Indiana’s rapidly expanding hemp sector is bracing for major changes after federal lawmakers approved a nationwide ban on most hemp-derived products as part of the bill that ended the recent 43-day government shutdown.
The provision, set to take effect in November 2026, targets products containing more than 0.4 milligrams of total THC per container, effectively closing a loophole created by the 2018 Farm Bill. That loophole allowed the sale of delta-8 THC products—items that produce marijuana-like effects despite being derived from legally grown hemp.
The looming federal prohibition threatens a lucrative market that contributed over $1 billion to Indiana’s economy in 2023, including an estimated $637 million in retail revenue attributed largely to delta-8 THC sales.
Retailers across the state say the announcement leaves them uncertain about how enforcement will unfold and what it means for their long-term viability. Many businesses rely heavily on delta-8 products, which have far outpaced the demand for low-potency CBD oils originally envisioned under the 2018 legislation.
According to business owners, most products currently on store shelves would fail to meet the new federal standard.
Legal ambiguity is familiar terrain for the hemp industry, and advocates believe the one-year transition period could push Indiana lawmakers to implement broader regulations. A 2024 proposal would have imposed mandatory testing, packaging standards, and age limits for THC products, but it stalled amid concerns that such measures appeared too close to endorsing marijuana use.
Industry groups argue that the delayed implementation indicates potential willingness in Washington to revisit or adjust the ban. Without state-level action, retailers warn that Hoosier customers may increasingly turn to neighboring Michigan—where recreational marijuana is legal—once federal restrictions take effect.