What Payments Companies Need to Know About the New Federal Law on Intoxicating Hemp

A Thriving Intoxicating Hemp Industry

The popularity of intoxicating hemp products — including delta-8 THC, delta-10 THC, THC-O, HHC, and even high-potency delta-9 products marketed as “Farm Bill compliant” — was made possible by gaps in the 2018 Farm Bill, which focused on cultivation and failed to regulate finished goods. The bill also targeted delta-9 THC without considering the numerous other psychoactive cannabinoids that can be derived from the cannabis plant. 

The result has been a nationwide market of psychoactive products that are arguably not controlled substances and that have effectively no clear federal regulation. Many of these merchants accept credit card payments and operate like normal retail businesses despite their controversial nature. A new law, however, may change that in 2026.

What the New Federal Law Does

A new federal framework passed in November addresses some primary issues with the 2018 Farm Bill. 

Total THC Content Redefined
First, it’s going to remove the sole focus on delta-9 THC as the key indicator for what is hemp and what is not. Under the new law, the 0.3% threshold separating hemp from marijuana will apply to total THC content, including other cannabinoids such as delta-8 THC and delta-10 THC. Furthermore, it includes THCA, which is essentially a non-psychoactive substance that converts into delta-9 THC.

Only Naturally Produced Cannabinoids
Second, the bill states that any hemp-derived products can’t contain cannabinoids that can’t be naturally produced in a cannabis plant. Nor can they contain cannabinoids that can be naturally produced by a cannabis plant but are synthesized or manufactured outside of the plant. This effectively will eliminate most delta-8 THC and delta-10 THC products, which are chemically converted from CBD. Lastly, it limits the amount of THC in final hemp-derived products to 0.4 milligrams of THC per container.

“Container” Defined
Third, the bill defines a “container” as things like jars, bottles, bags, boxes, packets, cans, cartons, or cartridges that are in direct contact with the final hemp product. This will help to close a loophole that allows manufacturers to create delta-9 THC products that are compliant with the 2018 Farm Bill.

Finally, the bill prohibits viable seeds from a plant that contains more than 0.3% total THC, which wasn’t previously the case. 

The law takes effect approximately one year from passage, with additional FDA guidance expected within 90 days. 

How Are CBD and Industrial Hemp Impacted?

CBD and non-intoxicating cannabinoids (such as CBN and CBG) generally remain unaffected from a legality standpoint. However, CBD continues to operate under existing FDA restrictions regarding foods and supplements. 

Industrial hemp products for fiber, food, and materials remain legal.

Implications for Payments Companies

Where ambiguity may have once provided cover, the clarity provided by this new law will present elevated risk for companies that support merchants offering intoxicating hemp products. 

Payments organizations should consider preparing now:

• Identify merchants in your portfolio offering intoxicating hemp products
• Determine how merchants will come into compliance
• Review and update policies as needed
• Expect enforcement if and when the law goes into effect

Recent Developments

Following LegitScript’s recent webinar, President Trump signed an executive order on marijuana and cannabidiol research. Along with ordering the DEA to complete the process to reschedule marijuana to Schedule III, the EO also orders his staff to push Congress to pass a bill to create a clear regulatory framework for hemp-derived CBD products.  

Learn More

Cannabis is just one of many rapidly changing, highly regulated industries. LegitScript helps payments companies and online platforms better understand and mitigate their risk as they explore growth opportunities. Contact us to learn more.