The long-running battle over the future of the US hemp industry has become an unlikely flashpoint in efforts to end the longest government shutdown in history.
As the federal government shutdown enters its 41st day, causing economic chaos, cuts to food aid, delayed services and the grounding of thousands of commercial flights, bipartisan efforts to reach a compromise passed through the Senate by the tightest of margins on Monday (November 10)
Senators voted 60-40 to approve HR 5371, the ‘Continuing Appropriations and Extensions Act, 2026’ yesterday, seeing the resolution receive the exact number of votes (60) needed to pass, meaning it will now head to the House for a vote, possibly as early as Wednesday.
While much of the days-long debate to get this far has focused on healthcare subsidies demanded by Democrats, the sweeping funding bill will have major consequences for the country’s thriving hemp industry, and the issue could yet become a major roadblock to getting the legislation passed.
What’s in the bill?
A provision buried deep within the 144-page FY 2026 Agriculture, Rural Development, Food and Drug Administration and Related Agencies Appropriations Bill, colloquially known as the ‘hemp-killing clause’, would effectively outlaw the majority of the United States’ $30 billion intoxicating hemp market.
The measure, which amends the federal definition of hemp under the Agricultural Marketing Act of 1946, seeks to close the so-called ‘hemp-loophole’ created by the 2018 Farm Bill that allowed psychoactive hemp-derived cannabinoids such as delta-8 THC, HHC, and THCA to proliferate across the country.
These compounds, often synthesised from cannabidiol (CBD), have fuelled an unregulated consumer market that competes directly with state-licensed cannabis businesses and has drawn sustained scrutiny from lawmakers and public-health advocates.
Efforts to federally regulate this ‘wild west’ of new cannabinoid compounds as part of the wider funding bill have been ongoing since mid-2024, but the latest updated language goes even further.
Crucially, it seeks to ensure that it futureproofs the definition, preventing any newly developed compounds from slipping through another ‘loophole’, while taking steps to protect the non-intoxicating hemp industry (though the industry is still concerned about blanket restrictions).
The latest iteration of the FY 2026 agriculture spending bill represents a fundamental rewrite of federal hemp law, replacing the 2018 Farm Bill’s narrow focus on delta-9 THC with a broader, more restrictive framework.
From Delta-9 to Total THC: The 2018 Farm Bill defined hemp as Cannabis sativa L. and its derivatives containing no more than 0.3 per cent delta-9 THC on a dry-weight basis. The new bill extends this limit to “total tetrahydrocannabinols (including tetrahydrocannabinolic acid, or THCA)”, ensuring all potential psychoactive components are captured in the calculation. This change eliminates the legal grey area that allowed high-THCA flower and chemically converted cannabinoids such as delta-8 THC to qualify as hemp.
“‘Hemp’ means 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.”
Reversal of the ‘Any Detectable’ Standard: Earlier House and Senate drafts would have outlawed products containing any detectable or quantifiable amount of THC, a threshold that would have rendered even trace amounts illegal. The compromise bill restores the numerical 0.3 per cent limit, aligning with the original Farm Bill, but expands its scope to include every form of THC and any cannabinoid with similar effects.
“Within one year of enactment, the weight would apply to total THC—including delta-8 and other isomers… Legal hemp products would be limited to a total of 0.4 milligrams of total THC or any other cannabinoids with similar effects.”
Addition of a 0.4mg Cap Per Container: A new consumer-product threshold stipulates that any finished product containing more than 0.4 milligrams of total THC or THC-like cannabinoids per container will fall outside the legal definition of hemp. This effectively bans most full-spectrum and broad-spectrum consumable products, which typically contain trace THC above that level.
“Any final hemp-derived cannabinoid product containing… more than 0.4 milligrams combined total per container of total tetrahydrocannabinols (including tetrahydrocannabinolic acid) and any other cannabinoids with similar effects (or marketed to have similar effects) shall not be considered hemp.”
Explicit Ban on Synthetic and Converted Cannabinoids: The bill introduces categorical exclusions for cannabinoids “synthesised or manufactured outside the cannabis plant”, closing the CBD-to-delta-8 conversion loophole that has driven much of the intoxicating hemp market.
“The term ‘hemp’ does not include … any intermediate hemp-derived cannabinoid product that contains—
(i) a cannabinoid that is not capable of being naturally produced by the Cannabis sativa L. plant; or
(ii) a cannabinoid that is capable of being naturally produced by the Cannabis sativa L. plant but that is synthesised or manufactured outside of that plant.”
