A review of Section 781’s rewrite of the federal hemp definition, the competing legislative responses (the Lawful Hemp Protection Act, the Cannabis Administration and Opportunity Act, Representative Mace’s repeal bill, and Senator Wyden’s Cannabinoid Safety and Regulation Act), the CMS pilot expanding Medicare access to CBD products, and the separate marijuana rescheduling process now underway. Taken individually, each has a rationale. Taken together, they describe a federal government regulating cannabis and hemp in several directions at once, with no framework connecting them. The argument here is that Congress should regulate products by what they become and the risk they present, not by an increasingly strained definition of what plant they came from.
Key Points
- Section 781 would keep the 0.3% total THC limit for hemp plants while imposing separate thresholds on processing intermediates and finished cannabinoid products.
- Finished products containing more than 0.4 milligrams of combined total THC and designated similar-effect cannabinoids per container would no longer qualify as hemp.
- The intermediate-product rule could make ordinary U.S. extraction of full-spectrum hemp difficult because extraction naturally concentrates cannabinoids.
- Competing bills would repeal Section 781, establish consumer-safety rules, overhaul federal cannabis policy, or create category-specific regulation for hemp beverages.
- The article argues that federal policy should regulate products according to dose, intended use, manufacturing process, claims, and actual risk rather than plant origin alone.
In 2018, Congress legalized hemp. Eight years later, Washington is still trying to decide what that means.
The straightforward part everyone remembers: hemp was an agricultural commodity, marijuana stayed a controlled substance, and a national cannabinoid market grew up around that line without a national regulatory framework to match it, states, industry and a slow moving FDA filling the gaps as intoxicating products emerged that Congress never anticipated.
Now Washington is trying again.
Section 781, enacted on November 12, 2025, as part of the bill that ended the fall government shutdown, substantially rewrites the federal definition of hemp. Senator Mitch McConnell inserted the language late in the negotiations. Fellow Kentucky Senator Rand Paul fought it publicly on the floor, arguing it would “kill the hemp industry nationwide” and conflict with hemp laws already on the books in 20 states. It passed anyway, without the standalone hearing hemp policy has traditionally gone through as part of a Farm Bill. It is scheduled to take effect November 12, 2026. The Senate advanced a stopgap funding measure on a procedural vote August 3, 2026, then passed it 90-6 on August 8, 2026, as H.R. 6500. That bill would delay most Section 781 restrictions affecting naturally occurring hemp cannabinoids to December 11, 2026, though the exclusion of “non naturally occurring” cannabinoids would still take effect in November regardless. As of this writing it still needs House approval and the President’s signature, so the original November 12 date remains the operative one in law. The House’s own competing stopgap funds the government only through December 4 and says nothing about hemp, which makes House concurrence with the Senate’s hemp language an open question rather than a formality. The bipartisan Lawful Hemp Protection Act, introduced by Representatives Andy Barr and Angie Craig as H.R. 9830 on July 22, 2026, offers a different approach and remains in committee. The Cannabis Administration and Opportunity Act, or CAOA, reintroduced in the Senate on July 16, 2026, approaches hemp as part of a much broader reconsideration of federal cannabis policy.
At the same time, the federal government has already moved part of marijuana to Schedule III and is deciding whether to move the rest, while CMS and FDA are experimenting with access to certain hemp derived cannabinoid products using physician oversight and real world evidence.
Taken individually, there is a rationale behind each of these actions. Put them next to one another, and federal cannabis policy becomes considerably harder to explain.
I’ve spent more than a decade working with cannabis and hemp from several perspectives: as a state licensed medical cannabis cultivator and manufacturer, hemp cultivator and manufacturer, exporter and business owner, as well as a founding member and former president of a trade association, board member, and participant in multiple industry organizations. I’ve watched policy develop from cultivation facilities and manufacturing labs as well as legislative hearings and advocacy efforts, in state, federal, and international regulatory frameworks.
One lesson has been remarkably consistent: never evaluate legislation by its press release.
Good legislation is measured on Monday morning, when a farmer decides what to plant, a laboratory decides how to test it, a manufacturer has to determine whether it can legally process it, and a regulator has to interpret what Congress actually wrote.
So rather than asking which of these proposals is best for the hemp industry, I think there is a more useful question:
Do they actually solve the problems Congress is trying to solve?
