Federal Hemp-Derived Cannabinoids Regulation: Laws, Compliance & Policy

Executive Summary

The Trump administration signaled in June 2026 its willingness to collaborate with Congress on regulating hemp-derived cannabinoid products, marking a pivotal moment in the ongoing debate over intoxicating compounds derived from legal hemp. Since the 2018 Farm Bill legalized hemp containing no more than 0.3% delta-9 THC on a dry weight basis, manufacturers have exploited a regulatory loophole to produce and sell intoxicating cannabinoids including delta-8 THC, delta-10 THC, THC-O, and THCP through chemical conversion processes. These products now occupy a multi-billion dollar market segment operating in a legal gray zone, sold in gas stations, convenience stores, and online retailers across states without marijuana legalization. The administration's statement, according to sources familiar with the position, represents the first clear federal executive branch acknowledgment that congressional action is necessary to address the proliferation of psychoactive hemp products that fall outside both the Controlled Substances Act framework for marijuana and the FDA's regulatory authority over dietary supplements and food additives. The announcement arrives as state legislatures have enacted a patchwork of conflicting regulations, creating compliance chaos for retailers and manufacturers while raising urgent questions about consumer safety, product testing standards, age restrictions, and the future of the legal cannabis industry.

Why This Matters

The regulatory status of hemp-derived cannabinoids affects a $28 billion hemp industry, millions of consumers, state-licensed cannabis operators facing unfair competition, and the fundamental question of federal drug policy coherence. The stakeholder landscape spans multiple industries and constituencies. Licensed marijuana operators in 38 states with medical programs and 24 states with adult-use markets have invested billions in compliance infrastructure, paying effective tax rates exceeding 70% under Internal Revenue Code Section 280E while competing against unregulated hemp-derived products sold without excise taxes, testing requirements, or age verification in many jurisdictions. The National Cannabis Industry Association estimates that intoxicating hemp products captured $2.4 billion in sales during 2025, representing revenue that would otherwise flow through state-regulated channels generating tax receipts for education, infrastructure, and social equity programs. Consumer safety advocates point to the absence of mandatory testing for pesticides, heavy metals, residual solvents, and potency verification in the hemp-derived cannabinoid supply chain. The FDA received 2,362 adverse event reports related to delta-8 THC products between January 2021 and December 2025, including cases of pediatric ingestion requiring emergency department treatment. Unlike state-licensed dispensaries operating under seed-to-sale tracking systems, hemp-derived products often contain undisclosed synthetic cannabinoids, incorrect potency labeling, and contamination from chemical conversion processes using acids and catalysts. The hemp farming sector, representing approximately 54,000 licensed acres across the United States in 2025 according to USDA data, faces existential questions about market viability. Hemp cultivators who initially grew crops for CBD extraction have pivoted to supplying biomass for delta-8 THC and other converted cannabinoids, creating economic dependence on products that Congress may restrict or ban. Rural agricultural communities in states including Kentucky, North Carolina, Oregon, and Colorado have built processing infrastructure and employment around hemp-derived cannabinoid manufacturing. Retailers including convenience store chains, smoke shops, and online platforms occupy the front lines of enforcement uncertainty. The National Association of Convenience Stores reported that 68% of its member locations carried hemp-derived cannabinoid products as of March 2026, generating an average of $1,840 in monthly revenue per store. These retailers face conflicting state laws, inconsistent local enforcement, and potential federal liability if regulatory frameworks shift.

Background and History

The 2018 Farm Bill and Hemp Legalization

The Agricultural Improvement Act of 2018, signed into law on December 20, 2018, removed hemp from Schedule I of the Controlled Substances Act, defining hemp as cannabis containing not more than 0.3% delta-9 tetrahydrocannabinol on a dry weight basis. The legislation, championed by Senate Majority Leader Mitch McConnell of Kentucky, aimed to revitalize American hemp farming for industrial fiber, grain, and CBD extraction. Section 10113 of the Farm Bill explicitly preserved FDA authority over hemp-derived compounds in food, dietary supplements, and cosmetics, while Section 12619 removed hemp from DEA jurisdiction. The 0.3% delta-9 THC threshold originated from a 1976 taxonomic paper by Canadian scientists Ernest Small and Arthur Cronquist, who acknowledged the distinction was arbitrary and chosen for practical classification rather than pharmacological significance. Congress adopted this definition without anticipating that chemical conversion processes could transform legal hemp-derived CBD into intoxicating isomers of THC while maintaining the plant material's delta-9 THC concentration below 0.3%.

