Written by: Bianca Lindau and Elizabeth Bestwick
A Shifting Federal Landscape for Hemp
Congress’s passage of the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Act, implemented through amendments to 7 U.S.C. § 1639o, marks a major inflection point for the roughly $30 billion US consumable hemp market. Effective November 12, 2026, the law closes the long-standing “hemp loophole” by narrowing the federal definition of hemp and imposing strict total THC caps. As a result, most intoxicating hemp products will be reclassified as marijuana under the Controlled Substances Act.[1]
What the Law Changes
The amendments enacted through H.R. 5371 (Continuing Budget Resolution, signed November 12, 2025) significantly overhaul the federal definition of hemp under 7 U.S.C. § 1639o, replacing the familiar delta-9 THC standard with a broader total THC framework. Under the revised statute, hemp may contain no more than 0.3% tetrahydrocannabinols, including tetrahydrocannabinolic acid (THCA), a meaningful departure from the prior focus on delta-9 THC alone.
This law also introduces several categorical exclusions from the hemp definition, including certain seeds, intermediate and final products, and final hemp-derived cannabinoid products that either contain synthetic cannabinoids or exceed 0.4 mg of combined total THC and other cannabinoids per container. At the same time, the statute expressly includes industrial hemp within the hemp definition and adds new statutory definitions for “hemp-derived cannabinoid product,” “intermediate hemp-derived cannabinoid product,” “final hemp-derived cannabinoid product,” and “container.”
In addition, the amendments direct the FDA to publish lists identifying cannabinoids naturally produced by the Cannabis sativa L. plant, a requirement that will further shape which products may lawfully remain on the market.
These changes reach well beyond product formulation, affecting manufacturing legality, contract compliance, tax exposure, and federal intellectual property protections. Businesses across the hemp supply chain now have less than a year to reassess operations and realign strategies.
What This Means Looking Ahead
Absent further congressional action, the next 11 months will demand that companies that manufacture, distribute, or sell hemp-derived products take stock on a product-by-product basis of whether their offerings can continue to be lawfully sold once the revised definition of hemp takes effect. Many products that were compliant under the prior delta-9 THC framework may no longer qualify as hemp under the new total THC standard or may fall within newly excluded product categories.
This transition period also unfolds alongside President Trump’s December 18, 2025 Executive Order, which directs executive-branch agencies to work with Congress to further update the statutory definition of “final hemp-derived cannabinoid products,” including by reassessing applicable THC limits with the
stated goal of preserving access to appropriate full-spectrum CBD products.[2] As a result, additional revisions to the statutory framework remain possible, adding a layer of uncertainty for companies planning for post-2026 compliance.
How Caldwell Supports Clients Through the Transition
Caldwell regularly advises clients navigating regulatory change and market disruption in highly regulated industries. We help hemp, cannabis, and adjacent businesses assess legal and commercial risk, review contracts and capital structures, protect and reposition IP portfolios, and evaluate restructuring or exit options where appropriate. As the November 2026 deadline approaches, early, strategic planning can be critical to preserving value, and we help clients stay ahead of the curve.
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Sources
[1] 7 U.S.C. § 1639o (definition of hemp), as amended by H.R. 5371 (2025).
[2] The White House. (2025, December 18). Increasing medical marijuana and cannabidiol research. https://www.whitehouse.gov/presidential-actions/2025/12/increasing-medical-marijuana-and-cannabidiol-research/