They Built a Hemp Business in Good Faith but Washington Is About To Crush It

A Regulatory Change Threatens the U.S. Hemp Industry

A recent federal funding bill includes a new restriction that could devastate the U.S. hemp sector. The measure introduces a lower national THC limit that would effectively outlaw most hemp-derived products currently on the market.

The Rule Hidden in a Funding Bill

Buried in the latest government spending package, the amendment lowers the allowable limit of tetrahydrocannabinol (THC) in hemp products. Industry leaders say the new rule unfairly targets small producers who complied with existing laws, investing heavily in facilities, testing, and compliance measures.

“We built our business in full compliance with federal and state hemp regulations,” said one producer. “Now, overnight, Washington is changing the rules.”

Impact on Businesses and Farmers

If enacted, this change could bankrupt many hemp operations nationwide, especially those focused on CBD and other derivatives extracted from the hemp plant. Farmers who transitioned from traditional crops to hemp in good faith would face millions in losses. Industry groups warn of mass closures, layoffs, and a potential black market surge.

Industry Outcry and Legal Pushback

Trade associations and small business owners plan to contest the rule both legally and politically. They argue that Congress is misunderstanding the difference between hemp and marijuana and that stricter THC caps will not improve public safety.

“This rule punishes the very people who tried to operate transparently,” said another industry advocate.

Wider Implications for the Market

The hemp sector, once touted as a sustainable and profitable crop, now faces another round of uncertainty. Investors and retailers are already slowing down or canceling contracts due to regulatory risks. For many, this could signal the collapse of a budding industry that was only just recovering from previous market volatility.

Author’s summary: A new federal THC limit hidden in a U.S. funding bill could devastate the hemp industry, pushing compliant businesses and farmers to the brink of collapse.

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Reason on MSN Reason on MSN — 2025-11-30

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