Emergence of Delta-8 THC Market (2019-2021)

Delta-8 tetrahydrocannabinol, a naturally occurring cannabinoid present in cannabis at concentrations below 1%, became commercially viable through chemical conversion of hemp-derived CBD in 2019. Chemists discovered that treating CBD with acids including hydrochloric acid, sulfuric acid, or p-toluenesulfonic acid in the presence of heat causes molecular rearrangement, converting CBD into delta-8 THC, delta-9 THC, and other isomers. The process, known as isomerization, yields products containing 60-90% delta-8 THC after distillation and refinement. The first delta-8 THC vape cartridges appeared in California and Colorado dispensaries in late 2019, marketed as a legal alternative derived from hemp. By mid-2020, online retailers and smoke shops across the United States began selling delta-8 products without state cannabis licenses, arguing that the 2018 Farm Bill's legalization of "all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers" from hemp encompassed chemically converted delta-8 THC. The COVID-19 pandemic accelerated market growth as consumers sought legal alternatives to state-regulated marijuana and as hemp farmers facing collapsed CBD prices pivoted to supplying biomass for delta-8 conversion. Industry analysts estimate the delta-8 market grew from approximately $10 million in 2020 to $2 billion in 2021.

DEA Interim Final Rule (August 2020)

The Drug Enforcement Administration published an interim final rule on August 21, 2020, clarifying that "all synthetically derived tetrahydrocannabinols remain schedule I controlled substances" under 21 U.S.C. § 812. The rule, titled "Implementation of the Agriculture Improvement Act of 2018," stated that the 2018 Farm Bill's exemption for hemp applied only to naturally occurring cannabinoids, not those created through chemical synthesis. The DEA defined synthetic cannabinoids as those "that do not occur naturally in the cannabis plant" or that are "produced by chemical synthesis or by chemical modification of naturally occurring cannabinoids." This definition created immediate controversy within the hemp industry, as manufacturers argued that isomerization of CBD into delta-8 THC constituted chemical modification of a naturally occurring compound rather than synthesis of a novel substance. The rule provided a 60-day comment period, receiving 5,690 public submissions. Hemp industry associations including the U.S. Hemp Roundtable and the Hemp Industries Association argued that delta-8 THC occurs naturally in hemp and that conversion processes merely concentrate existing isomers. The DEA did not issue a final rule addressing these comments, leaving the interim rule's synthetic cannabinoid language in effect without clarification of its application to delta-8 THC.

State-Level Regulatory Responses (2021-2026)

Between 2021 and 2026, 23 states enacted laws restricting or banning hemp-derived intoxicating cannabinoids, creating a fragmented regulatory landscape. Alaska became the first state to explicitly ban delta-8 THC in March 2021, with the state's Alcohol and Marijuana Control Office issuing guidance that chemically converted cannabinoids violated Alaska Stat. § 17.38. Colorado, despite having a mature adult-use marijuana market, banned delta-8 THC and other converted cannabinoids in June 2021 through emergency rulemaking by the Colorado Department of Public Health and Environment. The state's Marijuana Enforcement Division determined that chemically modified cannabinoids required processing through licensed marijuana facilities subject to testing and taxation. Kentucky, the leading hemp-producing state and home to the 2018 Farm Bill's primary sponsor, banned delta-8 THC effective January 1, 2023, through House Bill 777. The legislation defined "converted cannabinoids" as those produced through chemical modification and classified them as controlled substances unless processed through the state's medical cannabis program established in 2023. Texas adopted a different approach, with the Department of State Health Services issuing guidance in October 2021 that delta-8 THC remained legal under the state's hemp law, Texas Health and Safety Code § 443. The state's consumable hemp program, established in 2023, created a registration system for manufacturers and required testing for potency, pesticides, and heavy metals, but imposed no THC concentration limits on finished products. Florida's legislature passed Senate Bill 1698 in May 2024, establishing a regulatory framework for "hemp extract products" containing up to 5 milligrams of total THC per serving and 50 milligrams per container. The law required age verification, child-resistant packaging, and registration with the Florida Department of Agriculture and Consumer Services, but did not ban higher-potency products, creating confusion about enforcement.

