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Ambiguities in federal hemp laws and regulations have fueled a surge in state-level prosecution and enforcement actions against businesses marketing and selling hemp-derived products, amid growing concerns over psychoactive hemp derivatives.

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New federal initiatives aim to redefine hemp and ban synthetic and psychoactive cannabinoids, while states move aggressively to implement robust controls on hemp-derived THC.

The Farm Bill, Its Loophole and Recent Changes

In 2018, Congress passed the “Farm Bill” amending the Controlled Substances Act to remove hemp and hemp seeds from the federal definition of marijuana, a Schedule I controlled substance. Under the bill, hemp and hemp-derived products containing no more than 0.3 percent delta-9 tetrahydrocannabinol (THC) by dry weight were legalized and removed from Drug Enforcement Administration registration requirements, enabling their cultivation, processing and sale.

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However, the Farm Bill did not address other cannabinoids derived from hemp, such as delta-8, delta-10 and THCA. That gap opened the door for these compounds, whether natural or synthetic, to enter the market with uncertain regulatory oversight.<a href="#_edn2" id="_ednref2">[2]</a> This sparked a boom in hemp-derived cannabinoid products that complied with federal THC limits yet contained psychoactive components. Many of these products became widely available through retail and online channels.

This gap in the Farm Bill prompted states to adopt diverse strategies to regulate hemp-derived products, with some states imposing outright bans and others establishing state-level regulatory frameworks. Recently, some states have responded more aggressively, even where no explicit state-level ban exists.

Hemp Industry in the Crosshairs: Enforcement Efforts and Congressional Redefinition Ahead

In Pennsylvania, which has adopted the Farm Bill’s definition of hemp, authorities have launched sweeping enforcement actions on retailers and distributors of hemp-derived products. In an aggressive push to eliminate hemp-derived products from the market, law enforcement has intensified efforts through undercover investigations, surprise raids, sweeping property seizures, and grand jury investigations targeting both business and personal assets. Similar proceedings are underway in Kansas<a href="#_edn3" id="_ednref3">[3]</a> and Missouri.<a href="#_edn4" id="_ednref4">[4]</a>

In October 2025, 39 state Attorneys General signed a letter formally requesting that Congress clarify hemp’s legal definition and take immediate legislative action against unregulated and synthetic THC products. The letter claims that these THC products pose public health risks.<a href="#_edn5" id="_ednref5">[5]</a>

In November 2025, Congress responded to these concerns by amending the definition of “hemp” to exclude products containing more than 0.4 milligrams of total THC – rather than just delta-9 THC – and to ban synthetic cannabinoids. Under the new definition, the “total THC” count would also cover compounds “that have similar effects (or are marketed to have similar effects).” The new definition, which will take effect in November 2026, will dramatically reshape the market by making most hemp-derived THC products illegal and pulling popular items off shelves, leaving consumers with fewer options.<a href="#_edn6" id="_ednref6">[6]</a>

What This Means for Businesses

Though this new definition of hemp is not yet in effect, the legal landscape remains in flux. Businesses that manufacture, distribute and/or sell hemp products cannot rely solely on federal compliance to shield them from thorny legal complications. States may still choose to exercise enforcement, even in the absence of state-level legislation or regulations. Key among the potential enforcement mechanisms are the threats of asset seizure, business closures and/or bankruptcy, criminal charges, and civil litigation, including litigation aimed at obtaining or unfreezing assets seized by the government.

For companies involved in the growing, manufacture and distribution of hemp-based products, now is the time to conduct internal compliance audits to assess state-level THC standards, product testing methods, and labeling requirements. Businesses should consider proactively monitoring pending legislation and enforcement initiatives, and engaging in preemptive planning that includes developing response protocols for possible enforcement inquiries, raids or seizures.

Companies may also want to consider coordinating with outside counsel ready to advise on, and protect against, government overreach. Our White Collar, Investigations and Securities Enforcement and Litigation team comprises seasoned attorneys and former Department of Justice officials, including former unit chiefs, former U.S. Attorneys and lawyers with extensive experience in regulatory investigations, complex litigation and enterprise compliance counseling.

Please feel free to contact any of our experienced professionals if you have questions about this alert, responding to an enforcement request, or ensuring methods, standards and labeling requirements are compliant with current regulations.

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Meghan A. Norcross also contributed to this client alert.

<a id="_edn2" href="#_ednref2">[2]</a> Congressional Research Service, Change to Federal Definition of Hemp and Implications for Federal Enforcement (December 3, 2025), <a href="https://www.congress.gov/crs-product/IN12620" target="_blank" rel="noreferrer noopener">https://www.congress.gov/crs-product/IN12620</a>.

<a id="_edn3" href="#_ednref3">[3]</a> Kansas Reflector, Kansas hemp business owner requests court intervention following raid, seizure (December 17, 2025), <a href="https://kansasreflector.com/briefs/kansas-hemp-business-owner-requests-court-intervention-following-raid-seizures/" target="_blank" rel="noreferrer noopener">https://kansasreflector.com/briefs/kansas-hemp-business-owner-requests-court-intervention-following-raid-seizures/</a>.

<a id="_edn4" href="#_ednref4">[4]</a> Office of the Missouri Attorney General, Attorney General Hanaway Launches Statewide Investigation Into Sellers of Unregulated Hemp Products, <a href="https://ago.mo.gov/attorney-general-hanaway-launches-statewide-investigation-into-sellers-of-unregulated-hemp-products/" target="_blank" rel="noreferrer noopener">https://ago.mo.gov/attorney-general-hanaway-launches-statewide-investigation-into-sellers-of-unregulated-hemp-products/</a>.

<a id="_edn5" href="#_ednref5">[5]</a> National Association of Attorneys General, 39 State and Territory Attorneys General Call for Clarification of Federal “Hemp” Definition (October 24, 2025), <a href="https://www.naag.org/press-releases/bipartisan-coalition-of-39-state-and-territory-attorneys-general-urges-clarify-federal-definition-of-hemp" target="_blank" rel="noreferrer noopener">https://www.naag.org/press-releases/bipartisan-coalition-of-39-state-and-territory-attorneys-general-urges-clarify-federal-definition-of-hemp</a>/.

<a id="_edn6" href="#_ednref6">[6]</a> Sam Reisman, Trump Orders Loosening of Federal Restrictions on Marijuana, Law360 (December 18, 2025), <a href="https://www.law360.com/criminalpractice/articles/2421297?nl_pk=805a3a71-073d-4a63-979c-fb652f841e7f&amp;utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=criminalpractice&amp;utm_content=2421297&amp;read_main=1&amp;nlsidx=0&amp;nlaidx=0." target="_blank" rel="noreferrer noopener">https://www.law360.com/criminalpractice/articles/2421297?nl_pk=805a3a71-073d-4a63-979c-fb652f841e7f&amp;utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=criminalpractice&amp;utm_content=2421297&amp;read_main=1&amp;nlsidx=0&amp;nlaidx=0.</a>

Hemp Industry Under Intensifying Legal Scrutiny

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