Large Cannabis Companies Spending Millions to Shut Down Hemp 

COMMENTARY

The year thus far has been enlightening for lawmakers and hemp industry stakeholders. Just as the hemp industry started to recover after a rocky start, a fellow product category took aim — the cannabis industry. And coming out of the House Farm Bill markup, the agenda to shut down the hemp industry is on full display.

By way of background, the U.S. hemp program, young in years, has already endured massive blows.

Hemp has been legally imported into the United States for decades. However, domestic production was prohibited from the 1930s until 2014. Farmers were long in need of another commodity, and with the success of the 2014 pilot program and a growing demand for hemp and cannabidiol products, the hemp crop was fully commercialized in the 2018 Farm Bill. While this was good news for farmers, it did come with its own set of challenges given the market instability fueled by federal regulatory uncertainty of CBD. 

Meanwhile, cannabis remains a federally scheduled substance, yet has found pathways to market via state-enacted medical and/or adult-use programs in contravention of federal law. The move by states was largely due to the vast body of data that exposed the flaws in the decadeslong lack-of-medical-use argument held by the federal government and, just as significantly, consumers demanding access. California was the first state to enact a medical program in 1996. Colorado soon followed by enacting its own medical program in 2000 and an adult-use program in 2012. The 2012 program was the catalyst for the cannabis industry as it exists today.

As a result of the federal regulatory quagmire faced by both the hemp and cannabis industries, individual states began to adopt their own regulated markets. And for the most part, these industries coexisted without issue until the last year or so.

Spending by the cannabis lobby during the 2024 state legislative sessions alone leaves no room for doubt that the end game of large cannabis operators is to shrink — if not outright eliminate — the hemp consumer goods market. Large multistate operators have been dominating state regulated cannabis markets, methodically rolling up smaller operations. MSOs are now looking to shut down the hemp product category to secure an even greater market grab. 

The events unfolding in Florida showcase this brazen strategy. 

Florida is home to both hemp and medical cannabis programs. Florida’s hemp program was enacted in 2019. The state’s Department of Agriculture quickly and publicly welcomed consumer goods that could be manufactured from the crop, such as CBD and other cannabinoid products. Companies relocated to Florida and brands invested in the state market. As a result, the hemp-related economic footprint in Florida is now upwards of $10 billion and supports the employment of approximately 104,000 Florida workers, according to data from Whitney Economics.

Florida launched a medical cannabis program in 2014 that was expanded a few years later. Efforts to enact an adult-use recreational market failed — until now. 

Trulieve, a well-known MSO, was a key funder of the Smart and Safe Florida campaign, an initiative to allow adult-use in the state. Trulieve spent more than $40 million to secure the adult-use initiative on the November 2024 ballot. Even the Florida attorney general recognized the ballot initiative as a means to have a “monopolistic stranglehold” on Florida’s cannabis market. Simultaneously, Trulieve supported recently passed legislation that bans most hemp products. To further expose the long-term agenda, once the adult-use measure cleared the Florida court system, an additional $15 million flowed into the campaign from other large, well-known MSOs. 

Other states are contending with similar legislative proposals, fueled and orchestrated in part by large cannabis operators to curtail the hemp industry. Related efforts to inhibit the hemp industry are also being advanced on the federal level. The outcome of the recent House Farm Bill markup included an amendment that decimates the hemp industry and genetics that have been developed since the 2018 Farm Bill. The political play to advance the amendment was clever — an en bloc amendment that buffered the controversial hemp amendment by packaging it with agreeable amendments. Now the hemp industry has full awareness of friends, foes and allies. 

Conventional market grabs remain alive and well, and, fortunately, so does the resilience of hemp stakeholders. The U.S. hemp program delivers a domestic supply chain for consumer goods and industrial applications. There is ample market share with a range of demographics, needs and product preferences.

As policy is being shaped, time will tell if lawmakers prioritize a dynamic marketplace for the long term or pave the way for a cannabis conglomerate.

Tami Wahl is a food and drug attorney with a government affairs firm in Washington, D.C. She brings over 20 years of legal experience and has worked as legislative, legal and regulatory counsel for entrepreneurs and small-to-medium-sized companies. Wahl works in health tech, the natural product industry, and hemp and cannabis industries. Her overarching goal is to ignite and secure market access for responsibly produced products and platforms. She strives to ensure that consumers and patients are spoiled for choice when it comes to individual health and self-care needs. She can be reached on her website.