The President’s signature on the bill ending the government shutdown marked a major shift for the U.S. hemp industry. Buried deep in the appropriations bill was a single provision redefining “hemp” and establishing a 0.4 mg total THC limit per finished product.

In one stroke, Congress ended the years-long experiment with hemp-derived intoxicating products such as delta-8 and delta-10 THC — and, in doing so, reignited the debate over hemp and cannabis regulation in the U.S.

This outcome was foreseeable, though not inevitable. It resulted from three factors: an industry that tested legal boundaries, legal interpretations that overlooked core food and supplement laws, and an FDA that prioritized caution over clarity.

A Regulatory Vacuum Filled by Congress

Since the passage of the 2018 Farm Bill, hemp-derived cannabinoids have existed in a regulatory gray zone. The law removed hemp from the Controlled Substances Act but did not amend the Food, Drug, and Cosmetic Act (FD&C Act). Hemp ingredients intended for use in food or supplements still require lawful pathways — either Generally Recognized As Safe (GRAS) determinations or New Dietary Ingredient (NDI) notifications supported by safety data.

The FDA had the authority to police this market from the outset. Under existing law, products containing cannabinoids that are not GRAS or approved food additives are adulterated, and dietary supplements containing such ingredients are unlawful unless they meet the “reasonable expectation of safety” standard for NDIs. Yet the agency largely abstained from using those tools.

This reluctance enabled a marketplace where intoxicating cannabinoids proliferated, often marketed as “legal hemp” despite public health concerns and questionable manufacturing practices. Due to inconsistent enforcement, Congress ultimately established clear boundaries where the FDA had not.

An Overcorrection with Unintended Consequences

The new federal law, which caps total THC at 0.4 mg per finished product and excludes synthetic or chemically converted cannabinoids, will remove most intoxicating hemp products from the market. However, it may also affect lawful, non-intoxicating products containing trace amounts of THC or THCA from full-spectrum extracts.

This change will create confusion and increase compliance costs for responsible hemp producers, many of whom have already invested in testing, traceability, and compliance with state regulations. A blanket THC limit, not based on toxicological assessment or intended use, is a policy shortcut rather than a safety solution.

Ironically, this situation could have been avoided if the FDA had exercised its authority earlier and if the industry had recognized that hemp-derived ingredients were not lawfully marketed in foods or supplements without safety substantiation.

A Path Forward: GRAS Under the Right Structure

It bears emphasizing that not all hemp ingredients are problematic. Certain non-intoxicating constituents — such as hemp seed oil, hemp seed protein, and other naturally derived fractions — have achieved GRAS status. With proper safety data, clear intended-use parameters, and appropriate labeling, other hemp-derived cannabinoids could potentially be recognized as GRAS under a legitimate regulatory framework.

This process requires scientific evidence, not speculation. GRAS status is not a loophole; it is a rigorous, data-driven process based on toxicology, pharmacology, and exposure modeling. Compounds that cannot be shown to be safe at intended use levels do not meet this standard. Those that can, supported by transparent data and consistent manufacturing controls, should be eligible for lawful inclusion in foods or supplements.

A clear path forward requires a regulatory system that explicitly differentiates between safe, well-characterized hemp ingredients — backed by robust safety data and proper labeling — and those that present demonstrable risks. Policymakers should move away from arbitrary milligram limits and instead prioritize frameworks that allow for scientific evaluation and case-by-case approval of hemp-derived products based on intended use and toxicological evidence.

Shared Responsibility, Shared Lessons

The hemp industry, its advisors/consultants, and the FDA each contributed to the conditions that led to this legislation. While none acted with ill intent, their actions blurred the boundaries between “hemp” and “cannabis” while ignoring that the Farm Bill only decriminalized the cultivation of hemp but did not necessarily make it lawful to ignore the Federal Food, Drug, and Cosmetic Act.

The lesson learned is not to stifle innovation, but to recognize that innovation without a regulatory foundation can lead to instability. Markets based on uncertain legality cannot sustain growth. Science, safety, and compliance are not obstacles but prerequisites for success. In essence, the story of hemp may become the story of the functional beverage and food industry by advancing innovation untethered to the regulatory constraints that exist.

Looking Ahead: Time for a Real Federal Cannabis Framework

Recent events highlight the need for a coherent federal framework for cannabis regulation, one that unifies hemp, CBD, and marijuana under a consistent, science-based structure instead of a patchwork of state programs and congressional amendments.

The next step should move beyond crisis-driven legislative fixes and toward integrated oversight, with FDA, USDA, DEA, and state regulators working from a shared foundation of public health and product integrity.

In my next article, we’ll explore what such a framework could include, from GRAS-based ingredient reviews to harmonized THC thresholds based on toxicology rather than politics, and how the industry can help shape it before another crisis prompts a rushed solution.

Conclusion

The hemp industry’s challenges reflect years of regulatory avoidance and collective complacency, with ramifications for other areas of the food industry. Now, there is an opportunity to establish a lawful, transparent, and credible sector built on science and public trust. Hopefully, both the regulated and the regulator will learn that ignoring the rules can have significant consequences when it wasn’t necessary in the first instance.

FDA, policymakers, and the industry should prioritize collaboration to establish evidence-based, transparent, and lawful regulatory structures. This unified effort will foster long-term legitimacy for the hemp sector and provide clear compliance pathways, minimizing confusion for all stakeholders regardless of ingredient.

However, lax enforcement (warning letters are not enforcement) breeds indifference and ultimately the potential collapse of a promising industry, which could have been avoided if the stakeholders and the regulators had done their jobs. All is not necessarily lost, but the hemp industry must be willing to compromise or face severe consequences a year from now.

About the Author: Todd Harrison is Partner with Venable, which is located in Washington, D.C. He advises food and drug companies on a variety of FDA and FTC matters, with an emphasis on dietary supplement, functional food, biotech, legislative, adulteration, labeling and advertising issues. He can be reached at 575 7th St. NW, Washington, D.C. 20004, Tel: 202-344-4724; E-mail: taharrison@venable.com.