Congress is finally moving toward addressing laws tied to the marijuana industry after years of inaction. However, instead of expanding support—such as allowing marijuana businesses access to banking services, easing tax burdens, or opening up interstate trade—lawmakers are shifting their focus to restricting products made from hemp-derived THC.
Industry experts and lobbyists say a recent GOP-backed budget plan, introduced in the House and passed by a subcommittee, aims to outlaw products made with hemp-derived THC at the federal level. Even if the proposal doesn’t make it through Congress, it signals a turning point. Many in the industry now believe the relatively unregulated days of online sales and storefronts may be nearing an end.
According to Michael Bronstein, head of the American Trade Association for Cannabis and Hemp, it’s no longer a question of whether Congress will act, but when and how extensively.
The controversy picked up speed when Representative Andy Harris proposed a redefinition of “hemp” that would close what many view as a legal gap in the 2018 Farm Bill. Harris argues that the law has allowed for the unchecked sale of intoxicating hemp products—like delta-8 THC and THCA flower—via gas stations and websites, without oversight.
His amendment, which narrowly passed its first vote, seeks to ban high-THCA hemp flower and remove lab-created cannabinoids like delta-10 THC and THCP from the legal definition of hemp. If adopted, the change could force many hemp producers and sellers to shut down or drastically alter their businesses. Still, who would enforce such a ban and how effective it would be remains unclear.
Despite this push, Harris’ proposal faces significant challenges. Democrats are unlikely to support a bill that also includes heavy cuts to social programs. And given the narrow GOP majority in the House due to recent retirements, a bill that loses just a few Republican votes could be dead on arrival.
Moreover, states with large hemp farming industries like North Carolina and Kentucky may resist changes that could hurt their agricultural economies. Many lawmakers seem unwilling to upset the farmers and small businesses that invested heavily under the original Farm Bill.
Christopher Lackner, who leads the Hemp Beverage Alliance, said there’s confidence Congress won’t abandon the industry. He pointed out that President Trump, who signed the original Farm Bill, is still in office, which gives advocates hope.
Interestingly, Harris’ proposal has sparked unity among competing marijuana sectors. Instead of dividing hemp and marijuana stakeholders, it has brought them together in opposition. Liquor distributors, too, are backing hemp products to make up for falling alcohol sales.
Advocacy groups are now using this moment to better inform legislators about regulated hemp and the success of sensible rules in certain states. Meanwhile, many on Capitol Hill agree that the situation created by the 2018 bill needs fixing—but they’re wary of swinging the pendulum too far in the other direction.
Marijuana companies like Aurora Cannabis Inc. (NASDAQ: ACB) (TSX: ACB) from inside and outside the U.S. will be watching any decisions that federal lawmakers make on the hemp derivatives since this could have significant impacts upon the hemp and marijuana industries.
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