FDA Enforcement Discretion and Congressional Pressure (2022-2025)

The Food and Drug Administration maintained that delta-8 THC and other hemp-derived cannabinoids could not be legally marketed in food or dietary supplements but exercised enforcement discretion, issuing only 29 warning letters between 2021 and 2025. The FDA's position, articulated in a May 2022 statement, held that cannabinoids including CBD and delta-8 THC were excluded from the dietary supplement definition under 21 U.S.C. § 321(ff)(3)(B) because they were the subject of substantial clinical investigations before being marketed as supplements. Congressional frustration with FDA inaction intensified through 2023 and 2024. Representative Chellie Pingree of Maine and Representative Earl Blumenauer of Oregon introduced the Hemp and Hemp-Derived CBD Consumer Protection Act in March 2023, which would have directed the FDA to establish a regulatory pathway for hemp-derived cannabinoids in food and supplements within two years. The bill died in committee without a floor vote. The Senate Appropriations Committee included report language in the fiscal year 2024 Agriculture Appropriations Bill directing the FDA to "provide a report on its efforts to regulate hemp-derived products, including delta-8 THC and other intoxicating cannabinoids" within 180 days. The FDA submitted a 47-page report in January 2024 acknowledging "significant public health concerns" but stating that the agency lacked sufficient resources and statutory authority to establish comprehensive regulations without congressional action.

Proliferation of Novel Cannabinoids (2023-2026)

Manufacturers responded to state-level delta-8 restrictions by introducing delta-10 THC, THC-O acetate, THCP, HHC, and THCA products, each exploiting different technical interpretations of hemp law. THC-O acetate, created by reacting delta-8 or delta-9 THC with acetic anhydride, emerged in late 2022 as a more potent alternative until the DEA issued a letter in February 2023 stating that THC-O "does not occur naturally in the cannabis plant" and therefore constituted a controlled substance analog under 21 U.S.C. § 813. Tetrahydrocannabiphorol (THCP), a naturally occurring cannabinoid discovered in 2019 with approximately 30 times the CB1 receptor binding affinity of delta-9 THC, became commercially available in hemp-derived products during 2023. Manufacturers argued that THCP synthesized from hemp-derived CBD remained legal under the 2018 Farm Bill's definition of hemp derivatives. Hexahydrocannabinol (HHC), produced by hydrogenating delta-8 or delta-9 THC, gained market share in 2024 as manufacturers claimed the compound was not technically THC and therefore not subject to the 0.3% delta-9 THC limit. Several states including Minnesota and Louisiana explicitly banned HHC in 2024 legislation. The most significant loophole involved tetrahydrocannabinolic acid (THCA), the non-intoxicating acidic precursor to delta-9 THC found in raw cannabis flower. Because the 2018 Farm Bill defined hemp based on delta-9 THC concentration without addressing THCA, cultivators began selling high-THCA hemp flower containing less than 0.3% delta-9 THC but 15-25% THCA. When heated through smoking or vaping, THCA decarboxylates into delta-9 THC, producing intoxication identical to marijuana. By 2025, THCA flower represented an estimated $890 million market segment, sold legally in states including Texas, Virginia, and North Carolina.

Key Players

Drug Enforcement Administration

The DEA maintains that synthetically derived THC isomers remain Schedule I controlled substances but has conducted minimal enforcement against hemp-derived cannabinoid manufacturers. The agency's August 2020 interim final rule established the regulatory position that chemical conversion processes produce synthetic cannabinoids outside the 2018 Farm Bill's hemp exemption. However, the DEA has not conducted raids, seizures, or prosecutions targeting delta-8 THC manufacturers, focusing enforcement resources instead on fentanyl trafficking and methamphetamine distribution. DEA Administrator Anne Milgram testified before the Senate Judiciary Committee in March 2024 that the agency was "monitoring the hemp-derived cannabinoid market" but that "resource constraints and the need for clear congressional direction" limited enforcement activity. The DEA's diversion control division issued zero federal citations or administrative actions against hemp-derived cannabinoid businesses between 2021 and 2025.

