Going Up in Smoke: The Future of Hemp-Derived THC

by Josh Smith, Associate Member, University of Cincinnati Law Review Vol. 94

I. Introduction

In November 2025, at the height of the longest government shutdown in United States history, Congress enacted significant changes to federal hemp policy by embedding new tetrahydrocannabinol (“THC”) restrictions within its annual spending bill.¹ Because the spending bill was one of the only measures certain to pass once the shutdown ended, lawmakers used it as a vehicle to push through sweeping revisions to hemp regulation that had previously been long stalled.² Recent reporting shows that the legislation redefines hemp to incorporate total THC—including THCA and other similar cannabinoids—rather than just the narrower Delta-9 standard established under the 2018 Farm Bill (“Farm Bill”).³ The spending bill also imposes a strict limit of 0.4 milligrams of total THC per container, a threshold that would render many existing hemp-derived consumables now unlawful.⁴ In addition, the new definition excludes cannabinoids synthesized outside the plant, directly targeting large portions of the current market for hemp-derived intoxicating products.⁵ Although Congress has included a one-year transition period in the bill before these changes take place, early signs warn that the bill could dramatically disrupt or even eliminate key segments of the multi-billion-dollar hemp industry.⁶

This Article examines the emerging federal effort to restrict hemp-derived intoxicating products, focusing on Congress’s recent moves to redefine hemp, impose THC limits on processed hemp materials, and effectively prohibit the sale of Delta-8 and similar cannabinoids. Part II provides background on the legal and regulatory landscape that created the modern hemp industry. It explains the statutory language of the Farm Bill and the Delta-9 THC threshold. It also incorporates significant federal case law such as AK Futures LLC v. Boyd Street Distro, LLC, along with relevant administrative guidance defining the limits of the Drug Enforcement Administration’s (“DEA”) authority. Part III discusses Congress’s proposed redefinition of hemp and the spending-bill provisions restricting the sale of intoxicating hemp products. It further considers the potential impacts on interstate commerce, potential preemption issues involving existing state hemp laws, and the health impact this bill may have on others. This discussion assesses how the new framework conflicts with existing case law and may invite litigation from the hemp and manufacturing industries. Finally, Part IV concludes by evaluating the likely impact of these federal developments on producers, retailers, and consumers. It will outline possible consequences for the hemp and cannabis industries while providing policy considerations for regulating intoxicating cannabinoids in a manner that balances safety, economic interests, and federal-state coordination.

II. Background

A. Farm Bill

Congress fundamentally reshaped federal cannabis law through the Agriculture Improvement Act of 2018, known more commonly as the Farm Bill. The statute removed “hemp” from the Controlled Substances Act (“CSA”) by defining it as Cannabis sativa L. and “any part of that plant,” including “all derivatives, extracts, cannabinoids, isomers, acids, salts and salts of isomers,” that contain no more than 0.3 percent Delta-9 THC on a dry-weight basis.⁷ This definition marked the first time federal law expressly distinguished hemp from marijuana based on THC concentration. By delisting hemp and hemp-derived cannabinoids from Schedule I, Congress shifted primary regulatory oversight to the United States Department of Agriculture (“USDA”) while preserving the Food and Drug Administration’s (“FDA”) authority over ingestible products.⁸

The statute’s broad inclusion of “derivatives” and “cannabinoids” led many industry participants to interpret the Farm Bill as legalizing not only traditional hemp flower but also processed products containing hemp-derived cannabinoids such as cannabidiol (“CBD”).⁹ CBD is an active component of marijuana that does not cause a high and is commonly used in medical contexts to alleviate a range of symptoms.¹⁰ Federal agencies soon acknowledged that this language created legal ambiguity.¹¹ In its 2020 interim final rule (“IFR”), the USDA confirmed that hemp compliance is measured solely by Delta-9 THC levels, not by its conversion potential or intoxicating effect, further widening the regulatory gap. The DEA likewise stated that hemp-derived materials with Delta-9 THC levels below 0.3 percent fall outside the CSA, even if they contain.¹²

This statutory structure, combined with minimal federal enforcement, created conditions that enabled the emergence of intoxicating hemp-derived cannabinoids such as Delta-8 THC, Delta-9 THC, HHC, and THCP which deliver psychoactive effects despite originating from federally legal hemp.¹³ Manufacturers relied on the Farm Bill’s broad definitional language to argue that these compounds when produced from lawful hemp were federally permissible.¹⁴ By 2021, this interpretation had taken hold in federal courts, culminating in the Ninth Circuit’s landmark decision in AK Futures LLC v. Boyd Street Distro, LLC.¹⁵

