For the first time in six years, the U.S. is preparing to tighten rules on cannabis seeds after lawmakers inserted a last-minute clause into the recent federal spending package that reopened the government. Industry specialists warn that the change could wipe out the domestic seed market and reverse years of lenient oversight.
Marijuana seed producers have operated with relatively few restrictions since 2018. The shift followed the passage of the farm bill that year, which treated any plant material with less than 0.3% delta-9 THC as hemp. Since the seeds contain only trace amounts of the psychoactive compound, they were effectively removed from the Controlled Substances Act.
That interpretation became even clearer in 2022 when the DEA confirmed that cannabis seeds meeting the low-THC threshold are legally considered hemp, even if the plants that grow from them might later contain higher levels of THC.
The clarification allowed most states to permit seed sales and shipping without triggering narcotics laws. Companies have been able to import and sell seeds without special authorization, creating what many describe as the world’s most active seed marketplace.
The new spending bill, however, includes language that would prohibit a broad group of hemp-derived products. The language specifically targets viable seeds from the cannabis plants if the mature plants could exceed the 0.3% THC limit, including THCA, once dried. In practice, the rule would restrict seeds based on the potential potency of the future crop rather than the chemical makeup of the seeds themselves.
Many in the industry say this approach is unworkable. They note that growers cannot determine the future THC content of a plant until it has matured over several months. That leaves growers and companies with no reliable way to identify what would be considered legal under the proposal.
Consumers who grow their own plants could also feel the impact. Some states outlaw home cultivation entirely, while others allow limited growing, often tied to a medical card. New Holland Group CEO Jamie Pearson said patients who depend on specific strains for conditions such as epilepsy, chronic pain, or nausea risk losing access to varieties that currently help them.
The industry remains unsure how companies would be expected to prove that their seeds can only produce low-THC plants. Pearson believes only a small number of large companies would have the resources to meet any testing or certification requirements. She compared the range of seeds on the market today to the diversity found in wine grapes, which produce subtle differences across wide varieties.
If the ban proceeds, Pearson expects most of that diversity to disappear from the legal market. She warned that only major corporations with the right licenses would remain, while many unique genetics would move underground. In her view, consumers would lose the wide selection they are used to and be left with a far narrower set of options.
Companies like Tilray Brands Inc. (NASDAQ: TLRY) (TSX: TLRY) headquartered outside the U.S. may be wondering how long it will take America to adapt to the times and remove existing roadblocks to the widely accepted marijuana industry within the country.
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