The Lawful Hemp Protection Act, introduced by Rep. Andy Barr (R-Ky.) and Rep. Angie Craig (D-Minn.) on July 22, would direct the US Food and Drug Administration (FDA) to establish standards for hemp-derived cannabinoid products while imposing new labeling, manufacturing and marketing requirements.
The legislation also would raise the legal definition of hemp from 0.3% to 1% total THC on a dry-weight basis, prohibit synthetic and artificially modified cannabinoids and establish separate regulatory pathways for industrial hemp and consumer hemp-derived cannabinoid products.
The legislation comes as hemp industry organizations push Congress to establish an alternative to pending federal restrictions they say would significantly disrupt the market if they take effect later this year.
Industry says certainty could encourage investment
Industry stakeholders said the proposal could provide a level of regulatory certainty that has been missing since hemp was federally legalized in 2018.
“If this bill passes, or another passes with a robust regulatory framework, most companies interested in the space will jump in eagerly, [as] regulatory certainty is what the industry has been demanding for years,” Jonathan Miller, general counsel of the US Hemp Roundtable, told NutraIngredients.
Miller said many nutrition and dietary supplement companies have remained on the sidelines because of regulatory uncertainty surrounding hemp-derived cannabinoids.
He further added that the legislation would develop a clearer pathway for hemp-derived cannabinoids, though the Roundtable plans to work with lawmakers to further refine the proposal and avoid unintended consequences.
In a press release, Congressman Barr said the legislation would establish “a commonsense regulatory framework” that allows the hemp industry to continue growing while protecting consumers and keeping products out of the hands of children.
Congresswoman Craig added that the bill would provide regulatory clarity for farmers, brewers, and small businesses while offering an alternative to federal policies she said threaten jobs and consumer choice in the same press statement.
FDA would establish product standards
Under the legislation, the Secretary of Health and Human Services, acting through FDA, would be responsible for establishing maximum cannabinoid content limits, labeling requirements, good manufacturing practices and other product standards for hemp-derived cannabinoid products.
“Not later than 12 months after the date of enactment of this section, the Secretary shall establish, with respect to any hemp-derived cannabinoid product… a maximum allowable amount of total cannabinoid content for such product and each serving of such product.”
As stated in the Lawful Hemp Protection Act
If FDA does not complete that rulemaking within one year, the legislation would establish default statutory cannabinoid limits.
The proposal also would require consumers to be at least 21 years old to purchase hemp-derived cannabinoid products, require consumable hemp products to be cultivated, processed and packaged in the United States, establish a federal excise tax structure and Treasury oversight framework for hemp-derived beverages, and preserve states’ authority to maintain stricter regulatory requirements than federal law.
The American Herbal Products Association (AHPA) welcomed the proposal.
“This legislation directly addresses issues faced by hemp farmers to give them workable federal regulations and access to a long-term growth market in hemp finished products,” Graham Rigby, AHPA president and CEO, told NI.
Rigby said AHPA looks forward to continuing to work with lawmakers to develop a framework that supports farmers, protects consumers and ensures a stable marketplace for hemp-derived products.
Miller said the legislation would create a clearer pathway for hemp-derived cannabinoids, although the US Hemp Roundtable plans to work with lawmakers to amend the bill so serving limits are established directly in statute rather than through FDA rulemaking. He noted that the legislation includes a fallback 5 mg THC serving limit if FDA does not act within one year.
Miller also said the Roundtable supports protecting naturally hemp-derived cannabinoids, including CBD, delta-9 THC, CBG and CBN, while opposing cannabinoids manufactured entirely outside of the hemp plant.
If Congress does not enact either the Lawful Hemp Protection Act or another legislative solution before pending federal restrictions take effect, Miller said the consequences for the hemp industry would be severe.
“It would be simply devastating and hard to recover from, but we are cautiously optimistic that we will find a solution or at least an extension of the moratorium before November,” he shared.
Dietary supplement provision draws criticism
Not all stakeholders agreed with every provision of the legislation.
Daniel Fabricant, PhD, president and CEO of the Natural Products Association, criticized the bill’s fallback provision allowing dietary supplements to contain up to 5 mg THC per serving if FDA does not establish cannabinoid limits within one year.
“5 mg of THC is not a health and wellness product; it’s a product to get high and should be only for recreational or adult use,” Dr. Fabricant told NI.
Dr. Fabricant said THC should be considered an adulterant in dietary supplements and argued that products marketed as dietary supplements should contain only de minimis amounts of compounds that would adulterate the category.
Companies should prepare for compliance changes
While several organizations supported the legislation, legal experts cautioned that companies should expect new compliance obligations if the bill becomes law.
“The Lawful Hemp Protection Act is a meaningful step forward, but it’s not a free pass for the industry,” Rend Al-Mondhiry, partner and co-chair of the regulatory group at Amin Wasserman Gurnani LLP, told NI.
Al-Mondhiry said companies would need to comply with new age restrictions, labeling requirements, revised THC measurement standards, restrictions on certain synthetically derived cannabinoids and a new federal tax structure. She said some products currently on the market could require reformulation or repositioning to comply with the legislation.
The bill also would impose a 5-cent-per-milligram excise tax on hemp-derived beverages, a 5% tax on other hemp-derived cannabinoid products and a separate 5% tax on manufacturers’ gross sales revenue. Depending on how those provisions interact, companies could face layered federal tax obligations in addition to existing state excise taxes, licensing fees and compliance costs, Al-Mondhiry said.
She also noted that manufacturers would still need to monitor state requirements because the legislation allows states to maintain regulatory frameworks that are stricter than federal law.
“That said, a regulated pathway with clear rules is a better outcome for the industry than the alternative on the table: a blanket prohibition that would nearly eliminate most products [on] the market,” she said.