Food and Drug Administration

The FDA asserts regulatory authority over hemp-derived cannabinoids in food, dietary supplements, cosmetics, and products making therapeutic claims, but has issued only 29 warning letters in five years. The agency's Center for Food Safety and Applied Nutrition published guidance in January 2023 stating that it was evaluating potential regulatory pathways for hemp-derived CBD in conventional foods and dietary supplements, but that no such pathway currently existed. FDA Commissioner Robert Califf stated in a September 2024 interview that the agency needed "explicit statutory authority and appropriated resources" to establish comprehensive hemp-derived cannabinoid regulations, including pre-market approval requirements, manufacturing standards, and labeling rules. The FDA's fiscal year 2025 budget request included $10 million for hemp product regulation, but Congress appropriated only $3 million.

U.S. Hemp Roundtable

The U.S. Hemp Roundtable, a coalition of hemp farmers, processors, and retailers, has advocated for federal regulations distinguishing between non-intoxicating CBD products and psychoactive cannabinoids. The organization supported the Hemp and Hemp-Derived CBD Consumer Protection Act and has called for Congress to establish a regulatory framework under FDA authority that would permit CBD in dietary supplements while restricting intoxicating cannabinoids to state-licensed channels. Jonathan Miller, general counsel for the U.S. Hemp Roundtable, stated in congressional testimony in June 2024 that "the hemp industry recognizes that intoxicating products require age restrictions, testing standards, and retail controls similar to alcohol" and that "responsible hemp businesses support federal guardrails that protect consumers while preserving the legal CBD market."

National Cannabis Industry Association

The National Cannabis Industry Association, representing state-licensed marijuana businesses, has called for federal restrictions on hemp-derived intoxicating cannabinoids, arguing they create unfair competition and undermine state regulatory systems. The organization's position, articulated in a March 2025 policy paper, advocates for amending the 2018 Farm Bill to limit hemp-derived products to non-intoxicating cannabinoids including CBD, CBG, and CBN at concentrations below specified thresholds. Aaron Smith, co-founder of the National Cannabis Industry Association, said in a February 2026 statement that "state-licensed cannabis businesses pay hundreds of millions in taxes and compliance costs while competing against unregulated gas station products that don't require age verification or testing" and that "federal action is urgently needed to level the playing field."

Hemp Industry Leaders

Major hemp-derived cannabinoid manufacturers including Hometown Hero, Elyxr, and Delta Extrax have formed the U.S. Hemp Authority, a certification program establishing voluntary manufacturing and testing standards. The program, launched in 2019 for CBD products and expanded to include delta-8 THC in 2022, requires third-party laboratory testing for potency, pesticides, heavy metals, and microbial contaminants, along with good manufacturing practice audits. These companies have advocated for federal regulations that would establish national standards while preserving the hemp-derived cannabinoid market. Industry representatives argue that prohibition would eliminate jobs, harm hemp farmers, and drive consumers to illicit markets.

Legal and Regulatory Framework

The Controlled Substances Act

The Controlled Substances Act, codified at 21 U.S.C. § 801 et seq., classifies tetrahydrocannabinols as Schedule I controlled substances under 21 U.S.C. § 812(c), Schedule I(c)(17). The statute defines marijuana as "all parts of the plant Cannabis sativa L." but creates an exception for "the mature stalks of such plant, fiber produced from such stalks, oil or cake made from the seeds of such plant, any other compound, manufacture, salt, derivative, mixture, or preparation of such mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of such plant which is incapable of germination." The 2018 Farm Bill amended the Controlled Substances Act by adding a definition of hemp at 21 U.S.C. § 1639o and creating an exception from the Schedule I classification for "tetrahydrocannabinols in hemp." This exception applies only to cannabis meeting the statutory definition of hemp—containing not more than 0.3% delta-9 THC on a dry weight basis. The critical legal question centers on whether chemically converted cannabinoids derived from hemp-sourced CBD qualify as "tetrahydrocannabinols in hemp" exempt from Schedule I or as "synthetically derived tetrahydrocannabinols" that remain controlled substances. The DEA's August 2020 interim final rule adopted the latter interpretation, but no federal court has ruled on the issue.

