OMAHA (DTN) -- Hemp farmers and the hemp-products industry now have essentially a year to convince Congress and federal regulators to find an alternative to legislation passed this week that they warn could destroy a growing industry.

The funding bill passed this week by Congress rewrites the 2018 farm bill's provisions on hemp to end the unregulated sale of hemp-based products, including Delta-8 tetrahydrocannabinols (THC). The bill would limit cannabinoids to 0.4 milligrams combined per container.

Typically, products such as hemp-derived drinks or edibles will have 2-10 mg of THC, though some products can go significantly higher.

The provision was added to the funding bill by Sen. Mitch McConnell, R-Ky., even though McConnell was the driving force for allowing nationwide production of hemp through provisions in the 2014 and 2018 farm bills. McConnell said his work to develop an agricultural hemp industry was not meant to open the door for the sale of intoxicating hemp products.

But the 2018 farm bill did create an open market for THC and CBD products that industry groups say have grown into a $28 billion industry. At the same time, law enforcement and others say the provision created an unregulated market of THC products now sold nationwide.

In October, the National Association of Attorneys General sent a letter to Congress from a bipartisan group of 39 AGs calling on Congress to clarify the definition of hemp. The AGs cited a flood of THC products that have hit the market and are sold nationally. "Congress never meant to legalize these products in the 2018 Farm Bill," the AGs wrote. "A proper interpretation of the Farm Bill's hemp provision demonstrates that the entire synthetic THC industry rests on a foundation of illicit conduct."

Hemp farmers and industry groups say the 0.4 mg standard is entirely too low and would remove most non-intoxicating products from the market as well. Under the provision, the Food and Drug Administration must also come out with a rule on cannabinoids and container services.

Senators voted 76-24 to keep the provision in the funding bill this week despite a push by McConnell's fellow GOP Kentucky Sen. Rand Paul. On the Senate floor, Paul said the provision will shut down the hemp industry across the United States. The new provision also overrides 23 state laws and "destroys the livelihood of hemp farmers," Paul said during the floor debate, as he pointed to financial challenges facing farmers growing commodity crops.

"For many farmers, hemp has proven to be a lifeline, a new cash crop."

The new provisions, Paul said, would make illegal nearly every hemp product now on the market. "That amounts to an effective ban," Paul said.

The bill also now affects roughly 8,000 farmers who grow hemp nationally.

Adam Kline, a farmer in Gas City, Indiana, and his father Jim Kline, have been growing hemp since the 2018 farm bill went into effect.

"We were looking for a way to diversify. Some people add livestock or other value-added crops. This is our value-added crop," Adam Kline said in an interview with DTN.

The Klines have gone from growing hemp to creating their own vertically integrated business, Heartland Harvest Processing, which extracts the cannabinoids and purifies hemp ingredients to make hemp-derived beverages.

"All of this capital infrastructure and investment we've put into this business and the legislation makes us illicit employers," Adam Kline said. He added, "We had gotten to the point this was a stand-alone business with really high potential for job growth."

It's only been passed into law since Wednesday, but Kline said his company is already starting to see some retailers back off on orders.

"This has certainly chilled the market. We have had some retailers who said they are going to hold off on buying," Kline said.

He added, "The way it was done puts us on our heels to not be criminals on this a year from now. It's a less-than-desirable position to be in."

The U.S. Hemp Roundtable declared on Thursday that the industry has "365 days to regulate, not ban" hemp products. Without a fix, products would be banned on Nov. 13, 2026. The group indicated Rep. Morgan Griffith, R-Va., plans to introduce a bill that would create "robust regulation" of hemp products rather than an outright ban, "exactly what we have been advocating for!" A similar bill also could be introduced by Oregon's senators.

At the same time, the National Hemp Association supports McConnell's provision, which would still allow the industrial hemp industry to grow for "fiber, grain and seed" to expand the use of industrial hemp products.

USDA's National Agricultural Statistics Service (NASS) issued a hemp report last April showing the value of hemp production in 2024 was $445 million. The report cited about 45,000 acres of open production, as well as hemp being grown under 3.5 million square feet of warehouse production. The report had production details from 8,153 producers who grow the crop.

Joseph Calderone, president of the Cannabis Farmers Alliance, warned the new provision could dismantle much of the industry around hemp-derived beverages and extracts. That threatens thousands of jobs, but also undercuts small farmers who were already operating within federal law.

"This isn't just a policy tweak -- it's a seismic shock to an industry that employs tens of thousands of Americans," Calderone said. "For small farmers, hemp-derived beverages and extracts were our only lifeline after the CBD market collapsed. With one paragraph in a budget bill, Washington may erase years of investment and innovation."

The Cannabis Farmers Alliance would like to see the farm bill standard of 0.3 THC by dried weight raised to allow a 1% THC limit for hemp. The group also wants the federal government to recognize adult-use cannabis as a legitimate counterpart to beer, wine and other alcohol.

"If this administration truly wants to show it's pro-business, it should demonstrate that by finally legalizing and regulating cannabis nationwide," Calderone said.

Industry members such as Kline said the legislation also doesn't have public support, but it was rushed into the funding bill without debate.

"We were effectively pitted against the military, air-traffic controllers and people on SNAP to end the government shutdown," Kline said, who said the legislation hit the industry "with a sledgehammer instead of a scalpel."

Also see, "CBD Oil Business Model Is Challenging," https://www.dtnpf.com/…

Chris Clayton can be reached at Chris.Clayton@dtn.com

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