Cannabis remains illegal in Wisconsin, yet anyone driving through commercial districts could easily assume otherwise. Shops advertising CBD and THC products have multiplied across the state, filling windows with colorful displays of gummies, oils, drinks, and vape cartridges. Many grocery stores and gas stations also carry similar items.
Their presence stems from a gap in federal law that allowed hemp products with trace levels of the psychoactive compound THC to be sold openly. That gap is now on track to close.
A policy change in 2018 removed hemp from the federal list of controlled substances. The move permitted a wide range of products that include THC, provided they came from hemp and stayed under a strict limit of 0.3% by dry weight. The change fueled a booming market that a national hemp organization values at roughly $28 billion.
President Donald Trump recently signed legislation to end the federal government shutdown. Tucked inside the measure was language that tightens the limit on THC levels in hemp products. Products containing more than 0.4 milligrams of THC would be barred, a standard that would rule out most products currently on store shelves. The new limit becomes enforceable in one year.
This sparked immediate concern among growers, manufacturers, and retailers in Wisconsin, who fear the move could wipe out a large share of their business. Still, some legal scholars say the reaction may be stronger than the situation warrants.
Robert Mikos, a professor at Vanderbilt University who studies drug policy, said the federal government lacks the capacity to enforce a sweeping crackdown on the wide network of companies that produce or sell these products. In his view, the future of the market will hinge largely on decisions made in states rather than Washington.
Efforts to create state-level oversight are already moving. As the House prepared to vote on the shutdown legislation, Wisconsin’s Assembly Committee on State Affairs reviewed a bipartisan measure that would set up a thorough regulatory structure for hemp products.
The proposal calls for mandatory testing and licensing, taxes similar to those on alcohol, and clear municipal authority. It also outlines an age requirement for purchasing and using these products, a licensing system for producers and retailers, and rules for packaging.
A separate proposal would revise Wisconsin’s definition of hemp to match the new federal standard. That measure is expected to face a veto from Governor Tony Evers.
Even so, Mikos said the industry is unlikely to face aggressive enforcement in the near future, even after the federal limit takes effect next year. He cautioned that small businesses could still encounter ripple effects involving taxes or federal permits. But he added that the risk of criminal penalties remains extremely low.
Marijuana companies, such as Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF), will be tracking how this change to federal law impacts companies that have been manufacturing THC products from hemp.
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