Ever since the passage of the 2018 Farm Bill federally removed hemp from the list of controlled substances and legalized the production, sale and interstate transport of hemp flower and hemp-derived products, this booming agricultural and production business has grown into a nearly $30 billion nationwide industry.
But after November of this year, much of that may be no more.
McGowan Wholesale Cannabis provides commercial insurance and risk management for the industry. According to a March 16 blog post, in November of 2025, Congress passed a bill that both ended the longest government shutdown in history and included a provision that threatens more than 300,000 jobs nationwide.
The provision effectively closes the “intoxicating hemp loophole” that businesses have used to explore and produce products with cannabinoids beyond marijuana, or Delta-9 THC, such as hemp-derived Delta-8 THC, THCA and CBD. From growers to retailers, the entire supply chain is scrambling to understand the consequences and develop strategies to stay in business.
The federal government currently considers a product with more than 0.3% Delta-9 THC per serving to be marijuana. But after the intoxicating hemp ban takes effect, the new definition will also include any product with 0.4% THC per container. Additionally, the FDA will create a list of intoxicating cannabinoids, such as Delta-8, that will no longer be legal to sell federally.
“This limit also includes intermediaries used to produce products like CBD gummies,” the McGowan post reads. “As a result, many CBD products that are currently legal may become illegal to manufacture once the new law takes effect. Some cannabis industry executives predict that this limit will include 95% of hemp products currently on the market.”
Two bills have reportedly been introduced in Congress that would take the sting out of the hemp ban.
“The Hemp Planting Predictability Act is a bipartisan effort in both the Senate and the House of Representatives that aims to delay the forthcoming federal prohibition on intoxicating hemp products,” the post reports. “The core goal of this bill is to postpone the ban’s effective date by two years, from November 13, 2026, until November 2028, giving farmers and the $28 billion industry more time to prepare for the regulatory changes.”
The Cannabinoid Safety and Regulation Act, “seeks to establish a comprehensive federal regulatory framework for hemp-derived cannabinoids. Instead of prohibition, the CSRA proposes measures to keep products legal while ensuring consumer safety, including setting an age limit of 21, implementing strict testing and labeling requirements, and establishing higher THC (and intoxicating compound) limits, such as 5mg per serving, for regulated products.”
Our state
According to a July 7 piece by Jeffrey Billman in The Assembly, which has comprehensively covered North Carolina news since its creation in 2021, “With time running out on the General Assembly’s legislative session, North Carolina’s $3.2 billion hemp industry was hanging on by a thread.”
The article went on to say that “industry leaders professed confidence that federal lawmakers would change their minds before the law takes effect on November 12, but their Plan B was Raleigh. State regulations, they believed, could mitigate the damage.
“But legislation to do that had gone nowhere this year,” Billman wrote. “And just before the July 4 weekend, their situation went from precarious to existential. On Thursday morning, a last-minute bill surfaced that, rather than giving the hemp industry a path forward, would codify the federal ban in state law — likely shutting down thousands of retailers and manufacturers.
“State Sen. Bill Rabon pitched that as a feature, not a bug.
“Are we going to affect businesses? Yes, we’re going to affect 12,000 drug dealers’ businesses,” Rabon said on the Senate floor on Thursday. “They’re selling it to low-income, to people who are down on their luck, the normal people who buy drugs. But they’re also selling it to teenagers and sub-teenagers, and anyone that they can prey upon.
“Rabon’s office did not respond to an email asking for the source of his figure,” The Assembly article continued. “A study found that there were 2,197 hemp retailers in North Carolina in 2025, though that number does not include convenience stores. An industry source said there are at most 6,000 stores that sell hemp products....
Billman went on to write that banning hemp won’t eradicate demand. “North Carolina is one of only seven states that completely prohibit recreational and medical cannabis. Not coincidentally, it also ranks among the country’s largest markets for illicit marijuana and intoxicating hemp.”
Gov. Josh Stein told The Assembly that hemp’s proliferation has come with real problems. “Consumers have no way to know that products are safe, and some vape shops have opened next to schools and targeted adolescents. That offends me,” Stein said.
“But in his view, it’s not an argument for complete prohibition. Rather, he wants a regulated market that gives the state control over what’s being sold and who’s selling it — and not just hemp.
“Stein is the first North Carolina governor to call for legalizing recreational marijuana, though his preferred term is “adult-use cannabis.”
“We need to have a well-regulated market that puts public safety and public health at its center,” he said. “It protects kids, and it is available for adult use —because adults are using it, and we can’t put our heads in the sand any longer.”
The Dispatch reports
In response to an email from the Dispatch, Rep. Bryan Cohn, D-32, wrote the following: “I absolutely agree that North Carolina needs strong regulation for intoxicating THC and other hemp derivatives. We should absolutely require customers to be 21, establish testing and labeling standards, limit dosages, protect children, and give law enforcement clear authority to act against businesses that break the rules.”
But he went on to write that he does not support “wiping out an entire legal industry without giving responsible businesses a workable path forward. Many of these are legitimate small businesses that employ North Carolinians and pay taxes,” he wrote.
“None of this legislation would automatically close every tobacco shop, but businesses that rely heavily on these products could be forced to close. We should regulate this market, protect customers, and shut down bad actors without treating every business owner as a criminal. Not everything has to be a culture war crusade; our jobs are not that difficult, just develop responsible public policy that benefits the people.”
The hypocrisy is hard to ignore, Cohn said.
“The same senator who tried to bring the commercial casino industry to North Carolina is all of a sudden concerned about protecting low-income neighborhoods. The federal changes scheduled for November already threaten many hemp-dependent businesses. HB328 could add a state prohibition on top of that. When is the last time a prohibition has actually been effective?
“Calling every retailer a drug dealer is just a sound bite. What my colleagues in the Senate should be doing is coming up with responsible public policy instead of gleefully celebrating the prospect of shutting down small businesses across North Carolina.”
Local smoke shop business
Ali Alashmali, 20, owns two smoke shops in Henderson — Puff City Tobacco on Dabney Drive in the space formerly occupied by Enterprise Rent-a-Car that he opened last August; and Cloud Pass Tobacco Shop on Andrews Avenue, where El Patacon was in business for a bit, which opened in June.
The former San Francisco resident who came to Carolina in 2014 said he wasn’t aware of the looming legislation that might affect his business. Related to other local proprietors of Yemeni origin who own another nearby smoke shop, along with furniture and convenience stores, Alashmali said if he has to close then that’s just business.
“You win some and lose