Tribes Quickly Mobilize in Response to Federal Hemp Ban

11/24/2025

WASHINGTON, D.C. – The recently enacted FY 2026 Continuing Appropriations, Agriculture, Legislative Branch, Military Construction and Veterans Affairs, and Extensions Act, 2026, H.R. 5371, a part of a larger continuing resolution to fund and reopen the federal government last week, includes a major provision set to dramatically reshape the hemp industry. Effective November 12, 2026, the new law revises the federal definition of hemp and establishes a broad ban on most intoxicating hemp-derived products. This significant change could immediately and severely impact existing Tribal hemp industries and investments, many of which are operational under the USDA-approved programs. In quick response, Tribes quickly mobilized to respond to the federal ban by presenting an Emergency Resolution SEA-25-130, Supporting Safe Regulation of Hemp-Derived Cannabinoids in Indian Country and Protecting USDA-Approved Tribal Hemp Programs at the National Congress of American Indians’ (NCAI) 82nd Annual Convention.

The Hemp “Loophole”

These new restrictions close the perceived regulatory “loophole” created by the 2018 Farm Bill, which allowed growers to produce hemp-derived cannabinoid products, such as Delta-8 THC found in many popular hemp-derived beverages and edibles, that could deliver a marijuana-like “high.” THC, or tetrahydrocannabinol, is the main psychoactive compound in the cannabis sativa plant that causes the intoxicating effects or “high” when people use it. The cannabis plant produces more than 100 cannabinoids, the most popular being THC and CBD (cannabidiol). The 2018 Farm Bill removed hemp from the federal Controlled Substances Act, effectively legalizing CBD if it comes from hemp, making it a legal agricultural commodity. Hemp products with less than 0.3% tetrahydrocannabinol (THC) by dry weight, can be legally grown, processed, and sold.

The Farm Bill did not account for other forms of THC, known as isomers, or certain chemical processes that can synthetically convert non-intoxicating CBD into psychoactive compounds, like delta-8 THC. This allowed manufacturers to produce and sell products that might provide the effects of a high through retail channels, including gas stations and online sales, short of regulations that addressed testing, safety and age restrictions. All states have legalized access to hemp-derived CBD in a variety of forms, however, the legality of CBD products differs from state-to-state, thereby providing access to CBD products across the nation that may offer intoxicating effects.

The New Federal Hemp Ban

The new law redefines what legal hemp is and bans finished hemp products that contain more than 0.3% of total THC per container. This updated and reduced threshold level is expected to ban many current consumable products that make up the estimated $28 billion-dollar industry, including a wide array of beverages and gummies. The updated definition focuses on total THC for finished products, counting all forms of THC, including THCA and other psychoactive cannabinoids, rather than just Delta-9 THC on a dry weight basis. The new law prohibits any product that contains more than 0.4 milligrams of combined total THC and any other cannabinoid that produces “similar effects.” The new law also effectively prohibits any cannabinoids synthesized or manufactured outside of the natural cannabis plant, directly targeting compounds like Delta-8 THC that are commonly derived from hemp-based CBD. This means that hemp cannabinoids that do not exist naturally in the plant will be banned and cannabinoids that do exist naturally but are synthesized or manufactured outside of the plant will also be banned. Finally, the law also mandates that the Food and Drug Administration (FDA) and other relevant agencies issue guidance within 90 days to identify all cannabinoids that will be impacted by the new definition, which will ultimately create a clear “allowed vs. prohibited” list.

Impacts on Tribes and States

The federal ban overrides the existing regulatory frameworks of several states and effectively preempts established state hemp programs, as well as United States Department of Agriculture (USDA)-approved Tribal hemp programs. This federal ban severely impacts the principles of tribal sovereignty and self-determination by impacting a tribal government’s right to regulate economic activity within their own lands. Though state and tribal regulatory frameworks varied widely, states and tribes that prohibit recreational cannabis and where hemp-derived product consumption is resultingly higher, will be the most affected.

The new federal law calls for states to modify their laws, leading to uncertainty as to how and when. States will likely push back and opt to regulate hemp THC products under existing state-regulated cannabis systems as opposed to implementing full prohibition. Tribes will also face the complex challenge of defending their inherent right to govern and profit from their hemp enterprises.

Consequences of the Federal Hemp Ban

The booming U.S. hemp industry will face a devastating blow as the federal ban will not only ban many products like gummies, vapes, beverages, and topical creams with more than the allowable THC content, the new federal hemp ban will unintentionally apply to many nonintoxicating CBD products. The new THC limit requires all cannabinoids found in products to count towards “total THC” effectively banning certain hemp products that use multiple types of cannabinoids or concentrations more than 0.3% of total THC in the production process.

The ban will create significant economic impacts nationwide, including lost jobs and state tax revenue, especially in states where hemp product consumption is high due to state bans on recreational cannabis. In states where some hemp-derived cannabis product sales may continue, doing business across state lines may be impacted.

This new federal law also threatens to negatively impact years of investment, job creation, and the exercise of Tribal regulatory power. Unlike states, which may have the legal infrastructure to transition products to existing state-regulated cannabis systems, tribes will face a more complex dilemma. The ban will force tribes to either stop established legal commerce or pursue expensive and lengthy legal challenges to defend their sovereign right to control and profit from hemp enterprises on their own territory.

The ban will also bring significant banking challenges already faced by the recreational cannabis industry. Consumers will lose access to many hemp-derived products that they rely on for medicinal or wellness purposes and are likely to turn to the black market. As the federal agencies hone in on specifics of the ban, we can expect more far-reaching consequences for consumers, manufacturers, retailers, and farmers.

Legal Challenges and Advocacy

The one-year grace period provides the industry and advocates with time to assess, prepare and take immediate action, including advocacy for a more tailored and workable federal regulatory framework. Tribes and tribal enterprises engaged in hemp-derived product market are encouraged to contact their congressional delegations to share impacts that this new definition will have on their tribal hemp industry and economy.

The NCAI Emergency Resolution SEA-25-130, titled "Supporting Safe Regulation of Hemp-Derived Cannabinoids in Indian Country and Protecting USDA-Approved Tribal Hemp Programs," is an urgent, collective tribal response to the federal ban in the FY2026 Appropriations Act. The core message of the resolution is that the federal government should not undermine the significant economic investments and regulatory frameworks built by Tribes, but rather support safe, effective, and sovereign Tribal regulation of these products on their lands. The resolution emphasizes that the federal government must respect and preserve tribal sovereignty by recognizing the regulatory authority Tribal Nations already established under the 2018 Farm Bill. It also calls upon Congress and USDA to amend or revise the new ban to exempt USDA-approved Tribal hemp programs from the restrictive changes.

Skenandore Wilson LLP continues to actively monitor all updates related to the hemp and cannabis industry.

Skenandore Wilson LLP is dedicated to the representation of Tribal Nations, Tribal entities, and individual Tribal members throughout Indian Country.  Our mission is to support and advance the sovereignty, self-sufficiency, and self-governance of our Tribal clients.  To learn more about how we can assist you, contact us at info@skenandorewilson.com or 608-608-1210.