Many states with legal cannabis have pushed back against the hemp THC industry. Governor Gavin Newsom enacted an emergency ban in September, while Ohio and New Jersey have taken their own actions. The market has grown widely with little to no regulation, with products available at gas stations and taking sales from the regulated cannabis space.
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This developing loophole-legal industry has flourished since its inception. This is largely because brands can grow without paying exorbitant taxes and adhering to stringent regulations like licensed weed companies. The products exist thanks to the 2018 Farm Bill, which allows hemp testing at 0.3 percent THC by dry weight to be sold in the country.
Operators have taken advantage of this by chemically synthesizing intoxicating pot out of hemp that was originally compliant, among other methods. While many state governments have pushed back against these products, Illinois Governor J.B. Pritzker is vocally supporting their regulation and taxation instead.
Illinois may regulate and tax hemp THC space
Gov. Pritzker spoke out in support of House Bill 4293, which seeks to regulate and tax intoxicating hemp products, including delta-8, THCA, and similarly marketed pot.
Intoxicating hemp products are ripping off brands and marketing toward children.
Each day these products are on our shelves unregulated, we risk the health of another Illinoisan.
That’s why I’m calling for the Illinois House to take up HB 4293. pic.twitter.com/ZdbTBsMSng
— Governor JB Pritzker (@GovPritzker) December 14, 2024
The bill has stalled in the state House Rules Committee since June. As written, it would put the kibosh on the packaging and marketing that might attract children. It will also enforce testing and apply taxation. There are currently 13 sponsors, one joined this week.
This move is akin to one other state’s approach, as most seek to stop the sale of intoxicating hemp products rather than regulate them. Louisiana sent a similar law to Governor Jeff Landry’s desk in June. The bill doesn’t stop the sale of hemp THC or THCA. However, it does stop packages from containing over 40 milligrams (mg), prohibits sales in places like gas stations, and other rules similar to Illinois HB 4293.
The goal is to regulate the products in the interest of public health rather than ban the sale outright. Additionally, bringing the taxation and regulation of intoxicating hemp to the level of licensed operators creates even footing for these two spaces, which often find themselves at odds. Only time will tell which approach works, especially since Illinois lawmakers still have work before HB 4293 hits the governor’s desk.
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Hemp brands band together in other locales
A new Tennessee rule goes into effect next week, and hemp companies are up in arms. The state’s Department of Agriculture set the emergency change in September, effectively closing the Farm Bill loophole. These rules, which solidify December 26th, add that the combined amounts of delta-9 and THCA (not just THC) must remain below 0.3 percent.
Hemp brands in the southern state have filed a lawsuit in protest, citing millions in tax dollars brought in by the industry. The suit argues that the state has overstepped its authority with the ruling. This is not the first time the rule has been challenged. A similar suit was brought in September but was dismissed on procedural grounds.
The question of what to do about intoxicating hemp continues stumping lawmakers, law enforcement officers, and licensed cannabis companies. As some seek to ban the sale and manufacture of these products, Illinois is following Louisiana on its own road.