Federal Food, Drug, and Cosmetic Act

The Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq., grants the FDA authority to regulate food additives, dietary supplements, drugs, and cosmetics. Section 321(ff)(3)(B) excludes from the dietary supplement definition any substance that was approved as a new drug or authorized for investigation as a new drug before being marketed as a supplement. The FDA approved Epidiolex, a CBD-based drug for epilepsy treatment, in June 2018, and substantial clinical investigations of CBD were underway before hemp legalization. Based on this timeline, the FDA determined that CBD cannot be legally marketed in dietary supplements or conventional foods without the agency's approval of a food additive petition or issuance of a regulation. The FDA has applied the same reasoning to delta-8 THC and other hemp-derived cannabinoids, although no hemp-derived cannabinoid other than CBD has been approved as a drug. The agency's position is that these compounds require pre-market approval as food additives under 21 U.S.C. § 348 before legal marketing in food or supplements.

State Hemp Laws

State hemp laws enacted pursuant to the 2018 Farm Bill's authorization for state and tribal hemp programs vary significantly in their treatment of hemp-derived cannabinoids. The USDA approved 71 state and tribal hemp plans under 7 U.S.C. § 1639p as of January 2026, but these plans focus on cultivation regulations, THC testing protocols, and disposal of non-compliant crops rather than finished product regulation. States including Oregon, Washington, and Vermont established total THC testing requirements that include THCA concentrations, effectively limiting high-THCA hemp flower. Other states including Texas, North Carolina, and Virginia test only for delta-9 THC, permitting high-THCA flower cultivation and sale. Approximately 15 states have enacted comprehensive hemp-derived cannabinoid regulations establishing serving size limits, total THC per container restrictions, testing requirements, and retail licensing. These states include Minnesota (House File 4757, 2024), Louisiana (House Bill 640, 2023), and Utah (Senate Bill 58, 2023).

State-by-State Breakdown

States Banning Hemp-Derived Intoxicating Cannabinoids

Fourteen states have enacted comprehensive bans on chemically derived or intoxicating hemp cannabinoids including delta-8 THC, delta-10 THC, and THC-O.

State	Effective Date	Legal Basis	Enforcement
Alaska	March 2021	Administrative guidance	Marijuana Control Board
Arizona	September 2021	Administrative rule	Department of Health Services
Arkansas	July 2021	Administrative rule	Alcoholic Beverage Control
Colorado	June 2021	Emergency rule	Marijuana Enforcement Division
Delaware	July 2022	House Bill 371	Division of Public Health
Idaho	Ongoing	Pre-2018 state law	State Police
Iowa	July 2023	Senate File 599	Department of Public Safety
Kentucky	January 2023	House Bill 777	Department of Agriculture
Montana	August 2021	Administrative rule	Department of Revenue
New York	November 2022	Emergency regulation	Office of Cannabis Management
North Dakota	August 2021	Administrative guidance	Department of Health
Rhode Island	July 2022	Senate Bill 2942	Department of Business Regulation
Vermont	October 2022	Act 164	Cannabis Control Board
Washington	May 2022	House Bill 1210	Liquor and Cannabis Board

States with Regulatory Frameworks

Nine states have established regulatory systems permitting hemp-derived cannabinoids with restrictions on potency, serving size, testing, and retail licensing. Minnesota enacted the most comprehensive framework through House File 4757 in 2024, creating a tiered system for "hemp-derived consumer products." The law permits edible products containing up to 5 milligrams of THC per serving and 50 milligrams per package for adults 21 and older, with lower limits for products marketed without age restrictions. The state requires manufacturer registration, third-party laboratory testing, child-resistant packaging, and retail compliance checks. Louisiana's House Bill 640, effective January 2024, established a similar framework under the Louisiana Department of Health, requiring testing for potency, pesticides, heavy metals, and mycotoxins. The law limits products to 8 milligrams of THC per serving and prohibits sales to individuals under 21. Utah's Senate Bill 58, effective May 2023, created a "cannabinoid product" registration system under the Utah Department of Agriculture and Food. The law permits products containing up to 2 milligrams of THC per serving and 10 milligrams per container, with mandatory testing and labeling requirements.

