In a commercial kitchen outside Raleigh, North Carolina, Nicholas Hohns spreads a blue-green goo into a square pan, making one of his company’s signature products: potent THC gummies, which contain the main intoxicating compound found in marijuana. It is a business he will soon have to give up. The multibillion-dollar U.S. market for harmful hemp products — from THC drinks sold in some Target stores to smokable cannabis flowers, and unlike the regulated legal marijuana industry — faces possible elimination after Congress voted to close a loophole in federal law that has allowed it to flourish. WATCH: How a small change in the law could have a big impact on the US hemp industry Advocates for the industry, along with some lawmakers, are fighting to save it. The short-term government funding bill signed by President Donald Trump last month pushed back the effective date of the “hemp THC ban” from Nov. 12 to Dec. 11, giving Congress more time to consider regulating the products rather than banning them. “It’s a very strange place,” Hohns said. “You worked 100 hours a week for the last four years and, yes, you made some money. But now you may have nothing to show for it.” Senator Mitch McConnell closed a loophole in the hemp law he championed. Marijuana and hemp are the same plant: cannabis. Marijuana is grown for its high levels of THC in its flowers. Low-THC hemp has historically been grown for its sturdy fibers, food, or wellness products. “Rope, not dope” was long the motto of farmers who supported the legalization of hemp. To provide farmers with a new cash crop, Kentucky Republican Sen. Mitch McConnell successfully pushed for the legalization of industrial hemp in the 2018 farm bill. But the way that law defined hemp (with less than 0.3% by weight of a specific type of THC, called delta-9) opened a huge loophole. Drinks or snacks could meet that threshold and still contain more than enough THC to get people high. READ MORE: What to know about the impending federal ban on THC-infused drinks and snacks Vape oil, gummies, chips, sodas and other unregulated and untested products loaded with hemp-derived THC spread across the country, including at gas stations or convenience stores, where they were available even to teenagers. Some companies began selling marijuana under the theory that the THC in raw marijuana is in a form called THC-A, which only converts to harmful delta-9 when heated or burned. The products either evaded state bans on recreational marijuana or undercut the price of heavily taxed and regulated cannabis where it is legal. Dozens of states responded by regulating or banning harmful hemp products. McConnell finally closed the loophole late last year by inserting a ban on THC from hemp in a move that ended the longest government shutdown in history. The ban, which limits the amount of THC in hemp products to 0.4 milligrams per container, would not take effect for another year. An industry tries to save itself The ban “threatens to reduce retail revenue by $28.3 billion, displacing 225,000 jobs and reducing the state’s sales tax potential by $2.1 billion,” according to a report last month by Whitney Economics, which studies the market. The industry hopes to save itself by restricting harmful products to people over 21, limiting the amount of THC that can be in a package and banning imported cannabis compounds. Kentucky Cornbread Hemp owners Eric Zipperle and Jim Higdon are willing to limit their products to, say, 5 milligrams if that’s what it takes to win lawmakers’ support. But the 0.4 milligram limit would destroy their business, they said. “If it passes in December, this place will be finished, it will be gone,” Zipperle said. They have 105 employees, sell hemp beverages in 18 states, and hope to raise $65 million this year. The 0.4 milligram limit is so low that it would ban even some body-friendly CBD products, such as topical lotions, said Jonathan Miller, general counsel for the industry group US Hemp Roundtable. Some consider another job. Hohns, who runs Deutermann Farms in Clayton, North Carolina, entered the hemp industry after losing his job as a personal trainer during the COVID-19 pandemic. North Carolina has not legalized medical or recreational marijuana, but many of the edibles Hohns makes are more potent than those available in states that have. “When I started seeing THC edibles being sold… I thought I had 18 months to two years to make money in this industry,” Hohns said. “There’s no way the government is going to sit here and let us do this when it was supposed to be for fibers, plastics, construction materials and ropes.” WATCH: How the bill that ended the shutdown could threaten the future of the US hemp industry That was more than four years ago. Hohns kept his capital investments to a minimum for fear of closure. It has considered making other products, such as creatine gummies, if it has to get out of the hemp THC business. Things have been more stressful for others. Drinkin’ Buds, a cannabis beverage company in Sheboygan, Wisconsin, has suspended production. Co-founder Matt Swanson left the payroll on Thursday. “There’s so much uncertainty,” Swanson said. “I’m actively looking for a job.” Allies and opponents align Among those who have come to the hemp industry’s defense are alcohol retailers, including Total Wine & More. Sales of cannabis seltzers have helped offset the decline in alcohol sales. Opponents include people who say the products are dangerous. “I feel compassion for the people who lose their jobs, but I also feel compassion for the many, many more people whose lives are affected by this,” said Kevin Sabet, executive director of Smart Approaches to Marijuana. The legal, regulated marijuana industry, which sees hemp’s THC as unfair competition, also supports prohibition. Cory Harris, a lobbyist for state-legal cannabis operators, suggested that dire predictions about its effect on the intoxicating hemp industry are exaggerated. While the ban would end interstate sales of products like seltzers and gummies with THC, some could find a home in legal state markets, he said. THC-infused drinks may be sold in stores in the states where they were produced. States like North Carolina could adopt legal hemp programs. “If you go from having virtually no rules to suddenly having a ton of rules, that’s a riot,” Harris said. “Welcome to our world. But if you set up your entire business within a legally questionable loophole, that’s the risk you run.” Associated Press reporters Allen G. Breed in Clayton, North Carolina, and Dylan Lovan in Louisville, Kentucky, contributed. A free press is the cornerstone of a healthy democracy. Support trustworthy journalism and civil dialogue. Donate now
