The $38 Billion Hemp Industry Has One Month To Live

0:00Jim Higdon: Today on Forbes, the$38 billion hemp industry has one month to live. Jim Higdon is planning for the best Black Friday of his life. It may also be the last. Inside Cornbread Hemp's 25 ,000-square-foot gummy factory in Louisville, Kentucky, the lines are running full and the warehouse is filling up for the biggest sales day of the year. Two weeks after that, on December 11th, a federal ban on hemp-derived THC takes effect. If it holds, Cornbread's record$65 million in revenue this year ends. And so does most of the$38.5 billion industry around it, a market that now outsells legal marijuana. Higdon has 106 employees, a personally guaranteed loan on the facility expansion, and a month to make as much money as possible.

0:58Jim Higdon: He also has a second job. Higdon is chairman of the U.S. Hemp Roundtable. That's an industry group that has spent the better part of a year lobbying Congress to replace the ban with regulation. And Higdon does not intend to spend the month waiting. He says, quote, Plan one is to not go extinct and to beat this shit. The way to prepare for a potential extinction event is to prevent that extinction event from happening. The hemp ban will roll out in two stages. On November 12th, synthetic cannabinoids go first, including Delta-8 THC, the milder sibling of Delta-9 THC. On December 11th, all hemp-derived cannabinoid products will be capped at 0.4 mg per container total.

1:47Jim Higdon: 5 mg of THC is the typical dose. At the 0.4 milligram level, the rule is less a regulation than a shutoff valve. It's also likely to be a death knell for the current hemp industry. For the last year, Higdon, the U.S. Hemp Roundtable, and a slew of other organizations and entrepreneurs have been trying to convince lawmakers to pass a bill to regulate hemp products like any other adult product. no sales to anyone under 21 years old, mandatory lab testing, dosage limits, and packaging rules. Since the passage of the Farm Bill in 2018, which President Donald Trump signed during his first term, hemp-derived products have been federally legal.

2:33The law legalized hemp and all of its derivatives, isomers, and extracts. And since hemp and marijuana are different varietals of the same plant, Cannabis Sativa L, they contain the same compounds. And hemp can be used to make products of similar potencies, or even stronger, than those found in state-regulated marijuana dispensaries across 41 states. With the Farm Bill as cover, an entire industry unfettered by laws banning marijuana has been selling these products online, across state lines, at gas stations, convenience stores, and other places where marijuana is still outlawed. THC-infused beverages, which generate about$1 billion in annual sales across the U.S., have surged in popularity.

3:19Even big-box retailers like Total Wine, Circle K, and Target stock them. According to Whitney Economics, the intoxicating hemp products industry has grown from$28 billion in sales in 2024 to$38.5 billion in sales last year. Compare that against about$30 billion for state legal marijuana sales. But all that could end next month.

3:45Jim Higdon: No bills regulating hemp have passed yet, and it's not clear that any will before the ban goes into effect. But a few are in play, including the Lawful Hemp Protection Act by Representative Angie Craig, Democrat of Minnesota, and Representative Andy Barr, Republican of Kentucky. Barr just won his Senate race to replace Senator Mitch McConnell, who was responsible for the hemp ban being added to the last federal spending bill passed last November, and ironically the author of the hemp language in the 2018 Farm Bill. The Barr-Craig bill, if passed, would change the definition of hemp, again, and add new taxes and other regulations.

4:26Other bills will do roughly the same. President Donald Trump has vocally called for Congress to reverse the ban. To add another layer, his recently fired chief of staff, Susie Wiles' daughter, is married to Brett Worley, the founder of hemp-derived cannabinoid producer, MC Nutraceuticals. The one break the calendar offers is that on December 11th is also the day federal funding expires, and Congress has to pass a spending bill to avoid another government shutdown. Last year's shutdown ran 43 days, the longest in American history.

5:01Jim Higdon: And hemp was thrust into national headlines as Kentucky's McConnell and Rand Paul fought over it. McConnell won. His amendment banning intoxicating hemp products was included. The industry's hope now is that the next spending bill carries a regulatory fix, or at minimum another delay. Asked what life after December 11th looks like if the ban does indeed go through, Higdon says he doesn't want to think about it. With no revenue, over 100 employees at Cornbread would lose their jobs right before Christmas, and Higdon and his partner would drown in debt. For full coverage, check out Will Yakowitz's piece on Forbes.com.

5:44This is Kieran Meadows from Forbes. Thanks for tuning in.

5:58Thank you.