New Federal Hemp Law Sparks Uncertainty in New York Cannabis Market

Congress recently approved legislation that will significantly alter the landscape of the cannabis industry in New York. This new federal hemp law, which is set to take effect in November 2026, restricts the production and sale of certain cannabis edibles, drinks, and vapes derived from hemp. The legislation was included in a larger bill that ended a federal government shutdown, leaving many in the cannabis sector grappling with the implications.

Leaders in New York’s legal cannabis industry, which has evolved substantially since the state legalized recreational marijuana in 2021, are now assessing how these changes will affect their businesses. Allan Gandelman, who operates the Head & Heal cannabis business in Cortland County and is a founding member of the Cannabis Association of New York, expressed his concerns: “There’s a lot going on here and a lot to think about. It’s been a bit of a surprise to some people, so there’s different reactions.”

The federal law essentially reverses changes made in 2018, which deregulated hemp products and allowed for a surge in hemp cannabis that was intended to be less potent than marijuana, containing less than 0.3% THC. Critics argue that this deregulation created loopholes, leading to hemp products with THC levels comparable to those found in marijuana.

Despite these changes, the new law does not directly impact the over 500 legal marijuana dispensaries currently operating in New York. Experts like Heather Trela from the Rockefeller Institute of Government suggest that the effects on other cannabis businesses may also be limited. “New York already has some of the strictest language regarding hemp in the country,” Trela noted. “If you were legal under the old law, you will probably be legal under the new law.”

Adjustments will still be necessary for many businesses. For instance, Tim Shore, co-founder of Buried Acorn Brewing, anticipates that he might have to discontinue some of his THC-infused beverages, which are currently sold under the brand Off Shore. “What they’re talking about is exactly a product I make,” Shore said. He may pivot to using cannabis (marijuana) as a base and sell exclusively to licensed dispensaries, which would not be affected by the new law.

Ayrloom, another Central New York company that sells THC beverages, faces a similar predicament. According to company president Eddie Brennan, the new federal law bans the sale of Delta 9 THC, a product that constitutes a significant portion of their business. “That would completely go away after a year if they are not able to extend or find a path to regulation,” Brennan stated. Fortunately, Ayrloom also has a range of products available through licensed dispensaries, which should remain unaffected.

The implications of the law are particularly concerning for those operating in the hemp sector. Rodney Haymes, who is launching a licensed recreational marijuana dispensary in DeWitt, also operates a shop focused on a hemp product called THCa. With the new federal regulations, Haymes expressed apprehension about the future of his business. “I anticipate some turbulence for sure,” he said. “If it takes effect as is here in NY or any other state, it will decimate the hemp industry as we know it.”

In contrast, Joe Rossi, founder of Modern Advocacy, remains optimistic about the changes. He noted that intoxicating hemp products sold outside regulated systems have caused confusion and safety concerns among consumers. “With this new federal law, that chapter is ending,” Rossi commented. “This is a reset moment for the industry and for the consumers who deserve safe, accurately labeled products.”

The New York Office of Cannabis Management is currently reviewing the federal legislation and its potential impact on local regulations. The office emphasized that it has implemented stringent standards to ensure that cannabinoid hemp products sold in New York adhere to good manufacturing practices, thereby safeguarding public health and consumer safety.

As the cannabis industry continues to navigate these developments, it remains clear that the new federal hemp law represents a significant shift. Stakeholders will need to adapt and potentially redefine their strategies in the evolving regulatory environment.