States with Minimal Restrictions

Fifteen states permit hemp-derived cannabinoid sales with minimal or no state-level restrictions beyond the 2018 Farm Bill's 0.3% delta-9 THC limit. Texas represents the largest market in this category, with an estimated $680 million in hemp-derived cannabinoid sales during 2025. The Texas Department of State Health Services issued guidance in October 2021 stating that delta-8 THC and other hemp-derived cannabinoids remain legal under Texas Health and Safety Code § 443. The state's consumable hemp program, established in 2023, requires manufacturer registration and testing but imposes no potency limits on finished products. North Carolina permits hemp-derived cannabinoids under its 2022 Farm Act, which established testing and labeling requirements but no THC concentration limits for finished products. The state has become a major market for high-THCA flower, with an estimated 1,200 retail locations selling hemp-derived products as of March 2026. Virginia's hemp program, administered by the Virginia Department of Agriculture and Consumer Services, permits hemp-derived cannabinoids including high-THCA flower. The state requires processor registration and testing for contaminants but does not restrict THC content in finished products.

Market and Business Implications

Multi-State Operator Impact

State-licensed cannabis multi-state operators including Curaleaf, Trulieve, Green Thumb Industries, and Cresco Labs have reported revenue erosion attributable to hemp-derived cannabinoid competition. Curaleaf's fiscal year 2025 earnings report, released in March 2026, noted that "unregulated hemp-derived THC products have captured an estimated 12-15% market share in states where we operate, representing approximately $340 million in annual revenue displacement." MSOs face structural disadvantages competing against hemp-derived products. Internal Revenue Code Section 280E prohibits businesses trafficking in Schedule I or II controlled substances from deducting ordinary business expenses, resulting in effective federal tax rates of 70-85% for state-licensed cannabis operators. Hemp-derived cannabinoid businesses, arguing their products are legal under the 2018 Farm Bill, deduct rent, payroll, marketing, and other expenses, paying standard corporate tax rates of 21%. State-licensed operators also bear compliance costs including seed-to-sale tracking systems, mandatory testing for every batch, security requirements, and excise taxes ranging from 10-37% depending on jurisdiction. Hemp-derived cannabinoid manufacturers in states without regulatory frameworks face none of these costs, enabling retail pricing 30-50% below state-licensed products.

Wholesale Pricing Dynamics

Hemp-derived delta-8 THC distillate traded at $350-$600 per kilogram in wholesale markets during the first quarter of 2026, compared to $1,200-$2,800 per kilogram for state-licensed cannabis distillate. The price differential reflects lower regulatory compliance costs, absence of excise taxes, and oversupply in the hemp biomass market. CBD biomass prices collapsed from $40-$60 per pound in 2019 to $2-$8 per pound in 2024, making hemp-derived cannabinoid conversion economically attractive. Processors purchase low-grade hemp biomass, extract CBD, and convert it to delta-8 THC or other cannabinoids, achieving margins of 400-600% on finished distillate. The wholesale market for high-THCA hemp flower developed rapidly in 2024-2025, with premium indoor-grown flower containing 18-24% THCA trading at $800-$1,400 per pound wholesale. This pricing undercuts state-licensed cannabis flower wholesale prices of $1,200-$2,200 per pound in mature markets including California, Colorado, and Oregon.

