In October, Congress and the President were unable to agree on several funding bills, which resulted in a “lapse in federal appropriations,” known to most of us as a “government shutdown.” The shutdown lasted a record-breaking 43 days, until November 12, 2025, when President Trump signed into law H.R.5371 - Continuing Appropriations, Agriculture, Legislative Branch, Military Construction and Veterans Affairs, and Extensions Act, 2026. This legislation funds the government through the end of January.
To some folks’ surprise, H.R. 5371 contained a provision, championed by Senator Mitch McConnell (R-KY) and Representative Andy Harris (R-MD-01) that would effectively ban most hemp-derived THC products that are currently available across the country. Addressing hemp in agricultural spending bills is not a new idea. This provision, Section 781 in the bill, had been included in prior United States Department of Agriculture spending bills, but had been stripped out of those bills before enactment. This time however, the hemp-ban language survived and was signed into law by the President.
During the bill’s consideration, alarm bells rang across D.C. about the effects of Section 781. Thirty-six Attorneys General wrote a letter to the House and Senate Appropriations Committees asking them to address “intoxicating hemp-derived THC products” that “have inundated communities throughout our states due to a grievously mistaken interpretation of the 2018 Farm Bill’s definition of “hemp” that companies are leveraging to pursue profits at the expense of public safety and health.”
Senator Rand Paul (R-KY) had been very vocal in his opposition to a hemp ban and said that Section 781 would decimate Kentucky hemp farmers. On Tuesday, Paul introduced an amendment to the legislation, which would have stripped Section 781. That amendment failed by a vote of 76-24 in the full Senate. Notably, only two Republicans, Paul and Senator Ted Cruz (R-TX) voted to strip the McConnell language and over 20 Democrats voted to keep Section 781 in the bill. Additionally, the White House commented that President Trump supported the hemp ban language.
After H.R. 5371 survived Senate Consideration, the House of Representatives made quick work of passing the legislation by a vote of 222-209, and President Trump signed the bill late Wednesday night.
What Is Section 781 and What Does it Do?
Section 781 is a major shift in how hemp is treated under federal law since hemp was addressed in the 2018 Farm Bill.
Section 781 does not take effect until 365 days after HR 5371 was enacted (November 12, 2026).
Once the ban takes effect, it would effectively prohibit the sale and/or distribution of all hemp products exceeding 0.4mg of total THC per container.
Section 781 does not differentiate among product types—gummies, combustibles, and beverages, are all subject to the same rules.
The Federal Drug Administration has 90 days (February 10, 2026) to provide a listing of cannabinoids naturally occurring or naturally produced in Cannabis Sativa L, other cannabinoids, as well as guidance on what is a “container” for purposes of the legislation.
Under the new legislation, hemp is now redefined as only “the plant Cannabis sativa…and all derivatives, extracts, cannabinoids…with a total tetrahydrocannabinols concentration (including tetrahydrocannabinolic acid) of not more than 0.3 percent on a dry weight basis.”
The new definition introduces a total THC calculation that now accounts for the concentration of tetrahydrocannabinolic acid (THCA). The total THC concentration can be no more than 0.3 percent on a dry weight basis, which outlaws high-THC A hemp flowers, and many full-spectrum CBD products. The new definition outlaws merchants from selling noncompliant hemp and hemp products online and outside of state-regulated marijuana channels. It prohibits the production, sale, or distribution of any hemp-derived cannabinoid containing cannabinoids that are not naturally occurring in the cannabis plant (such as HHC), or containing cannabinoids that are synthesized or manufactured outside of the plant, such as THC-P.
Additionally, the bill limits the amount of total THC per container, regardless of serving size or form. Under the new law, final hemp-derived cannabinoid products have a limit of no more than 0.4 milligrams of total THC per container. This will impact products like THC-infused beverages and edibles. It is worth noting that this new federal limit is stricter than most states that have instituted state laws and rules dictating serving and package size limitations.
The new rules do not take effect for a year, but it is anticipated that federal agencies who currently touch any products subject to the ban will have to issue guidance before November 2026.
Why Does Section 781 Matter?
The United States Hemp Roundtable estimates the hemp industry in the United States accounts for $7 billion in economic impact and supports over 300,000 jobs. Section 781 puts the hemp industry at risk by leaving very few products on the table after the ban’s effective date next year.
Legislative and Advocacy Efforts
The United States Hemp Roundtable already stated that they’ll use the 365-day window to push legislation that would revise Section 781 to create a robust regulatory framework for hemp-derived THC products, as opposed to a ban. Senator Rand Paul (R-KY) in the Senate, and Congressman Morgan Griffith (R-VA-09) have both been champions for a regulatory framework, and it should be anticipated that both will put forward legislation to heavily revise Section 781.
The hemp ban also calls into question the larger issue of THC federal legalization and rescheduling efforts. Some have opined that THC would never be rescheduled or otherwise legalized federally until the hemp question was resolved. Now that there is some form of resolution with Section 781, does that open the door for rescheduling THC products? President Trump over the summer noted to reporters that his administration continues to look at rescheduling cannabis—is 2026 the year that actually happens?
Next Steps
Section 781 marks a major shift for hemp products. As a result, the next year will see a flurry in new activity both on the regulatory and government affairs front. We expect a major uptick in lobbying on the issue as companies will take an increased role in advocating for/against changes in this new law. Ice Miller attorneys and government affairs professionals are closely monitoring changes in the regulatory framework for hemp and any legislative efforts to change Section 781.