Congress Has a Legitimate Problem to Solve
There is no reason for the hemp industry to pretend everything that followed the 2018 Farm Bill was good policy.
(However, the free market devil on my shoulder says to raise THC cap to 1% and allow for interstate and export commerce while we figure the rest out.)
Congress legalized hemp without creating a comprehensive framework for the consumer cannabinoid market that followed. Products emerged that were poorly manufactured, inadequately tested, irresponsibly marketed and, in some cases, easily accessible to minors. Chemical conversion of cannabinoids expanded rapidly, some would say due to missing and irresponsible regulations forcing the lab’s hand. States adopted patchwork and conflicting rules. Interstate commerce became increasingly difficult to navigate.
Congress should address those problems.
Intoxicating products should have meaningful age restrictions. Products should be accurately labeled and tested through a foundation based on science and standards. Manufacturers should meet appropriate quality standards, appropriate being the key word. Contaminants, residual solvents and adulterants should not be acceptable simply because a product originated from hemp.
But regulation should correspond to the problem being regulated.
That is where Section 781 becomes difficult.
If the problem is unregulated intoxicating consumer products, why does the solution reach non intoxicating full spectrum products, ordinary manufacturing intermediates that consumers never encounter, and potentially the domestic infrastructure required to process American hemp?
Section 781 Regulates by Redefining
The mechanics of Section 781 matter because there isn’t one THC standard. There are different standards depending on where the material is in the supply chain.
At the plant level, hemp remains tied to a 0.3% total THC standard, including THCA, on a dry weight basis.
Congress then separately addresses intermediate hemp derived cannabinoid products: material being processed or intended to become another product. Those intermediates face a 0.3% combined threshold involving total THC and cannabinoids designated as having similar effects.
Finished products face something entirely different.
A final hemp derived cannabinoid product containing more than 0.4 milligrams combined total per container of total THC and designated similar effect cannabinoids no longer qualifies as hemp.
Not 0.4%.
Not 0.4 milligrams per serving.
Per container.
That distinction has enormous practical consequences.
A full spectrum extract is designed to preserve naturally occurring components of the plant, including trace quantities of THC. A product does not have to be meaningfully intoxicating to contain more than 0.4 milligrams of THC across an entire bottle.
The method of measurement also produces a strange result. Two products could contain the same formulation at the same concentration and have different federal legal status simply because one is sold in a larger container.
If Congress is attempting to regulate intoxication, that raises a basic question: Does total THC per package actually measure intoxicating risk?
Dose, concentration, serving size, and route of administration matters. The number of milligrams someone actually consumes certainly matters.
The physical size of the package is a much less obvious measure of pharmacological risk.
Congress itself appears to have recognized some uncertainty here because FDA was instructed to provide additional specificity concerning what constitutes a “container,” along with classifications of cannabinoids that occur naturally, THC class cannabinoids, and cannabinoids considered or marketed as having similar effects.
Those definitions were due within 90 days of enactment, by February 10, 2026.
FDA missed that deadline. The Congressional Research Service confirmed in a late May 2026 report that the required lists still had not been published. As of this writing, more than six months past the statutory deadline, they still haven’t been.
That is not a minor administrative detail. Those classifications help determine what the statute actually regulates.
Eight years after the Farm Bill, we are once again facing a federal cannabinoid law whose implementation depends on regulatory clarity that has not arrived.
The Beverage Aisle Shows the Math in Practice
Nowhere is the per container problem easier to see than in a can of hemp derived THC beverage.
A standard can typically carries somewhere between 5 and 10 milligrams of total THC. Section 781’s finished product limit is 0.4 milligrams per container. That is not a close call or a product formulated to skirt a boundary. It is an entire, well established retail category sitting roughly 12 to 25 times over the federal limit as a matter of ordinary formulation.
The category is not small. Whitney Economics’ U.S. THC Beverage Report put legal U.S. THC beverage sales at $1.0 to $1.3 billion in 2024 across roughly 500 to 750 brands nationally, with chief economist Beau Whitney estimating a conservative total potential market of $9.9 to $14.9 billion once the category matures, and by early 2025 hemp beverage companies reportedly occupied close to 10 percent of the floor space at the wine and spirits industry’s own annual trade show. Kentucky, Senator McConnell’s own state, permits hemp derived THC beverages up to 5 milligrams of THC per serving under its alcohol regulator, roughly 12 times his own federal proposal’s per container ceiling. Whatever Section 781 is meant to accomplish, it is not obviously tracking what the senator’s own state considers an acceptable dose.
