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Following negotiations to reopen the federal government, the
U.S. Senate surprised the hemp industry when it quietly included
language that effectively bans all intoxicating hemp products
within one of the fiscal year 2026 appropriation bills, which was
signed into law by the President on November 12, 2025.
The bill, known as the Agriculture, Rural Development, Food and
Drug Administration, and Related Agencies Appropriations Act, is a
$26 billion spending package aimed at supporting American farmers,
food safety, FDA funding, and other priorities.
Section 781 of the bill redefines "hemp" by including
"industrial hemp" within the definition, but excludes
essentially all intoxicating hemp-derived cannabinoid products.
"Industrial hemp" means hemp grown for the use of the
fiber produced from the plant's stalk or any other
non-cannabinoid derivative or manufacture.
The ban encompasses any intermediate or final hemp-derived
cannabinoid product containing: (1) cannabinoids that are not
capable of being naturally produced by a cannabis plant; (2)
cannabinoids that are capable of being naturally produced by a
cannabis plant and are synthesized or manufactured outside the
plant; and (3) more than 0.3% combined total of
tetrahydrocannabinols and any other cannabinoids that have similar
effects as a tetrahydrocannabinol. In addition, any final
hemp-derived cannabinoid product may contain no more than 0.4
milligrams per container of total tetrahydrocannabinols or any
other cannabinoids that have similar effects as a
tetrahydrocannabinol. Tetrahydrocannabinolic acid (THCA) is
explicitly included within the definition of total
tetrahydrocannabinols.
This exclusionary language is very broad and applies to essentially
all intoxicating hemp products currently sold nationally, including
all hemp products that contain delta-8 THC, delta-9 THC, delta-10
THC, and THCA. The limitation of no more than 0.4 milligrams per
container of total tetrahydrocannabinols also effectively bans
spectrum CBD products because most contain more than that limit of
THC in some form.
Similar language was debated earlier this year in connection with
the new Farm Bill, which is still being negotiated, causing a
public rift between Kentucky's two Senators, Mitch McConnell
and Rand Paul, who are respectively for and against a national ban
on hemp cannabinoid products.
These provisions become effective one year after enactment, in
November 2026. That doesn't leave much time for hemp proponents
in Congress to work on a viable alternate regulatory model for
consumable hemp products. Prior similar legislative efforts have
all failed.
The hemp industry will surely reel from this sudden, unwelcome
development. Next November, most currently legal consumer hemp
products will become a federally controlled substance. Hemp
companies and their insurers should therefore begin preparing for a
likely market exit as it relates to those products. We expect lots
of confusion and uncertainty involved with unwinding a
multibillion-dollar industry in such a short time. Thousands of
companies have leases and long-term manufacturing, supply, and
distribution contracts that may or may not be cancelable based on
the change in law, force majeure, or some other defined basis. The
question of who bears the risk of products that intentionally or
inadvertently remain in the stream of commerce after the effective
date will likely plague the industry. Though not retroactive, the
ban also may have unforeseen impacts on existing litigation
involving hemp companies in state and federal courts across the
country.
Insurance companies must likewise decide how to underwrite risk in
this market between now and the effective date, including whether
renewal, nonrenewal, or rescission is the prudent course.
