Steven Brown, the CEO of Nothing But Hemp, believes that THCA flower is legal under federal law due to Farm Bill 2018. But even though his company runs 11 stores across two states and offers a wide range of hemp-derived products, you won’t find THCA flower on his shelves—or his website.
Why? The legal environment is changing fast. More states without legal recreational cannabis are updating their laws to treat THCA flower the same as traditional marijuana, making it illegal under state law.
Some legal experts maintain that THCA is still permitted under current federal law. But as states give law enforcement the green light to treat THCA like cannabis and seize it, business owners like Brown are backing off.
A notable incident happened in Tennessee in 2024 when police confiscated a large batch of what they believed to be cannabis. However, since THCA wasn’t specifically addressed in the state’s laws at the time, the authorities ended up paying $735,000 in damages to two hemp companies after the seized products went bad. That situation is unlikely to repeat after January 1, 2026 when a new law will go into effect redefining THCA as a form of THC.
Texas is following a similar path. In May, legislators passed a measure tightening the definition of THC. Though the bill is awaiting the governor’s signature, hemp industry supporters have submitted over 118,000 signatures urging a veto.
Neither Texas nor Tennessee has legalized medical cannabis, making them key markets for hemp-derived alternatives. Critics of the new bans argue they will only drive consumers toward the unregulated market and jeopardize thousands of compliant businesses.
Much of the confusion stems from a loophole created by the Farm Bill 2018, which set a THC limit of 0.3% by dry weight but didn’t account for THCA, which converts into THC when heated. Although federal guidelines require that THCA be included in THC testing through a heating process, enforcement has been spotty. According to cannabis attorney Rachel Gillette, this has led to widespread mislabeling and inconsistent regulation.
Federal lawmakers know this issue exists and may address it in the next Farm Bill. But that legislation is already long overdue, leaving regulation to the states for now.
Tennessee will still permit hemp-derived THC drinks, which are distributed by businesses like Brown’s and even major cannabis companies. Observers say this highlights a strange inconsistency: while smokable flower is banned, edibles and beverages remain okay.
Some companies are pushing boundaries regardless. Some businesses in Oregon, where cannabis is cheap due to oversupply, continue to ship THCA flower to states where it’s prohibited. One Maryland-based firm, SuperGreens Hemp Co., recently announced the purchase of 36 THCA farms nationwide, including in states with restrictive cannabis laws.
There’s barely any oversight beyond the point of cultivation, which Gillette calls a “huge gap in enforcement.” With thousands of shops and online sellers, it’s nearly impossible to crack down on them all. Instead, states might go after a few big names to send a warning.
Many agree that the demand for hemp-based THC is driven by federal cannabis prohibition and strict state laws. Hemp is cheaper to produce, faces fewer rules, and attracts entrepreneurs wary of heavy regulation. That’s why some push for crackdowns—to level the playing field with licensed cannabis businesses.
But Brown isn’t switching lanes. “I’ve built a company that’s nearly eight figures,” he said. “There’s no way I’m touching state-regulated cannabis. Too many headaches. Too much risk.”
The marijuana industry, including leading firms like Green Thumb Industries Inc. (CNX: GTII) (OTCQX: GTBIF), will be following how the THCA regulatory landscape unfolds across the country as it could impact the trajectory of the marijuana industry.
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