Banning Hemp Products Isn’t The Way To Protect Public Health Or Foster Fairness For Marijuana Businesses (Op-Ed)

“State lawmakers should aim for sensible regulations focused on consumer protection and transparency in both industries.”

By Michelle Minton, Reason Foundation

From afar, the marijuana industry looks like it should be thriving.

According to Gallup, marijuana consumption has more than doubled since 2013. Recreational marijuana is now legal in 24 states, medical marijuana is legal in 40 states, legalization is on four state ballots this November, the Biden administration has taken the long overdue step of rescheduling cannabis, and both major party presidential candidates, Vice President Kamala Harris and former President Donald Trump, have signaled at least acceptance that legal marijuana is the future.

Yet, legal marijuana markets are faltering across the country, and there are numerous state-level efforts to ban hemp and CBD products.

Colorado and Massachusetts are seeing their legal marijuana dispensaries shutter, California’s cannabis industry seems on the verge of collapse, and in 2024, only about a quarter of U.S. marijuana businesses have reported turning a profit. The underlying problem is federal law and the complex web of state regulations that suffocate legal companies with high costs and inefficiencies. Sadly, many states appear poised to make the same regulatory mistakes with legalized hemp.

Marijuana and hemp, both derived from Cannabis sativa L., are chemically similar, but their regulatory paths couldn’t be more different. Marijuana has been federally prohibited since 1970. Hemp, on the other hand, was federally legalized in the 2018 Farm Bill, triggering an interstate market boom that states are now trying to stop or regulate.

Freed from federal prohibition, hemp has rapidly outpaced legal marijuana sales, rivaling even the craft beer industry in size. Hemp’s industrial uses—like textiles and building materials—are important, but it’s the cannabinoid-rich products created from hemp extract that are driving its market growth. As a result, concerned lawmakers across the country are imposing reactionary restrictions and outright bans because some of these hemp products have intoxicating effects similar to marijuana.

Cannabidiol (CBD), a non-psychoactive hemp derivative, is perhaps the most well-known hemp extract product. Widely recognized for its therapeutic benefits, CBD has become popular as a health product and an effective treatment for childhood seizure disorders. But the rise of intoxicating cannabinoids, like delta-8 THC, has triggered alarm among state lawmakers and legal marijuana businesses alike.

Delta-8 THC offers similar psychoactive effects to marijuana but, unlike marijuana, is not prohibited or controlled at the federal level. As a result, delta-8 products have flooded states, even those like Texas that have not legalized marijuana sales.

Consumers have far greater and easier access to hemp products, with products crossing state lines, available through online vendors and places like gas stations and convenience stores and sometimes even available for legal purchase by minors.

In contrast, legal marijuana sales remain tightly restricted to licensed dispensaries only in states where it is legal. Licensed marijuana businesses, overburdened by heavy regulation, are understandably frustrated by new competition from lightly regulated hemp products. Moreover, some concerns about youth access and the safety of novel hemp products are warranted. But the answer isn’t to burden hemp with equally stringent rules or outright prohibition.

Unfortunately, we’ve seen a wave of drastic measures proposed or adopted by states. Over 90 state bills were introduced to regulate hemp products this year. More recently, Missouri Gov. Mike Parson (R) ordered a state-wide ban on intoxicating hemp products. California Gov. Gavin Newsom (D) introduced emergency regulations prohibiting hemp products with detectable levels of THC. New Jersey followed suit, and Texas Lt. Gov. Dan Patrick (R) has urged the state’s legislature to prioritize banning delta-8 products next year.

While these policies are framed as consumer protection, they risk causing more harm than good, driving consumers toward illicit and truly unregulated products and cutting off access to therapeutic products because it is nearly impossible to extract non-intoxicating cannabinoids, like CBD, from hemp without trace levels of THC.

Instead, state lawmakers should aim for sensible regulations focused on consumer protection and transparency in both industries. Hemp cannabinoids and the products created with them are no more inherently dangerous than marijuana or marijuana products. The only difference is that while the manufacture and sales of marijuana products are held to overly stringent standards, hemp is often held to few, if any.

Rather than rushing to impose bans and restrictions on hemp that won’t help people or the economy, states should instead impose reasonable regulations on both hemp and marijuana to ensure the quality, safety and viability of both industries. As a recent Reason Foundation study detailed, states can do this by implementing manufacturing, testing, labeling standards and age restrictions for hemp while reducing unnecessarily restrictive and overly burdensome rules that stymie legal marijuana businesses.

The current piecemeal approach to regulation puts consumers at risk and hampers the ability of even willing actors to comply with a maze of state rules. Unlike legal marijuana’s unspooling mess, it’s far easier for lawmakers to get it right on hemp today. Unencumbered by federal prohibition of hemp, states can craft policies that balance consumer protection with market flexibility, coordinate with other states to standardize rules for a more coherent interstate market and foster fair and healthy competition between legal hemp and marijuana products.

The cannabis and hemp industries should be working with states to seize this chance to build a thriving, sensibly regulated hemp industry that works for consumers, businesses and regulators alike.

Michelle Minton is a senior policy analyst at Reason Foundation.

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Photo courtesy of Brendan Cleak.