Bill To Reopen Federal Government Could Send Hemp Industry Up In Smoke

Reopening the federal government could close the door on the national hemp industry, which is worth $8B and occupies millions of square feet in Texas alone.

Language included in the continuing appropriations and extensions act, which was designed to end the longest government shutdown in U.S. history, will effectively outlaw nearly all hemp products containing tetrahydrocannabinol, or THC, nationwide.

Although the ban wouldn't go into effect for a year, the chances of it being overturned in that time are very slim, according to Brandon Dorsky, a California attorney who has practiced in the cannabis field since 2009.

“It would have to be the passion project of a politician that's willing to die on the hill for it,” Dorsky said. “And there's, in my opinion, only one of those — his name's Rand Paul.”

The junior senator from Kentucky introduced an amendment Monday to remove the provision he said would “regulate the hemp industry to death” and “cancels the collective decisions of hemp consumers and destroys the livelihoods of hemp farmers.”

The amendment was blocked by a margin of 76-24, with Paul and Texas Sen. Ted Cruz as the only Republicans who voted in favor of it.

Cruz wrote on X that the regulation of hemp and marijuana products should be left up to individual states.

“A one-size-fits-all federal standard will undoubtedly create unintended consequences that harm consumers,” he said.

Marijuana is strictly illegal in Texas, except for medical use, but the hemp retail industry began booming there and elsewhere when the 2018 federal farm bill kicked open the door to hemp-derived products, including those with intoxicating effects. The bill removed hemp with 0.3% or less concentration of THC — the active ingredient that produces a high — from the Controlled Substances Act’s definition of marijuana.

The Texas Legislature attempted to outlaw the sale of THC-containing hemp products in its session this year, with Lt. Gov. Dan Patrick leading the charge. 

Patrick said a ban is necessary to prevent young people from getting “hooked on dangerous drugs.”

Landlords and hemp industry advocates pleaded with lawmakers to reconsider, arguing, among other points, that a regulated industry is safer than a black market.

Gov. Greg Abbott vetoed the state bill at the last minute, in a happy surprise for the more than 8,500 hemp-cannabinoid businesses that operate in Texas. 

Texas’ hemp-cannabinoid businesses occupy millions of square feet. In the Greater Houston area alone, hemp retailers occupy enough real estate to fill the Toyota Center.

The industry generates around $8B in revenue each year in Texas, the Houston Chronicle reported. More than 50,000 Texans are employed in the industry, according to Whitney Economics. Its licensed retailers include big names like H-E-B.

The hemp ban was included in the spending bill because of “bad actors” increasing the concentration of THC in their products, Paul said. The hemp industry offered to compromise and even eliminate synthetic cannabinoids, but he said those pleas fell on deaf ears. 

The bill’s language will make any hemp product that contains more than 0.4 milligrams total of THC per package illegal. Paul said the change to the federal definition of hemp would eliminate 100% of the hemp products in the U.S. and effectively nullify all state laws concerning the matter. 

“The limit is so low that the products intended to manage pain or anxiety will lose their effect,” Paul said. 

While lobbying efforts by the hemp and cannabis industry will kick into high gear to overturn the ban, Dorsky said they will likely face pushback from interests that don’t want these items to be legal. 

“The prison lobby, the alcohol lobby, the insurance lobby and the pharmaceutical lobby all have an interest in these products being illegal,” Dorsky said. “And they have much deeper pockets.”

Despite the dim outlook, the Texas Hemp Business Council isn’t giving up the fight to save the industry in the Lone Star State. 

“Hemp is too vital to the American economy and to the livelihoods of millions to be dismantled by rushed, politically driven legislation,” the organization said in a statement.

“As we proved in Texas, we will continue to pursue every legal and legislative option to overturn these harmful provisions and restore a fair, science-based system that continues to protect minors, ensure product safety and preserves the economic opportunities Congress created in 2018.”