In mid-2025, a wave of bipartisan concern from over 30 state and territorial Attorneys General (AGs) swept through Capitol Hill as the coalition urged Congress to address what they call the "hemp intoxicants loophole." This pivotal moment in U.S. cannabis policy, widely reported by outlets such as Ganjapreneur and state legal bulletins, signals a rapid shift in how hemp-derived cannabinoids, especially delta-8 THC and THCA-dominant products, may be regulated at the federal and state levels.
What Is the Hemp Loophole?
The legal landscape was forever altered by the 2018 Farm Bill, which federally legalized hemp and any derivatives with less than 0.3% delta-9 THC by dry weight. However, entrepreneurs quickly leveraged this definition to market products containing intoxicating cannabinoids—like delta-8 THC, delta-10 THC, and THCA—that are synthesized or concentrated from legal hemp extract. These are sold widely outside of regulated cannabis systems, often with little age verification or safety oversight.
Attorneys General from both political parties have argued this framework inadvertently created a marketplace for psychoactive compounds that can bypass the restrictions, taxes, and oversight prescribed for state-licensed marijuana.
The 2025 AG Coalition: The Letter and Its Demands
In a forceful letter to Congress, more than 30 AGs called for:
- A federal definition of hemp that incorporates a “total THC” standard—counting not only delta-9 THC but also THCA and other analogs using the standard decarboxylation formula.
- Prohibiting or strictly regulating the manufacture and retail sale of intoxicating hemp-derived cannabinoids (e.g., delta-8, delta-10 THC, and high-THCA products).
- Closing language loopholes that permit synthetic or isomerized cannabinoids to be sold outside the state-licensed dispensary system.
AGs pointed to marketing tactics targeting youth and the absence of rigorous safety or labeling controls typical of the regulated cannabis sector. Their demands reflect a growing bipartisan consensus that "loophole products" threaten both public health and the viability of state-legal cannabis businesses.
Congressional Response: Farm Bill and Beyond
The AG coalition’s letter has catalyzed a serious policy debate within the ongoing 2025 Farm Bill negotiations. Current drafts and parallel bills floated in Congressional committees propose:
- Clarifying hemp’s legal definition to apply a total THC or detectable THC cap—using the sum of delta-9 THC and THCA after decarboxylation (the 0.877 multiplier), as detailed in recent compliance guides.
- Restricting all intoxicating hemp cannabinoids to age-21+ consumers, with applicability to both online and retail channels.
- Potentially requiring that all intoxicating products be sold exclusively through state-licensed cannabis dispensaries, not ordinary smoke shops, convenience stores, or e-commerce sites.
While the precise language of the Farm Bill is still evolving, the momentum—fueled by AGs, health agencies, and even many cannabis industry trade associations—is firmly behind substantial reform.
Implications for Retailers and Multistate Brands
1. Expect State Harmonization—Fast
States have not waited for Congress. Over 20 have already taken steps to:
- Impose total THC standards for all hemp products.
- Ban or strictly regulate delta-8, THCA, and other psychoactive cannabinoids derived from hemp.
- Mandate state product registration, testing, and safety disclosures.
If Congress enacts Farm Bill language mandating a total THC/detectable THC threshold, expect nearly all states to rapidly update their own statutes and administrative codes for consistency. States with robust medical/recreational cannabis programs will likely steer all intoxicating cannabinoid products into the regulated dispensary system, phasing out smoke shop and gas station sales.
Legal blog analysis (see King & Spalding’s report) indicates that, if the Farm Bill passes with stricter language, federal agencies and state regulators may launch immediate enforcement campaigns. Anticipate:
- Short transition periods for retailers to clear out non-compliant stock.
- High-priority inspections targeting retailers/brands ignoring new age-gating, labeling, and cannabinoid content standards.
- Civil and potentially criminal penalties for repeat violations, particularly where youth access is involved.
3. Product and Marketing Standards Redefined
A federal “total THC” or “detectable THC” standard will force a major SKU and marketing overhaul:
- Labels and claims must clearly state total active THC content (delta-9 plus THCA, post-decarboxylation).
- Age-21 sales restrictions will be strictly enforced, both in-store and online.
- “Dispensary-grade” packaging and batch-level test results will become the norm for all psychoactive products.
Marketing language will face increased scrutiny, including bans on child-appealing imagery or unsubstantiated medical and recreational claims.
4. State/Federal Disputes and Legal Scenarios
While many states already impose stricter standards than federal law, new Farm Bill language could lead to:
- Federal preemption challenges—hemp businesses fighting state efforts to ban THC isomers; but recent court rulings (notably the Fourth Circuit in 2025) have reaffirmed states’ powers to go beyond the federal floor for health/safety reasons.
- Lawsuits around definitions (synthetic cannabinoid status, process-derived delta-8 vs. naturally occurring analogs).
- Accelerated rulemaking at the state level—watch for emergency orders, “grace periods,” and regulatory workshops in affected states.
Key Timeline: Expected Regulatory Shift
- Q4 2025: Likely Farm Bill passage (or companion legislation).
- Within 30-90 days after enactment: State agencies issue harmonizing rule proposals, launch transition guidance for retailers, and begin targeted enforcement.
- Fall 2025–Spring 2026: Rapid closure of gas station, vape/smoke shop, and online sales of intoxicating hemp-derived products except through dispensary channels.
Top Compliance Takeaways for Retailers and Brands
Prepare for a Total THC Regulatory Environment
- Audit every SKU for total THC (delta-9 plus THCA post-decarboxylation). Redesign or retire non-compliant products now.
- Segregate non-intoxicating, broad-spectrum/CBD-only SKUs from any psychoactive products.
- Synchronize inventory and labeling with new age-21+ requirements and retail platform standards.
Scenario-Plan for Rapid State Action
- Develop state-by-state compliance dashboards. Expect priority states (NY, CA, TX, FL, MI, IL) to act soonest.
- Join or monitor state trade association alerts and policymaker webinars for the latest on rulemaking.
Harden ID Verification and Tracking
- Use seamless ID and age-gating at every point of sale (in-store and delivery).
- Prepare batch tracking and COA integration into all retail tech stacks.
Monitor Enforcement and Litigation Updates
- Track federal and state enforcement priorities: early targets will be egregious actors and brands slow to adapt.
- Engage experienced compliance counsel to navigate evolving rules—especially for multistate operations.
Bottom Line: The AG coalition’s 2025 push marks the end of the hemp intoxicants free-for-all. Retailers and brands dealing in delta-8, THCA, or any intoxicating hemp product should scenario-plan now for a fast-moving post-loophole regulatory environment.
For the most current regulatory intelligence and compliance tools, use CannabisRegulations.ai to plan, monitor, and stay audit-ready as federal and state laws rapidly evolve.
