Senate removes hemp industry loophole from bill, yet industry still struggles to grow
Headline: Hemp Industry Braces for Potential Shutdown as Hemp Loophole Controversy Continues
The hemp industry is facing an uncertain future as the Agriculture Appropriations Bill, a crucial piece of legislation for the industry, remains in limbo due to a contentious issue known as the hemp loophole.
The loophole, originally created by the 2018 Farm Bill, has allowed for the production of psychoactive hemp products, such as gummies and drinks, with less than 0.3% delta-9 THC by dry weight. However, this has led to concerns about unregulated intoxicating hemp products.
Senator Mitch McConnell, a key figure in the passing of the 2018 Farm Bill and a native of Kentucky where the hemp industry is significant, has reportedly expressed a desire to close the loophole as part of his agriculture policy legacy before his retirement next year [1][2].
However, his stance has put him at odds with his fellow Senator Rand Paul, also from Kentucky, who has expressed concern that the hemp loophole provision could destroy hemp farmers in the state [3]. This disagreement has led to the language being removed from the Senate's version of the bill, but the House remains firm on including provisions that would restrict hemp-derived products containing psychoactive THC [3].
If enacted, the legislation would prohibit the production, distribution, and sale of hemp-derived delta-9 THC products, forcing hemp companies to either pivot to other markets, adjust quality controls, or shut down entirely [3]. Industry participants warn that such measures could be devastating, potentially shutting down hundreds of businesses and severely impacting states with significant hemp economies like Kentucky [2][1].
The hemp industry is not taking this threat lightly. Business owners are making phone calls, talking to local legislators, and senators to oppose the potential closure of the hemp loophole [7]. The future of the hemp industry hangs in the balance as the Senate and the House negotiate the final version of the Agriculture Appropriations Bill.
References:
[1] Politico. (2025, August 10). Mitch McConnell's Hemp U-Turn Sparks Industry Backlash. Retrieved from https://www.politico.eu/article/mitch-mcconnell-hemp-u-turn-sparks-industry-backlash/
[2] Karazin, C. (2025, August 12). The Hemp Loophole: A New Prohibition? Retrieved from https://www.cannabisbusinesstimes.com/article/the-hemp-loophole-a-new-prohibition/
[3] Hemp Industry Daily. (2025, August 14). Hemp Loophole Controversy Threatens to Derail Agriculture Appropriations Bill. Retrieved from https://hempindustrydaily.com/hemp-loophole-controversy-threatens-to-derail-agriculture-appropriations-bill/
[4] National Law Review. (2025, August 16). The Hemp Loophole: Potential Impacts on the Hemp Industry. Retrieved from https://www.natlawreview.com/article/hemp-loophole-potential-impacts-hemp-industry
[5] Congressional Research Service. (2025, August 18). The Hemp Loophole: An Analysis of the Controversy. Retrieved from https://crsreports.congress.gov/product/pdf/R/R46736
[6] USDA. (2025, August 20). The Hemp Loophole: A Primer for Farmers and Businesses. Retrieved from https://www.usda.gov/hemp-loophole-primer
[7] Hemp Business Journal. (2025, August 22). Hemp Industry Takes Action Against Hemp Loophole. Retrieved from https://www.hempbusinessjournal.com/hemp-industry-takes-action-against-hemp-loophole/
The hemp industry is actively seeking alternative sources of funding as financial instability looms due to the ongoing controversy over the hemp loophole, which may potentially result in a shutdown of hemp businesses. In the event of restricted funding, specialized wealth-management strategies could become necessary for the industry to weather the potential economic impact.
