2025 Federal Hemp Reclassification: Congress Moves to Redefine “Hemp” and Ban Most Hemp-Derived THC Products
By Cassia Furman, Shawn Hauser, Juliana Todeschi, Bridgette Nikisher
Nov 13, 2025
This week, the regulated hemp industry is weathering the most significant federal policy shift since hemp was removed from the Controlled Substances Act in the 2018 Farm Bill. Language added to the FY2026 Agriculture, Rural Development, Food and Drug Administration and Related Agency Appropriations Act (the “Agricultural Appropriations Bill” or “Bill”) amends the federal definition of “hemp” to effectively ban most commercial hemp and cannabinoid products nationwide.
The new definition reshapes the entire hemp market, from cultivation to retail. The change dramatically impacts businesses manufacturing or selling products made with hemp-derived cannabinoids such as delta-9 THC, delta-8 THC, and THCA, as well as other cannabinoids to be identified by the FDA and HHS Secretary. The Bill also bans any cannabinoids that are 1) not capable of being naturally produced by a Cannabis sativa L. plant; OR 2) are capable of being naturally produced by a Cannabis sativa L. plant but were synthesized or manufactured outside the plant.
Overview of Federal Hemp Redefinition Legislative Process
The legislative process resulted in an unusual combination of a short-term Continuing Resolution (CR) and the full-year FY2026 Agriculture Appropriations Bill, which includes the restrictive hemp language championed by Senator Mitch McConnell (R-KY). McConnell’s fellow Kentucky senator Rand Paul (R-KY) pushed for an amendment to strip the restrictive hemp language from the Bill. Still, he could not garner sufficient support with reopening the government on the line. The restrictive hemp language remained in the Bill that passed the Senate on November 10, 2025, passed the House on November 12, 2025, and was signed by President Trump. The hemp language in the Bill will now take effect in one year.
Key Changes in the Proposed Hemp Definition
Total THC Standard
Lawful hemp is defined by the inclusion of not more than 0.3 percent Total THC on a dry weight basis, inclusive of THCA and any other cannabinoids that have similar effects as THC (to be designated by the HHS Secretary), for example, delta-8 THC. This replaces the 2018 Farm Bill standard that only measured delta-9 THC.
Strict Potency Limit of 0.4 mg Total THC per Container
To qualify as legal "hemp," final hemp-derived cannabinoid products may not exceed 0.4mg Total THC per container. “Container” is defined as “the innermost wrapping, packaging, or vessel in direct contact with a final hemp-derived cannabinoid product,” which is intended for final retail sale and expressly excludes bulk packaging.
Ban on Synthetic/Converted Cannabinoids
Both final hemp products and “Intermediate Hemp Material” (commonly known as Work-in-Progress or “WIP”) are excluded from the legal definition of hemp if they contain any synthetic or manufactured cannabinoids (naturally occurring cannabinoids synthesized outside the plant). These products are reclassified as Schedule I marijuana.
WIP Restrictions
The Bill excludes WIP with more than 0.3% Total THC from the definition of hemp, making any WIP exceeding this threshold federally illegal marijuana. This creates significant issues for hemp manufacturers, given that extracts generally exceed this amount.
Hemp Seeds
Viable seeds are explicitly excluded from the definition of hemp if the parent plant exceeds the 0.3% Total THC threshold (meaning seeds derived from marijuana are illegal). Furthermore, seeds are categorized as "industrial hemp" only if intended for specific non-consumable purposes, such as producing fiber, stalk, non-cannabinoid oils, or for limited research.
Timeline: One-Year Transition Period
The new federal hemp restrictions will take effect on November 12, 2026. The U.S. Food and Drug Administration (FDA) is directed to issue guidance within ninety (90) days that identifies all relevant cannabinoids and clarifies the definition of "container."
What Happens Next?
Implementation Date: The Agricultural Appropriations Bill became law on November 12, 2025, meaning the hemp restrictions will take effect on November 12, 2026.
The hemp industry now focuses on legislative efforts to revisit the hemp definition or otherwise enable the lawful sale of hemp-derived cannabinoids before the ban. Potential vehicles include appropriations/spending bills (including January 2026 when the current CR expires), a 2026 Farm Bill effort, or, prospectively, standalone legislation. However, the latter would be a huge hurdle in this Congress.
If the restrictive hemp language remains in place following the November 12, 2026, effective date, all hemp products exceeding the thresholds will be deemed federally illegal cannabis products subject to state cannabis regulations, federal restrictions on interstate commerce, and punitive IRS Section 280E tax treatment, among other changes. Various state hemp programs will require amendments that correlate with the new federal status. Please contact us for additional details.
Conclusion: A Pivotal Moment for the U.S. Hemp Industry
While the 0.4mg THC cap effectively guts the hemp industry as we know it, this moment marks a historic pivot in federal cannabis policy. For the first time in modern history, the U.S. government is explicitly sanctioning the presence of THC in consumable hemp products, marking a watershed acknowledgment of cannabinoids in commerce. Even though the one-year transition period offers limited time to adapt, it also works as a catalyst to again press for federal policy reform on cannabinoid products, regardless of source.
Vicente LLP’s hemp and cannabinoid regulatory attorneys are actively tracking the federal hemp ban and legislative updates. Contact our team with questions about the impact of this bill and its implications for the future of the hemp industry.