By Jason Pickle, President & Founder, Volunteer Botanicals
As the hemp industry continues to evolve, so do the regulations surrounding it. The newest federal spending bill — the same bill that ended the recent government shutdown — includes language that redefines “hemp” in a way that would exclude intoxicating hemp products. This announcement has created uncertainty across the functional beverage space, but it’s important to keep perspective.
Before diving into the details, here is our official position.
“While we are disappointed to see that the ban on intoxicating hemp products was included in the spending bill that finally ended the government shutdown, we are not ready to panic with regard to hemp-derived cannabinoid products. We don’t think those businesses currently producing or planning to produce these products should panic, either. A lot can happen over the next 12 months, and we are not convinced this decision won’t be reversed. In the meantime, hemp-derived beverages and other products are perfectly legal to produce and sell – and as everyone knows there is a huge and growing market for these products. We believe as we have always believed, that functional beverages – including those with THC – are here to stay because the public wants them to be. We don’t think that trend has come close to peaking.”
— Jason Pickle, President & Founder, Volunteer Botanicals
Below is a breakdown of the most important questions surrounding the new hemp regulations — and what they mean for beverage and product manufacturers.
What Are the New Hemp Regulations?
Q: What regulation was included in the federal spending bill?
The language included in the bill narrows the definition of “hemp” by excluding intoxicating hemp products. As written, the new provisions would restrict any product containing more than 0.4 mg of THC — an extremely low threshold.
If unchanged, this rule would make nearly all hemp-derived THC products illegal in the U.S. after a 12-month period.
Important: The regulation does not take effect until November 2026, giving the industry one full year before any impact.
Are Hemp-Derived THC Beverages Still Legal?
Q: Do manufacturers need to stop producing hemp-derived THC beverages or products?
No.
Hemp-derived THC beverages and products remain fully legal to manufacture, sell, and distribute today.
Producers across the country are continuing business as usual, and consumer demand remains strong. The best course of action right now is to stay informed—not to stop creating or innovating.
How Will States Respond?
Q: What about states like Tennessee, Minnesota, and others with existing hemp beverage frameworks?
It is still unclear how individual states will respond. States with strict regulatory systems in place are already expressing concern about the updated federal language, and some legislators note that it may conflict with state-level authority.
Whether states choose to challenge or adjust their frameworks remains to be seen, but this issue is far from settled.
Will the New Hemp Regulation Be Reversed?
Q: What are the chances this decision will change?
There is already significant pushback from:
- Consumers
- Manufacturers
- Distributors
- Retailers
- Supply-chain partners
- Bipartisan lawmakers
Because the rule does not take effect for 12 months, the industry has time to organize, advocate, and push for revisions. It is entirely possible that the regulation could be changed, blocked, or overturned before it ever becomes enforceable.
Historically, the hemp industry has seen many regulatory swings — and each time, it has adapted and continued forward.
What Should Beverage Manufacturers Do Now?
Q: How should brands move forward with product development?
Our recommendation is simple:
Stay the course.
If you are already producing hemp-derived THC beverages successfully, there is no reason to stop.
If you are preparing to launch THC beverages, there is no reason to delay — and in some cases, this moment creates even more urgency to innovate and establish your presence.
At the same time, we are seeing a surge of interest in non-hemp functional ingredients, including:
- Lion’s Mane
- Cordyceps
- Reishi
- L-Theanine
- Saffron
- Nootropics and adaptogens
These ingredients:
✔ require no special licensing
✔ have strong consumer demand
✔ fit seamlessly into functional beverage formulations
The functional beverage market continues to grow rapidly — with or without hemp.
The Bottom Line: The Hemp Industry Is Not Slowing Down
Consumer demand for functional beverages — including THC beverages — remains incredibly strong. While the regulatory landscape may shift, the market itself continues to accelerate.
At Volunteer Botanicals, our mission remains the same:
to support brands, manufacturers, and beverage innovators with the highest-quality functional and cannabinoid ingredients, regardless of regulatory changes.
We will continue to monitor developments closely and provide updates, guidance, and solutions as the situation evolves.
If you have questions about how these changes may impact your products or want support in exploring alternative functional ingredients, our team is here to help.
👉 Contact us anytime at info@volunteerbotanicals.com We’re here to navigate this together.