A bipartisan response has already emerged. Representatives Beth Van Duyne and Greg Landsman introduced the Beverage Regulatory Parity Act, H.R. 10079, on August 10, 2026, to build a specific federal framework for hemp derived THC beverages: a 5 milligram per serving limit on intoxicating THC, TTB permitting rather than FDA’s hemp framework, and a proposed federal excise tax of 8 cents per milligram, regulated and taxed more like alcohol than like an undifferentiated hemp product. The bill is endorsed by the Wine and Spirits Wholesalers of America, and that endorsement is worth sitting with. It would be easy to assume the alcohol industry wants hemp beverages banned outright, one less competitor for the same shelf space. Distributors told Congress close to the opposite; that demand for alcohol has shifted downward in recent years, that hemp products have driven new investment and jobs, and that prohibition would simply push the category into unregulated channels rather than eliminate it. They offered their own history of regulating alcohol as a model for regulating this instead of banning it.
That is a useful data point on its own terms. The interest group most people would assume wants this market gone is lobbying to keep it legal and regulated. Never evaluate legislation, or the people it affects, by the press release you’d expect them to write.
The Bigger Problem May Be What Happens Before the Bottle Exists
Most public discussion of Section 781 focuses on products consumers purchase.
Manufacturers have a different problem.
Before there is a tincture, capsule or topical, someone has to turn the plant into an ingredient.
Extraction is a concentration process. Biomass becomes crude extract. Crude may be refined into distillate. Distillate may be further purified or separated. Each step removes plant material while concentrating cannabinoids.
That is not an unintended consequence of extraction. It is the purpose of extraction.
Importantly, Congress did not overlook this stage. Section 781 expressly defines an intermediate hemp derived cannabinoid product and then excludes intermediates that exceed its 0.3% combined cannabinoid threshold.
That creates a remarkable manufacturing problem.
A farmer can grow a federally lawful hemp crop. An American processor can legally purchase that crop. The processor can begin extracting it.
Then the material can stop being hemp because the processor successfully concentrated the cannabinoids contained in the lawful plant.
This isn’t merely theoretical.
Casco Bay Hemp’s own production records provide a useful real world example. We reviewed four independently tested batches of full spectrum CBD distillate produced across 2025 and 2026. Two were tested by Nova Analytical and two by MCR Labs.
Their measured THC concentrations were approximately 2.27%, 3.49%, 3.61% and 4.02%.
Every sample was dramatically above Section 781’s 0.3% intermediate threshold, ranging from approximately 7.6 to 13.4 times that limit.
These were not THC concentrates disguised as hemp products. They were CBD dominant full spectrum distillates containing approximately 67% to 79% CBD, along with naturally occurring minor cannabinoids.
Four production samples from one manufacturer do not establish an industry wide statistical distribution, and they shouldn’t be represented that way. But they illustrate the chemistry involved remarkably well.
The THC wasn’t added.
It was concentrated along with the rest of the plant’s cannabinoid profile.
That leaves Congress with a question that needs an answer: How does an American processor legally turn compliant cannabinoid hemp into full spectrum extract if the normal intermediate created during extraction is no longer hemp?
The Economic Consequence Doesn’t Stop at the Extractor
This is where Section 781 stops being merely a cannabinoid policy issue and starts becoming an industrial policy issue.
The most recent comprehensive national accounting of this industry, Whitney Economics’ U.S. National Cannabinoid Report, put total hemp derived cannabinoid market demand at more than $28 billion, supporting roughly 328,000 jobs and $13 billion in wages, for a total economic impact in excess of $79 billion once indirect and induced activity is included. That report is dated October 2023; it is the most recent national figure of its kind this review could independently verify, and it should be read as a floor rather than a current snapshot. Even as a floor, it describes an industry too large to treat its restructuring as an afterthought.
American hemp processors and manufacturers have spent years investing in extraction equipment, laboratories, trained chemists and technicians, quality systems, analytical testing, process development and, in some cases, expensive GMP infrastructure.
Congress encouraged the development of that industry when it legalized hemp in 2018.
If the new definition makes ordinary domestic extraction legally impractical, the demand for compliant cannabinoid ingredients doesn’t necessarily disappear. Assuming a lawful downstream hemp market continues, manufacturers will still need raw materials.