B. Federal Interpretation of Hemp

Federal courts did not meaningfully confront the legal status of hemp-derived intoxicating cannabinoids until several years after Congress enacted the Farm Bill. The most consequential judicial interpretation emerged in AK Futures LLC v. Boyd Street Distro, LLC, where the Ninth Circuit Court of Appeals addressed whether Delta-8 THC derived from lawful hemp qualifies as “hemp” under federal law.¹⁶ The court held that Farm Bill’s plain text unambiguously legalized Delta-8 THC so long as the substance contains no more than 0.3 percent Delta-9 THC on a dry-weight basis.¹⁷

The dispute arose when AK Futures, a producer of Delta-8 vaping products, sought a preliminary injunction against a distributor selling counterfeit versions of its branded products.¹⁸ Because trademark protection requires a lawful underlying good, the court was required to determine whether the plaintiff’s Delta-8 products were legal under federal law.¹⁹ The Ninth Circuit emphasized that Congress explicitly included “all derivatives, extracts, [and] cannabinoids” of the hemp plant within the statutory definition of hemp, without distinguishing between naturally occurring and chemically converted cannabinoids.²⁰ The court rejected arguments that the Farm Bill excluded cannabinoids produced through isomerization or other processing techniques, concluding that the statute “compelled the result” that Delta-8 THC derived from lawful hemp qualifies as lawful hemp.²¹ The AK Futures LLC decision validated a rapidly expanding industry and limited the DEA’s ability to regulate Delta-8 THC under the CSA absent new congressional action. Ultimately, this decision intensified political pressure on Congress to revisit the Farm Bill’s definitional language—pressure that culminated the new federal restrictions at issue here.

C. Drug Enforcement Administration

In the years following the Farm Bill, federal agencies struggled to reconcile the statute’s broad definitional language with the emergence of hemp-derived cannabinoids capable of producing intoxicating effects. The DEA first addressed this ambiguity in the IFR, which implemented the Farm Bill’s amendments to the CSA.²² The IFR confirmed that hemp and hemp-derived materials are no longer controlled substances so long as they contain no more than 0.3 percent Delta-9 THC on a dry-weight basis.²³ It further stated that a cannabinoid’s legality turns on the concentration of Delta-9 THC in the final product, not on the presence of other cannabinoids or the potential for chemical conversion.²⁴

At the same time, the DEA maintained that “synthetically derived THC” remains a Schedule I substance under the CSA.²⁵ Yet the agency declined to define “synthetically derived,” leaving unresolved whether cannabinoids produced through isomerization—such as converting CBD into Delta-8 THC—constitute prohibited synthetic THC or permissible hemp derivatives. DEA officials have reiterated that cannabinoids produced through chemical synthesis remain controlled substances, even when derived from hemp.²⁶ The agency has taken the position that certain lab-generated cannabinoids fall squarely within Schedule I, underscoring the unstable regulatory boundary between hemp derivatives and synthetic THC.²⁷

This regulatory uncertainty, combined with the agency’s limited enforcement posture, enabled manufacturers to widely produce and market intoxicating hemp-derived cannabinoids. Industry participants rely on the Farm Bill’s text along with the DEA’s narrow focus on Delta-9 THC to argue that Delta-8 THC, Delta-10 THC, and similar compounds remained lawful so long as the final product met the Delta-9 threshold.²⁸ The absence of clear federal regulation allowed these products to proliferate nationwide, ultimately prompting judicial intervention in cases such as AK Futuresand escalating political pressure on Congress to revisit the scope of the Farm Bill.²⁹ This patchwork of administrative ambiguity and rapid commercial expansion set the stage for the sweeping restrictions introduced in Congress’s 2025 spending legislation.

III. Discussion

A. Interstate Commerce

The Commerce Clause in the United States Constitution has long established that Congress has the authority to regulate “commerce among the several states.”³⁰ Congress’s new THC limits in the spending bill materially affect the interstate hemp market that the Farm Bill intentionally nationalized.³¹ The Farm Bill expressly protected “the interstate commerce of hemp and hemp products,” preventing states from blocking federally compliant hemp from crossing their borders.³² Courts read this language as creating a uniform national market insulated from state interference.³³ By embedding new THC restrictions into the federal spending bill, Congress changed this baseline and exercised its full Commerce Clause authority over the national hemp-derived cannabinoid market. When Congress regulates interstate commerce, federal law supersedes conflicting state rules.³⁴ Hemp-derived intoxicants clearly move through national distribution channels, giving Congress a constitutionally sound basis for these limits.³⁵

The new law also reshapes dormant Commerce Clause analysis. The dormant Commerce Clause acts to “prohibit state laws that unduly restrict interstate commerce even in the absence of congressional legislation.”³⁶ State bans on Delta-8 THC and similar products risked violating the dormant Commerce Clause because they burdened the federally protected interstate market.³⁷ Once Congress affirmatively regulates, however, congressional intent—not dormant Commerce Clause doctrine—controls.³⁸ Delta-8 is lawful so long as it was not “synthetically derived.”³⁹ By directly regulating THC content in transported products, Congress replaced a patchwork of state rules with a federally controlled interstate standard.

