prohibition era), and cannabis beverages have exploded onto the broader consumer market with eye-popping financial projections.
When it comes to distributors and retailers, it’s possible they don’t necessarily have a horse in the race. If hemp beverages are legitimized and regulated, they can allocate their offerings according to consumer demand; if alcohol continues to lose market share to hemp beverages, they can offer more hemp beverages to offset the decreased demand for alcoholic beverages. And if hemp beverages are illegal, they can go back to pushing alcohol as king.
Conclusion
There is nothing short of the future of the cannabis industry and anyone who does business with or against the cannabis industry at stake. And make no mistake, that includes companies ranging from hemp and marijuana operators to gas stations and grocery stores and to companies providing ancillary services to all of the above (including yours truly).
Rarely are there instances where Congress considers legislation that could, with the stroke of a presidential pen, destroy an entire industry. And perhaps its even more rare that we can see it happening in real time and recognize the consequences. Perhaps that’s why the battle is so fierce – it truly is an existential question for many cannabis stakeholders.
As Congress considers various proposals, I hope it will keep in mind the words of Robert Plant:
Yes, there are two paths you can go by, but in the long run
There’s still time to change the road you’re on.
Thanks for stopping by.