They simply may not be able to obtain them from American extractors.
One theoretical solution would be processing outside the United States. Agricultural material could leave the country, be refined overseas until it meets whatever standard is required for lawful U.S. entry, and return as a compliant ingredient for domestic manufacturing.
That is not the same as importing prohibited full spectrum distillate. Any material entering the United States would still have to satisfy applicable U.S. law.
It is also an economically absurd supply chain.
Hemp biomass and flower are relatively bulky agricultural materials. The logical place to process biomass is reasonably close to where it is grown; extract the valuable compounds, reduce the mass and volume, and transport the concentrated ingredient.
Sending agricultural material overseas to perform a manufacturing process American companies already have the equipment, personnel and expertise to perform, only to import the resulting ingredient back, turns that logic upside down.
It also exports the value added portion of the supply chain.
American farmers could grow the crop. American companies could formulate compliant finished products. American consumers could purchase them. But foreign processors could capture the extraction revenue in between.
Domestic extraction businesses lose customers. Farmers lose domestic processors. Specialized jobs disappear. Capital investments become stranded. Laboratories lose demand. American manufacturers become more dependent on foreign suppliers, while process knowledge and future cannabinoid innovation have another incentive to migrate overseas.
Some American extraction companies have spent substantial sums improving manufacturing controls precisely because regulators and sophisticated customers demanded higher standards, especially in the global hemp economy. Punishing that investment by making the underlying process impossible is difficult to reconcile with a policy supposedly intended to improve product safety.
If Congress intends to eliminate domestic cannabinoid extraction, it should debate that economic decision openly.
If it does not, Section 781 needs a workable treatment of legitimate in process material.
Then There Is “Manufactured Outside the Plant”
Another phrase deserves considerably more attention.
Section 781 addresses cannabinoids capable of occurring naturally in cannabis but that are “synthesized or manufactured outside the plant.”
The likely concern is understandable. The post 2018 market produced chemically converted cannabinoids and products that lawmakers never contemplated when they legalized hemp.
But statutory language has to survive beyond legislative intent.
What does manufactured mean?
Chemical conversion?
Biosynthesis?
Fermentation?
Isolation?
Chromatography?
Distillation?
Purification?
Extraction itself?
If Congress means converting CBD into delta 8 THC, it can write that. If it means synthesizing a naturally occurring cannabinoid from another precursor, it can write that too.
Using a broad term and leaving regulators or courts to determine its boundary later creates precisely the uncertainty federal legislation should be eliminating.
There is also a scientific distinction worth preserving. A novel compound that does not naturally occur in cannabis presents a different regulatory question from a naturally occurring molecule produced through another manufacturing method.
That does not mean synthesized cannabinoids should escape regulation. Identity, purity, residual solvents, contaminants and manufacturing quality matter enormously.
But origin alone does not answer all of those questions.
The molecule, the process, the impurities, the dose and the intended use all matter.
At least one hemp industry attorney has already concluded that fermentation derived cannabinoids fall inside the prohibition, reasoning that the exclusion language is broad enough to reach them regardless of production method. Whether regulators, courts or Congress ultimately agree is an open question. That is precisely the kind of determination the statute assigned to FDA, and FDA, six months past its own deadline, still hasn’t made it.
Barr and Craig Start From a Different Place
The Lawful Hemp Protection Act approaches the problem differently.
Rather than beginning primarily with products that should cease being hemp, it begins with the existence of a lawful hemp derived consumer marketplace and asks how that marketplace should operate.
That opens the door to the regulatory tools we already use elsewhere: manufacturing standards, testing, labeling, packaging, age restrictions and federal oversight.
That does not make every provision of the bill correct. It deserves the same scrutiny as Section 781. Definitions can still create unintended consequences, Agency authority can become overly broad, and compliance requirements can become disproportionately expensive for small businesses. As of this writing the bill has four cosponsors, Representatives Barr, Craig, Tim Moore and Marc Veasey, split evenly between the parties, and has been referred to four House committees without a hearing yet scheduled.
But the underlying philosophy is different.
Section 781 largely asks:
What should no longer be hemp?
The Lawful Hemp Protection Act asks:
How should hemp products be regulated?
Those aren’t semantic differences. They are fundamentally different approaches to public policy.
The CAOA Makes the Picture Even More Complicated
The Cannabis Administration and Opportunity Act starts somewhere else again because its primary subject isn’t hemp, but cannabis.
