Regulatory Chaos: The Federal-State Clash Over THC Limits Threatens Missouri's Hemp Industry

The Looming Federal Deadline

As Missouri lawmakers prepare for the 2026 legislative session, a regulatory storm is brewing that threatens to upend the state’s burgeoning hemp industry. The catalyst for this impending crisis is new federal THC limits scheduled to take effect in November, contained within a federal spending package approved by Congress and signed by the president. These changes represent the most significant shift in hemp regulation since the 2018 Farm Bill legalized industrial hemp, and they’re forcing Missouri businesses and policymakers into a frantic scramble to understand their implications.

The core legislative change amends the fundamental definition of hemp that has governed the industry for years. Previously, hemp was defined as any part of the cannabis plant containing 0.3% or less delta-9 THC by dry weight. The new federal standard changes this to a total THC concentration of less than .3% on a dry weight basis, while also prohibiting products from containing more than 0.4 milligrams of THC per container. This technical-sounding adjustment has profound practical consequences that could effectively outlaw many products currently sold in gas stations, liquor stores, and smoke shops across Missouri.

The Science Behind the Regulation

The regulatory shift addresses what cannabis regulators have identified as a significant loophole in the original hemp definition. As explained by the Cannabis Regulators Association in their 2023 report to Congress, many hemp businesses have been selling “THCA hemp” flower containing less than 0.3% delta-9 THC. However, cannabis plants naturally produce THCA, not THC, and when smoked, THCA converts into delta-9 THC through a process called decarboxylation. This conversion means that products legally classified as hemp can produce the same psychoactive effects as marijuana.

The weight-based threshold presents another critical issue. While 0.3% THC represents a small amount in plant material, when applied to edible products like chocolate bars or beverages, this percentage can translate into hundreds of milligrams of THC. The association provided striking examples: a 50-gram chocolate bar at 0.3% THC would contain around 150 mg of THC—30 times the standard 5 mg dose established by the National Institute on Drug Abuse. A family-sized pack of cookies could contain approximately 1,700 mg of THC under the same threshold.

Missouri’s Legislative Response

Missouri lawmakers have responded with a patchwork of competing legislative proposals that reflect deep divides in how to approach this complex issue. Republican state Sen. David Gregory of Chesterfield has proposed aligning state regulations with the new federal limits, which would effectively ban current hemp products by regulating them the same as marijuana. This approach would require hemp products to be sold exclusively in licensed cannabis dispensaries, fundamentally restructuring the industry.

In contrast, Republican state Rep. Matthew Overcast of Ava expresses “no concerns” about federal enforcement and plans to push a constitutional amendment that would allow marijuana and intoxicating hemp products to be sold alongside alcohol and tobacco. Democratic state Sen. Karla May of St. Louis has proposed a middle ground with a $1,000 annual registration fee that would allow continued sales outside dispensaries, though her bill doesn’t incorporate the new federal definition.

The Business Impact and Uncertainty

The regulatory uncertainty creates immediate practical problems for hemp businesses. As Jessica Velazquez, a Las Vegas-based accountant with Beach Fleishman, warned during a November webinar, financial service providers including banks, payroll companies, and merchant processors may take a “more conservative approach” and cease servicing hemp businesses. This could mirror the banking challenges that have plagued marijuana companies, where federal prohibition has created significant obstacles to basic financial services.

Craig Small, a Denver-based cannabis attorney, notes that hemp companies could soon face the same tax disadvantages as marijuana businesses, where no business tax deductions are allowed. The situation creates what Small describes as moving from “DEFCON 1 to DEFCON 3” in terms of regulatory risk, with Trump’s recent executive order to reschedule marijuana adding another layer of complexity to an already convoluted landscape.

The Constitutional and Federalism Questions

This regulatory conflict raises fundamental questions about American federalism and the proper balance between state and federal authority. For the fourth consecutive year, Missouri lawmakers are attempting to regulate intoxicating hemp products, with previous debates ending in stalemates. The tension between state autonomy and federal supremacy creates a constitutional gray area that leaves businesses operating in legal limbo.

The congressional report acknowledges that federal agencies “may lack the resources to broadly enforce the laws prohibiting intoxicating hemp products,” suggesting that practical enforcement may fall to states regardless of federal policy. This reality highlights the ongoing tension in American drug policy, where federal law often exists in theory while state enforcement determines practical reality.

A Crisis of Regulatory Leadership

The current situation represents more than just another policy debate—it reveals a fundamental failure of regulatory leadership at both state and federal levels. The piecemeal approach to cannabis regulation has created a patchwork of conflicting standards that serves neither public health nor economic interests. Businesses cannot plan for the future when regulatory foundations shift with each legislative session, and consumers cannot make informed choices when product safety standards remain ambiguous.

The public health concerns raised by Jack Cardetti, spokesman for the Missouri Cannabis Trade Association, are legitimate and serious. The lack of consistent oversight creates genuine risks for consumers who may unknowingly purchase products with wildly varying potency levels. However, the solution cannot be regulatory overreach that effectively destroys legitimate businesses and limits consumer access to products that many use responsibly.

The Path Forward: Principles Over Politics

What’s desperately needed is a coherent regulatory framework based on consistent principles rather than political expediency. Any effective solution must balance several critical concerns: ensuring product safety and accurate labeling, preventing underage access, maintaining fair market competition, and respecting the constitutional rights of states to regulate commerce within their borders.

The current approach—where federal agencies create standards without clear enforcement mechanisms while states develop conflicting regulations—serves nobody well. It creates uncertainty for businesses, confusion for consumers, and enforcement challenges for regulators. The situation demands congressional leadership to establish clear, consistent standards that states can adapt to their specific circumstances rather than the current chaotic patchwork.

The Human Cost of Regulatory Uncertainty

Behind thepolicy debates and legislative maneuvering lie real human stories—small business owners who have invested their livelihoods in the hemp industry, consumers who rely on these products for various purposes, and regulators trying to navigate an impossibly complex landscape. The regulatory uncertainty creates tangible economic harm and personal stress that often gets lost in political discussions.

When businesses cannot access banking services or plan for future regulations, they cannot grow, hire employees, or contribute to economic development. When consumers face constantly changing product availability and safety standards, they cannot make informed choices about their health and wellness. This regulatory chaos serves neither economic freedom nor public health—it simply creates unnecessary barriers and uncertainty.

Conclusion: The Need for Regulatory Clarity

The coming months will be critical for Missouri’s hemp industry and for cannabis regulation more broadly. As federal limits take effect and state lawmakers debate competing approaches, the need for clear, consistent regulation has never been more urgent. The solution must balance legitimate public health concerns with respect for economic freedom and state autonomy.

What’s ultimately required is congressional action to create a coherent federal framework that allows for state variation while establishing consistent safety standards and enforcement mechanisms. Until then, businesses will continue operating in legal limbo, consumers will face uncertain product safety, and states will waste resources debating regulations that may be rendered obsolete by federal action. The current approach represents a failure of governance that serves nobody’s interests—it’s time for principled leadership that puts sensible regulation above political posturing.