B. Preemption Issues

Congress’s proposed redefinition of hemp and its new THC limits create immediate preemption questions—issues concerning whether federal law supersedes conflicting state regulations—for states that currently regulate intoxicating cannabinoids. Under the Supremacy Clause, federal law preempts state law when “Congress expressly states its intent, when federal regulation occupies a field, or when state law conflicts with federal purposes.”⁴⁰ Congress did not include an express preemption clause in the Farm Bill, and courts have repeatedly interpreted the statute as preserving substantial state authority over hemp products.⁴¹ The Seventh Circuit Court of Appeals in C.Y. Wholesale, Inc. v. Holcomb held that the Farm Bill did not bar Indiana from prohibiting smokable hemp, concluding that Congress chose not to “occupy the field of hemp regulation” and left states broad police-power authority to restrict hemp products within their borders.⁴²

The proposed federal redefinition of hemp and its prohibition on cannabinoids converted outside the plant could reverse this framework by creating direct conflicts with permissive state laws. Several states continue allowing Delta-8, THCA, and other intoxicating hemp derivatives under state-level licensing schemes.⁴³ These state laws would likely be preempted under standard conflict-preemption principles if the federal definition criminalizes or bans products that states authorize. The Congressional Research Service has already warned that broad federal restrictions would “supersede inconsistent state laws” and immediately invalidate state-level markets for many hemp-derived cannabinoids.⁴⁴

At the same time, states with strict bans on intoxicating hemp products may face preemption challenges, as they could argue that a uniform federal definition that expressly legalizes certain hemp materials limits their ability to impose broader prohibitions. This argument mirrors early litigation following the Farm Bill, where it was alleged that state laws restricting hemp transport or sales violated federal protections for interstate hemp commerce.⁴⁵ Congress’s proposed changes create a rare two-sided preemption risk: permissive states may lose authority because the new federal definition bans products they regulate, while restrictive states may lose authority if Congress’s new definition codifies a national uniform standard. Either outcome is likely to generate litigation from states, manufacturers, and trade associations seeking clarity on the scope of federal power in the post-Farm-Bill era.

C. Health Implications

The spending bill’s legislation on hemp-derived intoxicating cannabinoids could have serious public health consequences. Many of these compounds remain untested for long-term safety, yet they are widely used and often misbranded.⁴⁶ The FDA has issued warning letters to companies selling delta-8 products, citing adverse hospitalizations and poison-control exposure reports; it also notes that these products have not been evaluated for safety, purity, or dosage.⁴⁷ Lab tests have found that most commercially available hemp-derived intoxicating products (e.g., gummies, vapes) contain synthetically produced cannabinoids far more potent than natural Delta-‑9 THC, increasing unpredictability of psychoactive effects.⁴⁸

Public health agencies also warn that labeling inconsistencies could compound the danger. The Missouri Department of Health has issued a health advisory, stating that these intoxicating hemp-derived cannabinoids are “untested in humans, unregulated, and sold … without restriction,” and that adverse reactions have increased.⁴⁹ Similarly, the United States Centers for Disease Control and Prevention underscores that some Delta-8 products list only Delta-9 THC content, thereby “underestimating” a product’s psychoactive potential. Beyond safety risks, there is also a growing concern about the mental health effects of these compounds. Cureus, a medical science journal, published that patients with preexisting psychiatric disorders documented that Delta‑-8 THC use precipitated psychotic symptoms in multiple individuals, challenging the common misperception that Delta-8 is a “safer” alternative to Delta-9 THC.⁵⁰ The prevalence of psychiatric risk is especially worrying given the popularity of these compounds among vulnerable populations.⁵¹

While regulation may help vulnerable populations, users who lose access through legal markets might also turn to illicit alternatives, which lack quality controls and may contain unknown contaminants.⁵² Because many consumers use these products to self-manage stress, sleep disturbances, or anxiety, restricting access without offering safe alternatives may have negative downstream effects on mental well‑being.⁵³ The lack of regulation also raises equity concerns: many Delta-8 users are in states without legal cannabis markets, and data shows that poison-control incidents involving Delta-8 are significantly more common in those states.⁵⁴ Congress’s crackdown, while perhaps aimed at reducing harm, risks reducing oversight over an increasingly black-market supply of psychoactive hemp derivatives which could heighten, rather than mitigate, public health and mental health risks.

