The federal government last month decided to reimpose national restrictions over hemp-derived THC and intoxicating hemp products. But a new study from the Congressional Research Service (CRS) suggests that federal agencies may not be prepared to enforce the ban.
New language attached to the recently passed government spending bill could largely dismantle the U.S. intoxicating hemp market, which has grown into a $28 billion industry that supports 329,000 American jobs and contributes $1.5 billion annually in tax revenue. It's designed to "prevent the unregulated sale of intoxicating hemp-based or hemp-derived products, including Delta-8, from being sold online, in gas stations, and corner stores, while preserving non-intoxicating CBD and industrial hemp products."
READ: Wisconsin Lawmakers Propose Legal Hemp THC Framework After Federal Ban
But as the CRS points out, it remains unclear if and how federal law enforcement will enforce the new prohibitions when the new definition goes into effect next year.
"In marijuana's case, the federal response has largely been to allow states to implement their own marijuana laws despite the fact that state-regulated activities may violate the CSA," the agency wrote. "If intoxicating hemp products persist on the market after the change to their legal status, it is possible they could be subject to the same criminal and collateral issues as marijuana. It also remains to be seen whether FDA will pursue additional options to remove these items from the market. Both FDA and DEA may lack the resources to broadly enforce the laws prohibiting intoxicating hemp products on the market."
The federal government's move to stifle the hemp-derived THC market has drawn criticism from many in the industry.
The U.S. Hemp Roundtable, which is seeking more time before new laws go into effect, suggested that the language could also negatively impact non-intoxicating hemp products.
"Despite misleading claims this language protects non-intoxicating CBD products, the reality is that more than 90% of non-intoxicating hemp-derived products contain levels of THC that are greater than the proposed cap of .4 mg per container. As a result, seniors, veterans, and many other consumers who depend on hemp for their health and well-being would be violating federal law to purchase these products, disrupting their care and leaving them scrambling for potentially harmful alternatives," the group said in a statement.
Speaking with CNBC, Curaleaf CEO Boris Jordan, whose cannabis company also sells hemp-derived THC beverages, said that the rising popularity of THC products combined with federal prohibition on cannabis THC, and soon hemp-derived THC, could drive some companies toward the black market.
“What this ban is going to do is it’s going to force all those little players right now into the illegal market,” Jordan said. “Companies have got way too much money invested in this and the demand is still there and growing. They [companies] aren’t just going to go away, they’re just going to go into the illicit market and put more people at risk.”
For now, states like Wisconsin have begun circulating legislation that will allow local hemp producers and product manufacturers to continue doing business.
