Curaleaf Holdings had decided to step away from hemp. The New York-based cannabis multistate operator initially ran a hemp farm in Lexington, Kentucky, for its CBD product line starting in 2018. According to its annual filings, Curaleaf terminated its lease, stopped all hemp-related manufacturing and wholesale operations in Kentucky by the end of September last year and listed its assets for sale.
However, Curaleaf recently reentered the hemp business, following a larger cannabis industry trend for licensed businesses. The company introduced a new range of THC-derived hemp products on June 24, 2024, under The Hemp Co. brand.
The hemp-based, shelf-stable intoxication products, including drinks, candy and other items bearing the Curaleaf brand, are legal across 25 state lines and can be purchased online and through well-known retailers such as DoorDash.
Matt Darin, Curaleaf CEO, stated that there wasn’t a single “eureka moment” that influenced the company’s decision. According to him, spending time with legislators in Washington, where Farm Bill 2018 unintentionally legalized a national trade in hemp-derived THC, highlighted a key point: hemp is legal at the federal level, while cannabis is not.
Despite Curaleaf’s strong advocacy for marijuana reform, this legal distinction significantly influenced the company’s strategy. The shift mirrors a broader industry trend of large MSOs embracing hemp.
Curaleaf, as with a lot of big MSOs, is a member of the U.S. Cannabis Council, a D.C.-based lobbying group representing licensed cannabis businesses. The group wrote to federal lawmakers in April urging them to eliminate the loophole in Farm Bill 2018 that allowed hemp-derived cannabinoids to be sold legally across the country. The regulatory change hasn’t happened yet, though.
In response, instead of pushing for stricter regulations on intoxicating hemp products, which face less taxation and regulatory burden than state-legal cannabis, MSOs are entering the hemp market.
Alongside Curaleaf, Green Thumb Industries, based in Chicago, has granted hemp-derived company Urb a license to use its Incredibles edibles trademark.
Whether more companies will follow this path or focus on opening new recreational markets remains to be seen. For instance, Trulieve Cannabis Corp. (CSE: TRUL) (OTCQX: TCNNF) has invested more than $40 million in a recreational cannabis legalization ballot measure in Florida.
Meanwhile, Capitol Hill’s lax attitude toward hemp may be about to change. Representative Mary Miller (R) proposed an amendment in the House version of the Farm Bill in late May that would outlaw THC-containing edible hemp products.
While the GOP-dominated House Committee on Agriculture has progressed with a farm bill draft that includes this prohibition, neither the Democratic-controlled Senate nor the entire House of Representatives have seriously addressed it as of yet. It’s also unclear if Congress will approve a farm bill this year.
For now, the status quo permits the sale of THC products derived from hemp online and across state borders, with some state-specific restrictions. This ongoing opportunity for brand expansion remains highly attractive.
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