Federal ban has big impact on hemp industry

November 14, 2025 – WASHINGTON, D.C. - A new federal ban on psychoactive hemp-derived cannabinoids-like delta-8 and high-dose delta-9 THC-will dramatically reshape the U.S. hemp farming landscape, threatening thousands of farms and businesses while forcing a pivot toward fiber, seed, and CBD production.

The End of the Hemp Cannabinoid Boom?

The 2025 federal spending bill that reopened the government included a provision redefining legal hemp. It now bans products containing more than 0.4 milligrams of total THC per container, including synthetic cannabinoids like delta-8 and delta-10 THC. This change closes a loophole from the 2018 Farm Bill that allowed intoxicating hemp products to flourish nationwide.

What's Banned

• Gummies, drinks, vapes, tinctures with psychoactive effects

• Synthetic cannabinoids not naturally produced by the hemp plant

• Most hemp-derived THC products, even those previously compliant under the 0.3% dry weight rule

The FDA now has 90 days to publish a list of banned cannabinoids and define "container," while the industry has one year to comply.

There is a substantial economic fallout from this decision. Nationally over 300,000 jobs tied to hemp cannabinoids are at risk. Texas alone may lose 40,000 jobs and 6,300 businesses, according to economist Beau Whitney.

Farmers face uncertainty about planting decisions this spring. They may want to switch to another crop or fence their property and buy cows rather than planting a crop that might be illegal by harvest. All investment in hemp infrastructure projects around the country are now stalled

Most of the farmers will likely abandon floral hemp (grown for cannabinoids) and shift to fiber hemp for textiles, construction, and bioplastics. CBD is still legal but faces market saturation

"You're not going to get the investment at a time where you need the infrastructure," Whitney warned

Industry Response and Regulatory Pushback

• The U.S. Hemp Roundtable called the ban "a serious blow" but vowed to fight for regulation over prohibition

• Rep. Morgan Griffith (R-VA) is drafting legislation to create a federal regulatory framework for hemp cannabinoids

• State-level patchwork laws may emerge, with some states seeking to preserve local hemp markets

What Comes Next for Alabama Farmers?

For Alabama producers the ban means:

• Reevaluating crop plans for 2026 and beyond

• Exploring fiber and seed hemp markets, which may benefit from reduced competition

• Navigating new compliance rules as federal and state agencies clarify enforcement

Chey Garrigan is the founder and executive director of the Alabama Hemp Industry Trade Association.

"All is not lost," said Garrigan. "I am working on getting a hemp fiber processing plant in the state so we can make t-shirts, rope, and flooring from hemp fiber."

"We are working also on getting the Alabama medical cannabis program up and running in the next 12 months so that patients with a demonstrable medical need can still have cannabis access," said Garrigan.

In 2024, approximately 11,827 acres of hemp were harvested in the U.S. specifically for cannabidiol (CBD) production, also known as floral hemp. This marked a 60% increase from the previous year.

Chad "Chig" Martin is a Democratic candidate for Governor of Alabama. Martin is also the operator of a hemp store in Dothan. We asked Martin about the viability of his business moving forward given the federal ban and HB445 which the Alabama Legislature passed earlier this year.

"It's not looking good," said Martin.

The state banned smokable product (about 60% of hemp sales) and limited the THC content of the other products Martin and other hemp store operators can sell by then. The federal ban eliminated most of the rest of the products. CBD oil can still be sold providing some small hope for existing businesses.

"It is going to be tough to stay in business.," concluded Martin.

In 2024 11,827 acres of hemp were grown in the open for floral hemp (CBD extraction). The average yield was 1,757 pounds per acre for a total production: of 20.8 million pounds of floral hemp biomass. Of that 20.2 million pounds was processed for CBD and related products including Delta 8, Delta 9, Delta 10, Delta 12, etc.

The total value of production was $417 million from open-field hemp, with floral hemp being the largest contributor. Floral hemp acreage and yield rose sharply in 2024, with production up 159% from 2023. The top producing state are California, Kentucky, and North Dakota.

The Alabama Cannabis Coalition announced that they will be joining a united national front of advocates, farmers, industry groups, and consumers to pressure Congress to reverse this decision.

The bill includes a 365-day moratorium before enforcement, but that clock is already ticking.

"The Alabama Cannabis Coalition will not stand by while Congress threatens farmers, businesses, and the safe access that Alabamians depend on," said ACC leadership. "This legislation was inserted into a must-pass bill to reopen the government, and the people deserve transparency-not backdoor prohibition."

(A.I. contributed to this report)