Hemp becomes one component of a much larger attempt to restructure federal cannabis policy.
That broader approach has an advantage: it forces policymakers to confront the fact that hemp and marijuana are not different plant species. Federal law created a legal distinction based primarily on cannabinoid content and then built two radically different regulatory systems around it.
The disadvantage is scope. When legislation attempts to solve cannabis policy comprehensively, the specific needs of agriculture, cannabinoid manufacturing and low risk hemp products can become secondary to the larger marijuana debate. As of this writing, Senator Booker’s bill, S. 5022, carries 16 cosponsors, all Democrats, and has been referred to the Senate Finance Committee without further action since its July 16, 2026 introduction, a reminder that comprehensive reform and near term hemp relief are moving on very different tracks.
Put Section 781, the Lawful Hemp Protection Act and CAOA next to one another and the disagreement becomes clearer. Congress isn’t merely debating three ways to regulate hemp. It is debating what hemp actually represents in federal law: an agricultural commodity, a consumer product category, a subset of cannabis, or some combination depending on what the plant becomes.
The Field Keeps Growing
Section 781, the Lawful Hemp Protection Act and CAOA are not the only proposals on the table, and the rest of the field sharpens the same two question framework rather than complicating it.
Representative Nancy Mace’s American Hemp Protection Act, filed November 17, 2025, takes the simplest position of any of them: repeal Section 781 outright and let the pre 2025 hemp definition stand while states and industry self regulation handle the rest. Mace argues the restrictions were never properly debated. “Rather than have a substantive, open debate on the future of hemp policy in America,” she said, “prohibitionists slipped this provision into a must pass bill.” Her early cosponsors, Thomas Massie, Zoe Lofgren and James Baird, span enough of the ideological map to make the point that opposition to how Section 781 passed is not confined to one party.
Senator Ron Wyden’s Cannabinoid Safety and Regulation Act, introduced with Senator Jeff Merkley on December 10, 2025, sits closer to the Lawful Hemp Protection Act’s philosophy: don’t shrink the definition of hemp, regulate what’s sold under it. It would set a 21 plus purchase age nationwide, require safety testing and truthful labeling, give FDA recall authority over products with excessive THC or dangerous additives, and set federal serving size limits only where a state hasn’t already set its own, while leaving states free to regulate more strictly.
Line them up and the same divide from earlier in this piece holds. Section 781 asks what should no longer be hemp. Mace’s bill asks why Congress should get to redefine it out from under an existing industry in the first place. The Lawful Hemp Protection Act and the Cannabinoid Safety and Regulation Act both ask how the products sold under that definition should be regulated. Three additional bills, essentially two answers.
While Congress Restricts Hemp, Washington Is Experimenting With Cannabinoid Access
Then the story gets considerably stranger.
CMS launched that model on April 1, 2026. The program’s $500 annual reimbursement goes to the prescribing physician rather than the patient, for doctor recommended CBD products that meet defined THC limits, in oral form only, under a treating physician’s direction. The design assumes physicians will pass some of that subsidy on to patients as an incentive to bring more of them into the program. FDA Commissioner Marty Makary announced the agency would loosen its enforcement posture for qualifying products rather than requiring each one to complete the conventional new drug approval pathway first.
That distinction matters.
The program is not simply Medicare declaring non FDA approved CBD products to be approved medicines, nor is Medicare simply reimbursing them as conventional prescription drugs. It includes THC limits, physician involvement and product testing requirements.
Most importantly for this discussion, the federal government is deliberately interested in real world evidence.
That has created understandable frustration among pharmaceutical developers.
MMJ International Holdings, which is developing cannabinoid therapies for Huntington’s disease and multiple sclerosis through FDA’s botanical drug pathway, sought a federal injunction to block the CMS pilot before it launched, arguing CMS bypassed normal notice and comment rulemaking and created what its complaint called a fast lane for retail grade cannabinoid products while companies still following the conventional approval process bear the cost and time that process requires. The pilot launched on schedule regardless, and the district court later dismissed MMJ’s suit on standing grounds, without reaching those arguments, holding that a company without a product already on the Medicare market lacked standing to challenge the program favoring one. MMJ appealed to the D.C. Circuit on June 5, 2026, arguing the standing ruling itself creates a troubling precedent: a company that followed the conventional approval process is denied judicial review specifically because it followed that process rather than skip it. The appeal remains pending.