IV. Conclusion

The spending bill’s redefinition of hemp and strict THC limits overreach Congress’s authority and undermine existing regulatory frameworks. By expanding hemp to include total THC and banning chemically converted cannabinoids, Congress disrupts state-authorized hemp markets and creates unnecessary conflicts between federal and state law. These changes threaten lawful commerce, increase legal uncertainty, and open the door to costly litigation for producers, retailers, and consumers.

The bill also jeopardizes individuals’ public health. Congress fails to recognize that some consumers rely on these compounds to manage anxiety, stress, or sleep disturbances, and banning them eliminates legal options for mental health support. Many veterans rely on these hemp-derived cannabinoids to help manage post-military symptoms, turning to these products when traditional treatments prove ineffective or inaccessible.⁵⁵ Consumers may instead turn to illicit or unregulated markets, increasing exposure to contaminated or misbranded products. Evidence from the FDA and state health agencies demonstrates that proper regulation, not outright prohibition, better protects public health and safety.⁵⁶ Congress prioritizes prohibition over sound judgment with this legislation, harming the hemp industry and consumers while failing to mitigate health risks. Lawmakers should preserve state flexibility, protect lawful markets, and implement evidence-based safeguards rather than impose sweeping bans that endanger economic and public health interests.

Cover Photo by Jeff. W. on Unsplash

Joshua Smith

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8
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9
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14
Id.
15
AK Futures LLC v. Boyd Street Distro, LLC, 35 F.4th 682 (9th Cir. 2022)
16
AK Futures LLC v. Boyd St. Distro, LLC, 35 F.4th 682, 690 (9th Cir. 2022).
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18
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20
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24
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Congressional Research Service, Changes to the Federal Definition of Hemp: Legal Considerations Under the Controlled Substances Act, at 3 (updated Nov. 12, 2025), https://www.congress.gov/crs_external_products/LSB/PDF/LSB11381/LSB11381.1.pdf [https://perma.cc/X6XT-6W7K].
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30
U.S. Const. art. I, § 8, cl. 3.
31
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32
Agricultural Improvement Act of 2018, Pub. L. No. 115-334, § 10114(b), 132 Stat. 4490, 4908.
33
See C.Y. Wholesale, Inc. v. Holcomb, 84 F.4th 1165, 1174–75 (7th Cir. 2023).
34
Gibbons v. Ogden, 22 U.S. 1, 81 (1824).
35
See Gonzales v. Raich, 545 U.S. 1, 22 (2005).
36
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37
See N.E. Patients Group v. United Cannabis Patients and Caregivers of Maine, 45 F.4th 542, 548–50 (1st Cir. 2022).
38
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39
Implementation of the Agriculture Improvement Act of 2018, 85 Fed. Reg. 51,639, 51,641 (Aug. 21, 2020) (to be codified at 21 C.F.R. pts. 308, 312).
40
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41
Tony Lange, 10th Circuit Court Rules 2018 Farm Bill Does Not Preempt Wyoming Hemp THC Laws, Cannabis Bus. Times (Oct. 28, 2025), https://www.cannabisbusinesstimes.com/us-states/wyoming/news/15770475/10th-circuit-court-rules-2018-farm-bill-does-not-preempt-wyoming-hemp-thc-laws[https://perma.cc/3ZY4-U49R].
42
See C.Y. Wholesale, Inc. v. Holcomb, 84 F.4th 1165, 1174–75 (7th Cir. 2023).
43
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44
See Kafka, Cong. Rsch. Serv. R48637, supra note 35 at 9.
45
See Agricultural Improvement Act of 2018, Pub. L. No. 115-334, § 10114(b), 132 Stat. 4490, 4908 (2018) (prohibiting states from interfering with interstate shipment of lawful hemp).
46
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47
Id.
48
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49
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50
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51
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52
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53
Susan A. Stoner, U. of Wash., Alcohol & Drug Inst., Effects of Marijuana on Mental Health: Anxiety Disorders 5 (June 2017), https://adai.uw.edu/pubs/pdf/2017mjanxiety.pdf [https://perma.cc/XSY6-JS36].
54
Analysis, supra note 44.
55
Carisa Voightman et al., Cannabidiol (CBD) and Hemp Oil Use in Veterans Using a VA Pain Clinic: A Cross‑Sectional Survey Study, 43 J. Addict. Dis. 190 (2025), https://doi.org/10.1080/10550887.2024.2355365 [https://perma.cc/T3XY-WYPE].
56
U.S. Food & Drug Admin., What You Need to Know (And What We’re Working to Find Out) About Products Containing Cannabis or Cannabis‑Derived Compounds, Including CBD (Mar. 5, 2020), https://www.fda.gov/consumers/consumer‑updates/what‑you‑need‑to‑know‑and‑what‑were‑working‑find‑out‑about‑products‑containing‑cannabis‑or‑cannabis [https://perma.cc/8KZC-3UKA].