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The fed govt may be on a path toward reopening, but the intoxicating hemp market is on a road to virtual shutdown. Barring additional Congressional action in the next yr, language included a package of bills set to end the record govt shutdown would put strict limits on hemp-derived THC, all but wiping out the mkt as we know it. Forces pushing for a "ban" or to "close the hemp loophole," including lengthy list of state AGs and major alc bev supplier orgs (as well as much of cannabis biz) ultimately won out after a last-ditch effort by Kentucky Sen Rand Paul came nowhere close to pulling the hemp-related language during vote last night. What It Says Fundamentally, provisions add far greater detail to definition of "hemp" as distinguished from "marijuana" and legalized by the 2018 Farm Bill. And most importantly, they don't take effect for 365 days after passage. Bill specifically addresses final products designed for human (or animal) use as well as industrial hemp and intermediary concentrates. To remain federally legal, final products can't contain any more than 0.4 mg of total THC, far lower than strength of most products on the mkt. In view of some market participants, that limit is tantamount to requiring that they defraud their consumers, given minimal efficacy at that dosage.Cannabinoids that aren't naturally produced by cannabis plants, synthetic reproductions of naturally occurring cannabinoids and "any other" with "similar effects (or are marketed to have similar effects)" are all barred as well. The FDA has 90 days to publish a list of cannabinoids known to naturally occur and those known to be synthetically produced and marketed in similar ways. Note, too, bill drops the 0.3% threshold for final, consumer products, which was never intended and resulted in some nonsensical applications in recent yrs. It also clarifies that a container is the "inner-most" package, like a can, not a multi-pack.Where It Appears The language shows up in a Senate bill setting agriculture spending for the next fiscal yr. It's part of a legislative package tied to a continuing resolution designed to reopen the govt, shared by the Senate appropriations committee Sunday (BBI, Nov 10). The same day, the Senate approved the package 60-40, which included a reopening resolution already approved by the House. Sen Paul objected to the hemp language's inclusion, but the vote to strip it failed 76-24 yesterday. The House is set to begin voting tomorrow.What Happens if It Takes Effect If additional legislation doesn't repeal or further adjust this language in the next year, the current intoxicating hemp market becomes federally illegal. That's probably enough to chill interest among the kinds of major players attracted to category's growth even before it takes effect, giving rise to massive concern among many hemp industry members and advocates. Another big set of questions swirls around impact on various state laws, which embraced prior hemp definition to varying degrees and set numerous other thresholds and standards for the legal sale of intoxicating hemp.What It Means in Meantime Passage by House and approval by President Trump starts the 365-day clock. So this ain't the end. But given broad difficulties in Congress and the midterms coming down the pike, this especially fraught issue poses particular challenges. To convince skeptical lawmakers to drop prohibitionist stances, more responsible industry members may need to find a way to toss the weight of bad actors uninterested in regulation. Then, too, there's still a year of the status quo. For all the talk of an ongoing "public health crisis," even this legislative action ultimately amounts to 12 more mos of inaction on all the alleged potential for harm to consumers and especially children. Putting the best face on things, Coalition for Adult Beverage Alternatives urged members today, "in that package is a lifeline, an opportunity: the 1-year implementation period. It is not 'the end.' It is a runway" to step up lobbying efforts "to ensure this industry does not disappear in a year."How We Got Here Recall, hemp-focused language first showed up in fed appropriations bills in June, usually described as efforts to "close to the hemp loophole." By Jul, Kentucky Sen Mitch McConnell, former majority leader who helped champion hemp language in 2018 Farm Bill, emerged as major fed opponent to intoxicating hemp biz, setting up a clash with Sen Paul later that mo. At that time, major alc bev supplier orgs had joined the fray in favor of more limitations on hemp, setting up a different kind of clash with middle-tier members - the wholesalers - who had embraced the emerging mkt. On alc side, many viewed nascent segment as a white horse that could mitigate declines in their core categories.The govt shutdown last mo ramped up energy and tension a few notches. Following high-profile letter late last mo from 39 state AGs urging stricter regulation, supplier orgs echoed the call in their own letter last wk, before reupping it with plea to block Sen Paul's last stand yesterday. A separate letter from a group of 50+ alc bev distribs joined with hemp industry advocates to protect their bizzes and push back against a perceived "prohibition." But ahead of final votes in the House, that appears to be the direction of travel, putting pressure on these folks to find some more solid middle ground in coming mos.

Congress to Set 365-Day Countdown to Strict New Limits on Hemp THC, Offering Glimmer of Clarity

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