From MMJ’s perspective, companies were told there was a door: clinical development, FDA review and approval. They are still walking through it. Then another part of the federal government appeared to open a different one, and when they went to court about it, they were told they hadn’t walked far enough through the first door to have standing to complain about the second.
Their frustration is understandable.
But the money a company invested complying with one regulatory pathway does not necessarily establish that the same pathway is appropriate for every cannabinoid product.
That is the more interesting policy question.
We already accept different evidentiary standards throughout federal regulation. A pharmaceutical making disease treatment claims faces a different burden than a food, cosmetic or dietary supplement. Medical devices have their own frameworks. Post market surveillance and real world evidence already play roles in regulatory science.
Randomized controlled clinical trials remain extraordinarily valuable. They are also not the only source of useful information about human outcomes.
Observational data, historical use, adverse event reporting, all matters. Pharmacovigilance matters. Real world evidence matters.
The appropriate evidentiary standard should depend partly on what a product is, what claims are being made, how it is used and what risks it presents.
The CMS/FDA experiment is interesting precisely because the federal government itself appears willing to explore that idea.
Marijuana Is Moving in Yet Another Direction
At the same time, federal marijuana policy is already partway to Schedule III.
In April 2026, the Justice Department moved two specific categories, FDA approved drug products containing marijuana and marijuana obtained under a state medical marijuana license, from Schedule I to Schedule III. Everything else, including unlicensed marijuana crops and ordinary marijuana extracts, remains Schedule I. A separate administrative hearing on whether to reschedule all marijuana concluded in July 2026 after eleven days of testimony, and the presiding judge, Chief Administrative Law Judge Derek Julius, set an August 17 deadline for closing briefs. Both sides filed on schedule, with DEA itself formally urging the judge to recommend Schedule III. Judge Julius must now prepare a report and recommendation, after which the parties get 20 days to file exceptions before the record is certified to DEA Administrator Terrance Cole, who holds the final decision on no announced timeline for either step.
The rescheduling process is distinct from hemp legislation, and a partial rule plus a pending administrative recommendation should not be confused with a final, comprehensive agency action. But the direction of federal policy is relevant, and part of it has already moved.
The federal government is already treating some marijuana as a Schedule III substance while Congress simultaneously prepares to implement a hemp definition that removes many full spectrum products from lawful hemp and creates serious questions about domestic extraction.
These aren’t technically contradictory legal proceedings. Different statutes, agencies and legal standards are involved. But policy does not exist in isolated filing cabinets. Put the pieces on the same table. One part of Washington is narrowing hemp while another is considering broader medical recognition of marijuana. CMS and FDA are experimenting with controlled access to nontraditional hemp derived products and real world evidence. Congress has competing proposals for regulating cannabinoid products and states continue operating their own cannabis systems.
Eventually these policies have to meet. The question is whether anyone is designing the intersection.
We May Be Recreating the Problem We’re Trying to Solve
There is another potential consequence of Section 781 that should sound familiar, and it is no longer entirely hypothetical.
When a product stops qualifying as hemp federally, it doesn’t necessarily vanish from the marketplace. States already regulate this category on wildly different terms. Arkansas has banned most intoxicating hemp products outside licensed medical dispensaries. Missouri’s governor signed a law in April 2026 restricting them to licensed marijuana dispensaries starting the same day Section 781 takes effect. Virginia caps total THC at 2 milligrams per package, five times looser than the coming federal standard. Alabama, Georgia, Louisiana and Tennessee regulate hemp beverages with their own per serving milligram limits, well above 0.4 milligrams per container; Kentucky’s is 5 milligrams per serving, the same state whose senior senator wrote the federal number. Other states are still deciding, and Texas shows how messy that can get. The Texas Supreme Court restored the state’s authority to treat manufactured Delta 8 as Schedule I in May 2026. The same day, a Travis County judge blocked the broader smokeable hemp ban, and that injunction still holds. Then on August 3, 2026, hemp retailers filed a separate federal suit in the Southern District of Texas, arguing the ban violates the Farm Bill and the Commerce Clause. Three courts, one unresolved question. Florida’s legislature adjourned this year without resolving it.
That is roughly fifty different state answers to the same question, layered under one federal answer that most of them don’t match. The result could become federal prohibition alongside state authorization, uncertain interstate commerce, conflicting regulatory requirements and enforcement heavily influenced by federal priorities. Sound familiar?
