Congress Introduces Bipartisan Bill to Regulate and Tax Hemp THC Products

Federal Framework Proposed for Hemp-Derived Intoxicants

The legislation would create a regulatory structure for hemp THC products rather than prohibiting them. It's the first serious congressional effort to resolve the legal ambiguity created by the 2018 Farm Bill. According to the bill text, products containing delta-8 THC, delta-10 THC, THC-O, and THCA would face federal excise taxes and labeling requirements similar to alcohol.

The proposal comes three months after the DEA published its interim final rule classifying most semi-synthetic cannabinoids as Schedule I controlled substances. That rule remains in effect pending final review. Compliance is required by October 2026.

Tax Structure Mirrors Alcohol Model

The bill imposes a tiered excise tax based on THC potency, starting at $1 per milligram for products above 5mg total THC. Products below that threshold would face a flat $0.50-per-unit tax. Revenue would fund FDA enforcement and state regulatory programs.

Key provisions include:

• Mandatory third-party lab testing for potency and contaminants
• Child-resistant packaging and warning labels
• Prohibition on sales to anyone under 21
• State opt-out authority for stricter local bans

The tax framework distinguishes between naturally occurring THCA in raw hemp flower and chemically converted delta-8 or delta-10. That's a technical distinction the DEA's rule collapsed into one category.

Timing Complicates Industry Relief Hopes

The bill faces steep procedural hurdles with fewer than six months before the DEA's compliance deadline. Congressional sources familiar with the legislative calendar said the proposal would need to attach to a must-pass spending bill to move before the October enforcement date.

Even with bipartisan support, standalone cannabis bills rarely advance in election years, and this one carries a tax increase that complicates floor votes.

The hemp industry has spent $18 million on lobbying since the DEA rule dropped in April, according to federal disclosure filings. Trade groups argue the sudden reclassification threatens 12,000 retail outlets and $28 billion in annual sales.

DEA Rule Remains in Effect During Debate

The interim final rule doesn't pause while Congress debates alternatives. Manufacturers and retailers must comply with the October deadline unless the DEA delays enforcement or a court injunction halts implementation. Two federal lawsuits challenging the rule's Administrative Procedure Act compliance are pending in district courts.

The DEA hasn't signaled willingness to extend the compliance window. An agency spokesperson said in June that the rule addresses "immediate public health risks" from unregulated intoxicants and will proceed on schedule.

Chemistry Definitions Central to Enforcement

The bill defines "semi-synthetic cannabinoid" more narrowly than the DEA's rule, exempting THCA that occurs naturally in hemp flower through biosynthesis. That distinction matters for cultivators growing high-THCA hemp strains that decarboxylate into delta-9 THC when smoked.

Under the proposed law, total THC concentration (delta-9 plus THCA on a dry-weight basis) determines tax liability. But naturally occurring THCA wouldn't trigger Schedule I classification. Isomerized cannabinoids like delta-8 derived from CBD through chemical conversion would face both taxation and stricter manufacturing standards.

This creates a two-track system: raw flower with native THCA gets lighter treatment than vape cartridges filled with converted delta-8 distillate.

State Enforcement Patchwork Likely to Persist

Even if the bill passes, state-level bans on intoxicating hemp products would remain valid under the opt-out provision. Fifteen states have already restricted or banned delta-8 sales through emergency rules or legislation. The federal framework would set a floor, not a ceiling.

For background on the state-by-state enforcement landscape and the DEA's reclassification timeline, see the CannIntel topic hub on Hemp THC Regulation.

Industry groups called the bill a "workable compromise" but noted that without fast-track passage, the October deadline forces businesses to choose between shuttering product lines or risking federal enforcement. The next 90 days will determine whether Congress can move faster than the regulatory clock.