Creation of a ‘Similar Effects’ Standard: For the first time, hemp products will be evaluated not only by chemical composition but by effect. Any cannabinoid that produces, or is marketed to produce, psychoactive effects similar to THC may be treated as an intoxicant and excluded from the hemp definition, subject to determination by the Secretary of Health and Human Services.
“… more than 0.3 percent combined total tetrahydrocannabinols (including tetrahydrocannabinolic acid) and 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).”
Narrowing of Legal Hemp Uses: ‘Industrial hemp’ is now restricted to non-intoxicating applications—such as fibre, seed, and research, while consumable cannabinoid products are carved out as a separate, regulated category.
“‘Industrial hemp’ means hemp used only for—
(A) stalks for fibre or other non-cannabinoid derivatives…
(B) seeds used for grain, oil, cake, nut, hull, or other non-cannabinoid products;
(C) immature plants used for microgreens or edible leaves (from low-THC seeds);
(D) plants used solely for research…; and
(E) viable seeds produced only for the above materials.”
One-Year Grace Period and FDA Oversight: Implementation will occur 365 days after enactment, giving producers limited time to adapt. Within 90 days, the FDA must publish lists of naturally occurring cannabinoids and those with THC-like effects, effectively defining the boundaries of legal production and trade.
“Within 90 days of enactment, the Secretary of Health and Human Services, acting through the Commissioner of Food and Drugs, shall publish—
(1) a list of all cannabinoids known to FDA to be capable of being naturally produced by a Cannabis sativa L. plant…
(2) a list of all tetrahydrocannabinol-class cannabinoids known to the agency to be naturally occurring in the plant; and
(3) a list of all other cannabinoids known to FDA to have or marketed to have similar effects to tetrahydrocannabinol-class cannabinoids.”
In short, while the numeric THC limit remains 0.3 per cent, the expanded definition of what counts as THC, combined with new potency caps, synthetic bans, and ‘similar effects’ language, means the vast majority of hemp-derived cannabinoid products that are currently legal would no longer qualify as hemp once the new rules take effect.
Hemp could hold up the process
Republicans currently hold a 53-47 majority in the Senate, and eight Democrats are understood to have broken ranks to get the bill over the 60-vote threshold.
However, one Republican senator, Kentucky’s Rand Paul, voted against the bill, citing the redefinition of hemp as the reason.
Paul sought a floor vote on his one-page amendment to strike the provision redefining hemp under federal law, seeking to effectively preserve the status quo established by the 2018 Farm Bill. The amendment failed in a 76-24 vote, with only Sen. Ted Cruz (R-TX) and 22 Democrats joining Paul in support.
The Kentucky senator’s objection delayed Senate leaders’ efforts to end the record-long 41-day government shutdown.
“I’m not looking to hold things up,” Paul told reporters. “My goal is to condense the time, have one vote, express my displeasure with them screwing up an entire industry, and people will feel there’s at least been somebody fighting.”
Paul has accused Senate Minority Leader Mitch McConnell, also of Kentucky, and Rep. Andy Harris (R-MD), both senior appropriators, of inserting the hemp restrictions into the funding package without sufficient consultation.
McConnell, who championed hemp’s federal legalisation in 2018, has reportedly pushed for tighter limits to close the loopholes that allowed intoxicating products like delta-8 THC and HHC to proliferate nationwide.
Paul believes the provision would go far beyond its stated aims, arguing that ‘every hemp plant in America will have to be destroyed’.
“Every hemp seed in America will have to be destroyed, and 100 per cent of the hemp products that are sold will no longer be allowed to be sold.”
Despite Paul’s efforts, the Senate ultimately advanced the funding package, including the controversial hemp language, sending it to the House of Representatives for consideration.
The US Hemp Roundtable said it strongly opposes this new definition, arguing it would effectively ‘recriminalise’ the plant and destroy the industry.
“If passed, this legislation would wipe out 95% of the industry, shuttering small businesses and American farms while costing states $1.5 billion in lost tax revenue,” it said in a statement.
“Despite misleading claims this language protects non-intoxicating CBD products; the reality is that more than 90% of non-intoxicating hemp-derived products contain levels of THC that are greater than the proposed cap of .4 mg per container.
“If the language passes, as-is, the hemp industry is committed to continuing the fight. During the one-year proposed moratorium, US Hemp Roundtable will work closely with lawmakers to reverse the ban and replace it with responsible, science-based regulations that crack down on misleading and purely synthetic products, create restrictions that keep products out of the hands of children, and promote standard manufacturing practices.”
