Last month, I gave my big-picture thoughts on the intoxicating hemp products ban under P.L. 119-37, concluding that enforcement was an open question. That question has started to pick up steam, particularly following a Congressional Research Service report published on December 3rd.
The CRS report provides:
…it remains unclear if and how federal law enforcement will enforce the new prohibitions when the new definition goes into effect. In marijuana’s case, the federal response has largely been to allow states to implement their own marijuana laws despite the fact that state-regulated activities may violate the CSA. If intoxicating hemp products persist on the market after the change to their legal status, it is possible they could be subject to the same criminal and collateral issues as marijuana. It also remains to be seen whether FDA will pursue additional options to remove these items from the market. Both FDA and DEA may lack the resources to broadly enforce the laws prohibiting intoxicating hemp products on the market.
It concludes:
Congress may choose to exercise oversight over federal enforcement priorities regarding state-regulated cannabis activities. FDA (under the FDCA) and DEA (under the CSA), in coordination with the Department of Justice, have a range of civil and criminal remedies they may use in efforts to exercise control over these activities.
I’ve promoted CRS reports in the past, and this one is certainly timely. Enforcement considerations are paramount now, just as they were in the early days of state-legal marijuana programs.
P.L. 119-37 doesn’t take effect until November 12, 2026, but its effects are already being felt. I’ve spoken with service providers to the cannabis industry — most notably financial institution clients — who are reigning in their offerings to the hemp industry in response to the new law. This follows on actual federal government programs, such as the Small Business Administration, which already views many hemp businesses as non grata.
But there is a disconnect between the outlook of service providers, in some cases, and what many seed sellers and vendors of intoxicating hemp products are saying. Many operators display high confidence that P.L. 119-37 will somehow be reversed prior to taking effect; or that if it isn’t, it won’t be enforced. It’s a ballsy gambit– one step further than exploiting the 2018 Farm Bill’s suspect “loophole.”
It’s true that the feds have generally let state-legal cannabis actors alone; and it’s true that the feds never really enforced the 2018 Farm Bill. That’s been the case in respect of purported “loophole” products, and also with hemp-CBD food and beverages— which FDA has maintained violate the FDCA since day one.
P.L. 119-37 is different in a few respects, though. First, unlike state-legal marijuana, many intoxicating hemp products are sold in states that do not expressly allow their sale. Sellers are simply operating in a “vacuum” of sorts, citing a federal law loophole, without state law prohibitions. Second, as to marijuana plant seeds, DEA had opined that sales were legal, because those seeds had not yet expressed THC and were still statutory “hemp.” That’s no longer the case.
Let’s consider a scenario (which is the mostly likely scenario, in my opinion) that P.L. 119-37 remains on the books come November 12, 2026. The $20 billion question, as I mentioned last month, is whether there will be enforcement. I think it’s possible at the state level, and also at the federal level.
At the federal level, I wouldn’t expect a coordinated crackdown by DEA and U.S. attorneys. That would be too expensive, too unwieldy. Instead, I think targeted enforcement of select larger players — perhaps including warning letters next summer — is the most likely path. In that scenario, the chilling effect I mentioned for service providers would be magnified, and it’s likely that many operators would also stand down.
I also think states will continue to get on the prohibition bandwagon, as I explained to MJ BizDaily last month. Some already are, but you’d see more of this in an environment where the feds throw their backs into it, enforcement-wise, and where de jure prohibition is not the whole picture.
Next November seems far away, but nearly a month has come and gone since P.L. 119-37 passed. For the next 11 months, enforcement is going to be the biggest question of all. That will be true whether or not P.L. 119-37 stays on the books as written, or whether the put-upon industry claws back some of its “loophole.” If so, it will need to overcome resistance from various sources: the state-legal marijuana industry, prohibitionists at large, and legislators who either don’t understand the issues, or are offended by ideas like sales of “gas station weed” and sales to minors.
One thing is for certain: 2026 will be another interesting year for cannabis.
For more on this topic, check out the following posts:
