Keeping the Hemp Loophole Open Shouldn’t Hang the Hash Sellers

Why did Mitch McConnell do it? Some say it was the bourbon companies, others a misunderstanding of the ramifications of the original bill. Maybe he did it because he was sick of Rand Paul. At this point, any explanation for the decision by the senior senator from Kentucky to torpedo the same industry he helped launch back in 2018 is moot.

The big question is, what comes next? Will all parties – the spirits companies, the cannabis lobby, the beer distributors, the manufacturers and the anti-drug warriors, those interest groups competing to influence the sale of hemp-based THC products – be able to find a path forward in the year they’ve got left before Nov. 12, 2026, when the industry fades away like Brigadoon?

Is there a Hemp Farmer’s Almanac? Is there a photo of Mitch McConnell in there? If social media is to be believed, among the farmers in his home state, he’s gone from Johnny Appleseed to Johnny Dangerously, from folk hero to public enemy #1.

So, here’s the problem with tarring McConnell, though – anyone who has a sense of what should be vs. the cold reality of what is would never have relied so heavily on something that Sen. Slippery McTurtle helped foster. But they couldn’t help themselves: once would-be cannabis entrepreneurs realized McConnell had opened a loophole for hemp-based THC drinks in the original 2018 Farm Bill, the checkered flag had been waved, and the racers didn’t really care who got run over.

That’s why I’m still of two minds about the explosive growth of hemp-based D9 THC cannabevs that we’ve seen under the Farm Bill, and wonder, even if there’s a regulatory solution that can be found for the hemp lobby, whether that’s the right – or fair – thing to do.

Here’s my thinking: We keep hearing that the Delta-9 THC molecule is the same regardless of the source, whether it’s homegrown outdoor sativa or industrial-grade hemp, and at base, like many, I’m all for legalizing that molecule.

But I would argue that the rush to get hemp-based D9 products out onto the market has, in many ways, sold out the people who have spent years doing the hard work on behalf of that molecule. Not only did that rush create a lot of inferior products, it did so while turning a blind eye toward the rest of the cannabis industry. That has created infighting in the pro-legalization community at a time when the usual interests – booze manufacturers – either want to buy it out or bury it.

Looking at the 30-year history of the dispensary movement in the U.S., you see a state-by-state campaign that evolved from medical usage to recreational, with careful attention and regulation freeing risk-takers to enter the business – even though the federal government won’t bless their actions. The divide between federal prohibition and state legalization leaves marijuana pioneers burdened by high security costs, a paucity of banking options, incredibly high tax rates and risk-driven interest rates, along with no federal bankruptcy protection.

The hard work to establish legalization has also led to a variety of corrective social and criminal justice measures, including the expungement from criminal records of many small offenses that were unequally enforced against minority communities. The growth of legalization movements has brought recreational use to 24 states, and medical use to 40. Decriminalization and rescheduling of marijuana was being actively discussed by both U.S. presidential candidates in 2024 – one of the few areas of semi-agreement between the two campaigns.

They blazed the trail, and it hasn’t been easy.

Simultaneously, though, under the federal legislation that allowed for hemp beverages to grow, a lot of brands – particularly the ones that have looked to beverages as the untapped growth engine for mainstream cannabis use – decided that they couldn’t wait any longer. Like so many craft brewing operations using Kentucky hemp instead of Oregon hops, dozens of brands have either started up with hemp-based drinkables, switched to them from a marijuana-based extraction, or come up with a split formula program that places hemp drinks where they are allowed, and marijuana derived THC beverages in dispensaries.

It’s understandable: that 2018 Farm Bill – the .3 percent by weight loophole – created a federally legal, DTC-friendly spigot for all manner of hemp-based THC products, one unburdened by the same tax and regulation hurdles that marijuana businesses face, and a much deeper bench of retail targets, from liquor stores to gas stations, bars to breweries, Target stores to community co-op grocers. Instead of dispensaries – with their security guards, multiple ID checks, and video cameras – some of the states where hemp beverages initially popped up didn’t even have age requirements on the books around the purchase of intoxicating products.

With so little oversight, is it any wonder that the hemp-based brand economy grew so fast – but also that it
resulted in a lot of products being rushed to market with
low quality control, inconsistent effects, and little
consumer education?

It’s salt in the wound of the marijuana folks, who have had to go about it the hard way, sure – and they’ve reacted pretty quickly, pushing states with established dispensary channels like California, Massachusetts, and Colorado to force hemp companies to work under the same regulations as the rest of the cannabis businesses.

Equally risky, the hemp businesses poked the bear. States that have been very unfriendly to cannabis businesses like Texas, Tennessee, Kentucky and more have been some of the most fertile areas for the sale of intoxicating hemp products. Beyond that, those brands have been brazen enough in their customer come-ons product-wise that they’ve made it pretty easy for kids to score candy-flavored edibles from gas station clerks who just don’t know better.

Not everyone’s a bad actor, of course, but it’s not exactly a great look for an industry that wants to be taken seriously to play dumb around the idea that THC-infused Nerds and Sour Patch Kids might be consumed by kids – intentionally or unintentionally – when they’re picked up at some Waco convenience store.

Texas used that as the reasoning for an attempted statewide ban, which revealed another fault line: the hemp beverage business has proven too valuable to local beer wholesalers, who are facing tough times as their main product has started to decline. Which brings us to the strange bedfellows part of the column: the split in the THC molecule has also had a trippy effect in the beer business, where wholesalers and craft brewers are relying on hemp drinks to replace lost sales, while big brewers and spirits companies are fighting to set rules for the entire industry, although it’s clear they’d be happy to kill off the business if they can’t marry it.

I am trying hard not to judge the cannabis-native brands who went along with the move into hemp, with its much deeper bench of retail targets, rather than stick with a dispensary channel that considers a low-dose beer analog a cute novelty next to much higher margin pre-rolls and 100-milligram brownies. Once the door was open, it was a matter of survival – even OG edibles brand Kiva has started down the hemp highway, after all. But at the same time, they must have known that the states they were growing up in weren’t going to stand for hemp intrusions when they had spent so much money, time, and civic energy permitting and erecting state-sanctioned marijuana industries.

So is the McConnell rule really a betrayal? It depends on how you look at it – but unless the hemp interests recognize they need to include their fellow THC travelers in whatever kind of long range structures they want to put in place at a federal level, unless they put what are likely to be millions in lobbying graft to work on a system that creates some kind of reasonable footing for the recreational cannabis sellers of the world, I, for one, have a tough time summoning warm feelings for them. The Farm Bill loophole shouldn’t be a noose for the dispensary business.