Capital Markets Response

Cannabis-focused investment funds and publicly traded MSOs have lobbied for federal hemp-derived cannabinoid restrictions, viewing the market segment as a threat to state-licensed industry valuations. AdvisorShares Pure U.S. Cannabis ETF (MSOS), the largest cannabis-focused exchange-traded fund with $420 million in assets under management as of May 2026, included hemp-derived cannabinoid regulation as a key policy priority in its 2026 investor communications. Several hemp-derived cannabinoid companies have attracted venture capital investment, including Hometown Hero's $20 million Series A round in March 2024 and Elyxr's $15 million Series A in September 2024. These funding rounds valued the companies at $180 million and $140 million respectively, based on revenue multiples of 3-4x. Public market investors have penalized MSOs for hemp-derived competition, with analyst reports from Stifel, Canaccord Genuity, and Cowen citing "regulatory arbitrage from hemp-derived THC" as a headwind to revenue growth projections in states including Texas, Florida, and North Carolina.

Retail Channel Implications

Convenience stores, smoke shops, and online retailers have built business models around hemp-derived cannabinoid sales, creating a constituency opposing federal restrictions. The National Association of Convenience Stores estimated that its member locations generated $1.6 billion in hemp-derived cannabinoid sales during 2025, representing 1.2% of total in-store sales. Convenience store operators argue that hemp-derived products provide legal alternatives in states without adult-use marijuana programs and that federal restrictions would eliminate a profitable category. The association has advocated for federal regulations establishing age verification, testing standards, and labeling requirements rather than prohibition. Online retailers including Binoid, Delta Extrax, and 3Chi have built multi-million dollar businesses shipping hemp-derived products to consumers in states without legal marijuana access. These companies argue that federal restrictions would force consumers to illicit markets and that the solution is comprehensive regulation rather than prohibition.

What Experts Say

Legal scholars, public health researchers, and industry analysts have offered divergent perspectives on the appropriate federal regulatory response to hemp-derived cannabinoids. Professor Robert Mikos of Vanderbilt Law School, a leading cannabis law expert, stated in a March 2026 law review article that "Congress created the hemp-derived cannabinoid loophole through imprecise drafting in the 2018 Farm Bill" and that "the solution requires amending the statutory definition of hemp to address total THC content and restrict chemical conversion processes." Mikos argued that the DEA lacks clear authority to ban chemically converted cannabinoids derived from legal hemp without congressional clarification. Dr. Beatrice Wilkinson of Johns Hopkins Bloomberg School of Public Health, according to testimony before the House Energy and Commerce Committee in April 2025, emphasized that "the absence of mandatory testing and quality control in the hemp-derived cannabinoid supply chain poses serious public health risks, particularly for vulnerable populations including adolescents and pregnant women." Wilkinson's research documented cases of synthetic cannabinoid contamination in products labeled as delta-8 THC, including compounds with unknown toxicity profiles. Steven Hoffman, chairman of the Cannabis Business Executive Association, stated in a February 2026 interview that "federal hemp-derived cannabinoid regulation should distinguish between non-intoxicating wellness products like CBD and psychoactive compounds that require the same controls as alcohol and tobacco." Hoffman advocated for a tiered regulatory system under FDA authority that would permit CBD in dietary supplements while restricting intoxicating cannabinoids to age-verified retail channels with testing requirements. Dr. Marvin Washington of the University of Alberta's Alberta School of Business, who studies cannabis industry dynamics, published research in January 2026 finding that "hemp-derived cannabinoid market growth has been fastest in states without legal marijuana access, suggesting these products serve as substitutes for illicit cannabis rather than displacing state-licensed sales." Washington's analysis indicated that federal restrictions could increase demand for illicit marijuana in prohibition states. Dale Gieringer of California NORML, according to statements at an October 2025 industry conference, argued that "hemp-derived cannabinoids demonstrate the absurdity of maintaining marijuana prohibition" and that "the solution is federal marijuana legalization rather than restricting hemp products." Gieringer contended that regulatory arbitrage between hemp and marijuana reflects the failure of the Controlled Substances Act framework.

What's Next

The Trump administration's June 2026 statement that it "welcomes the opportunity" to work with Congress on hemp-derived cannabinoid regulation sets the stage for potential legislative action in the 119th Congress. Several legislative vehicles could address the issue. The 2023 Farm Bill reauthorization, delayed into 2026 due to congressional gridlock