In other words, Congress could close what it considers the hemp loophole and recreate a version of the marijuana problem, state by state, in real time. After decades spent arguing about the consequences of conflicting federal and state cannabis laws, that would be an impressive circle to complete.
Maybe We’re Still Asking the Wrong Question
Jason Adelstone, a partner at Harris Sliwoski LLP who advises cannabis operators on federal and international regulatory compliance, put the same point more bluntly: “Congress keeps drawing an arbitrary line between hemp and marijuana when it should be regulating the end product. Until federal cannabis policy focuses on what a product is, rather than which plant it came from, we’re going to keep getting nonsensical results.”
The more I read these proposals, the more I return to a much simpler example.
Potatoes.
A farmer grows potatoes. Some become french fries. Some become potato starch. Some become vodka.
We don’t regulate the farmer as a distillery because the crop could become alcohol. We regulate vodka as alcohol because of what the potato became.
The same logic applies to grapes, corn and barley.
Agricultural commodities have different end uses, and those end uses create different risks.
Hemp can become fiber, building material, animal feed, food, cosmetics, non intoxicating cannabinoid products, intoxicating products or pharmaceuticals.
Those products don’t have the same purpose or the same risk. They shouldn’t necessarily have the same regulatory framework.
Perhaps Congress has spent too much time asking: What is hemp?
A better question may be: What did we make from it? (aka Smart Policy)
If the product is intoxicating, regulate intoxication, if it is a pharmaceutical making therapeutic claims, regulate it appropriately as a drug. If it is food, regulate it as food. If it is an agricultural commodity, regulate the agricultural risks.
If it is an intermediate being processed inside a controlled manufacturing environment and never offered to consumers, regulate the manufacturing process rather than pretending the intermediate is a finished product.
That approach doesn’t mean less regulation, in some categories it may mean considerably more. But, it means regulation designed around the actual risk and intended use rather than asking one botanical definition to do the work of an entire regulatory system.
Section 781, the Lawful Hemp Protection Act, CAOA, Mace’s repeal bill and the Cannabinoid Safety and Regulation Act each contain pieces of a future federal framework. The CMS/FDA experiment and marijuana rescheduling process add still more pieces.
What is missing is evidence that anyone has assembled the whole puzzle.
Congress has an opportunity to correct legitimate problems created or exposed by the 2018 Farm Bill: intoxicating products without appropriate safeguards, youth access, inconsistent testing, irresponsible manufacturing, misleading labels and regulatory uncertainty. Those problems deserve serious solutions.
But after eight years of uncertainty, replacing one imperfect framework with another that prohibits ordinary products, potentially disables domestic extraction, relies on overdue agency definitions and risks recreating federal state conflict would be difficult to call progress.
Whatever Congress writes next should make sense to the farmer growing the crop, the scientist testing it, the extractor processing it, the manufacturer formulating it, the regulator enforcing the law and the consumer ultimately using it.
If those people cannot reasonably read the same statute and understand the same rules, Washington isn’t finished writing the law.
Frequently Asked Questions
What Does Section 781 Change About Federal Hemp Law?
It retains the 0.3% total THC dry-weight limit for hemp plants, adds a 0.3% combined threshold for processing intermediates, and excludes finished products containing more than 0.4 milligrams of combined total THC and designated similar-effect cannabinoids per container.
When Is Section 781 Scheduled to Take Effect?
Under the law described in the article, the operative date is November 12, 2026. A Senate stopgap passed August 8 would delay most restrictions affecting naturally occurring cannabinoids to December 11, but it still required House approval and the president’s signature at the time of writing. The exclusion of non-naturally occurring cannabinoids would still begin in November.
Why Does the Intermediate Threshold Matter?
Extraction naturally concentrates cannabinoids. As a result, ordinary full-spectrum CBD distillates made from compliant hemp can exceed the 0.3% intermediate threshold, potentially making domestic processing legally impractical.
What Alternatives Has Congress Proposed?
The proposals include repealing Section 781, regulating hemp products through testing, labeling and age restrictions, restructuring cannabis policy more broadly, and creating a separate federal framework for hemp-derived THC beverages.
What Policy Approach Does the Article Recommend?
It recommends regulating the finished product according to dose, intended use, claims, manufacturing process, and risk instead of relying primarily on whether the source plant is classified as hemp or marijuana.
