Hemp-derived THC remains both a billion-dollar opportunity ideal for small businesses and a guarantee of serious trouble for state governments in 2025.
As drastically different situations in California and Florida demonstrate, whether hemp is a golden opportunity or a huge business risk all depends on where you live.
And the reality is changing by the day.
On one hand, Gov. Gavin Newsom’s announcement last week that businesses in the California market are almost totally compliant with a blanket ban on hemp-derived THC presents a dream scenario for many in the state’s $32 billion legal marijuana industry: Consumers are steered squarely toward licensed cannabis stores thanks to proactive government enforcement.
The flip side is the situation in Florida, where, unlike last year, Republican Gov. Ron DeSantis will not have to decide whether to sign or veto a bill that jeopardizes the state’s hemp industry, which could be worth more than $5 billion, according to a 2023 estimate.
That’s because, the week before Newsom’s boasts, the Florida Legislature’s regular session ended May 2 without lawmakers passing either of two proposed intoxicating hemp regulatory bills that would have forced many current operators out of business.
‘Federal inaction’ causing state-level ‘battles’
Though hemp regulations are stalemated in Florida, other states are moving ahead.
In Alabama, Gov. Kay Ivey on Wednesday signed into law new rules that limit THC, outlaw smokable hemp and impose restrictions on online and direct-to-consumer sales.
Similar rules are under consideration in:
- Texas, which has the nation’s largest market for hemp-derived THC products.
- Ohio, where operators in the state’s immature adult-use marijuana market view intoxicating hemp as an unwelcome competitor.
Though hemp regulations are stalemated in Florida, industry operators in other states are anxiously awaiting the progress of bills that could curtail the industry.
The scattershot situation is the result of Congress’ inability to pass a new Farm Bill or stand-alone legislation that addresses the “loophole” in the 2018 Farm Bill that’s led to the proliferation of intoxicating hemp-derived THC products across the country.
Such products include hemp-derived beverages that many operators, including major marijuana multistate operators, view as a vital, new potential revenue source that’s also a rare opportunity for interstate commerce.
“Delays in federal Farm Bill negotiations have had real-world consequences, creating a fragmented landscape of state regulations for cannabis products due to the absence of federal action,” said Michael Bronstein, president of the American Trade Association for Cannabis and Hemp, a Washington, D.C.-based lobby group.
“Battles are taking place in states due to federal inaction, pitting the desire to preserve the integrity of state-regulated markets up against unregulated, untested and oftentimes synthetically converted products.”
Read more at MIBizDaily