Texas Governor Abbott’s surprise veto of hemp ban legislation creates new regulatory opportunities while other states pursue varying approaches to hemp-derived THC products in 2025.

Published: July 30, 2025

The hemp industry is navigating a complex legislative landscape in 2025, with multiple states proposing varying approaches to hemp regulation. From Texas’s surprising veto to new federal delays, these developments are creating both opportunities and challenges for hemp businesses and consumers nationwide. Here’s your complete roundup of the most important hemp law changes happening right now.

Texas: Abbott’s Surprising Veto Creates New Path Forward

Governor Abbott Rejects Complete Hemp Ban

In a move that surprised many political observers, Governor Greg Abbott vetoed Senate Bill 3 on June 22, 2025, rejecting the Legislature’s attempt to ban hemp-derived THC products in Texas. The move infuriated Lt. Gov. Dan Patrick, the powerful head of the Senate, who had called the ban among his top five bills over 17 years in the Legislature.

Special Session Called for Hemp Regulation

Rather than accepting a complete ban, Abbott called for a 30-day special session beginning July 21, with Senate Bill 3 among the initial agenda items. This suggests the Governor prefers a regulatory approach over prohibition, creating new opportunities for the hemp industry to influence more balanced legislation.

Political Tensions Emerge

Lt. Gov. Dan Patrick, a staunch supporter of SB3, criticized Abbott saying “The governor of the State of Texas wants to legalize recreational marijuana in Texas”. This political division may actually benefit the hemp industry by creating space for more moderate regulatory approaches.

What This Means for Texas Hemp

The veto and special session create several implications:

• Temporary Relief: Hemp businesses can continue operating while new legislation is crafted
• Regulatory Opportunity: Industry can advocate for reasonable regulations rather than prohibition
• Market Stability: Texas remains one of the largest hemp markets in the US for now
• Uncertainty Continues: Final regulatory framework still unknown

Federal Developments: USDA Provides Testing Relief

DEA Laboratory Requirement Delayed

The U.S. Department of Agriculture (USDA) Agricultural Marketing Service is delaying until December 31, 2025, the enforcement of a requirement that all hemp must be tested by a Drug Enforcement Agency (DEA)-registered laboratory. This delay provides significant cost relief for hemp farmers and processors facing expensive compliance requirements.

Farm Bill Reauthorization Looms

Congressional discussions continue around the next Farm Bill, with proposals that could substantially impact hemp regulations. Industry observers expect significant changes to hemp definitions and THC limits in the upcoming federal legislation.

State-by-State Hemp Regulation Updates

Florida: New Rules Take Effect

New Florida hemp extract rules effective March 12, 2025, impact advertising, labeling, and packaging. Florida SB 334 limits hemp extract products to 2mg of total delta-9 THC per serving and 20mg per container on a wet-weight basis, whichever is less.

Florida’s approach represents a middle ground between prohibition and unrestricted access, focusing on:

• Product Limits: Specific THC caps per serving and container
• Marketing Restrictions: Enhanced advertising and labeling requirements
• Quality Standards: Updated testing and compliance protocols

Ohio: Targeting “Intoxicating” Products

Ohio’s Senate Bill 86 (SB 86) introduces a stricter approach to hemp regulation by targeting “intoxicating” hemp products. Under the bill, products containing more than 0.5 milligrams of delta-9 THC per serving or more than 2 milligrams per package would be classified as intoxicating.

Ohio’s regulatory framework would create:

• Low THC Limits: Much more restrictive than federal hemp standards
• Classification System: Distinguishing between “intoxicating” and regular hemp
• Compliance Challenges: Requiring product reformulation for many existing items

Nebraska: Seeking CBD-Only Approach

LB316 focuses on redefining hemp regulations under the Nebraska Hemp Farming Act. This bill prohibits the sale of hemp-derived cannabinoids other than FDA-approved cannabidiol (CBD) products, effectively banning popular hemp-derived THC products.

L.B. 316 seeks to prohibit the sale of hemp products in the state that are not “cannabidiol products”, or products that contain CBD as the primary ingredient. This approach would:

• Limit Product Types: Only CBD-focused products allowed
• Eliminate THC Products: All hemp-derived THC variants banned
• FDA Compliance: Require products to meet federal food and drug standards

Other State Activity

Hemp Bill Updates in Florida, Iowa, Kentucky, Nebraska, Ohio, South Carolina, South Dakota and Texas indicates widespread legislative activity across multiple states, creating a complex patchwork of varying regulations.

Industry Impact and Business Adaptation

Immediate Challenges for Hemp Businesses

The current legislative environment creates several operational challenges:

Compliance Complexity: Companies must navigate varying state requirements across their markets Product Development: Different THC limits require multiple product formulations Market Access: State restrictions can eliminate significant consumer bases Legal Uncertainty: Changing laws create ongoing compliance risks

Strategic Business Responses

Hemp companies are adapting through various strategies:

• Geographic Diversification: Expanding into hemp-friendly states while maintaining presence in restrictive markets
• Product Line Adaptation: Developing compliant formulations for different state requirements
• Regulatory Monitoring: Enhanced systems for tracking legislative changes
• Industry Advocacy: Increased participation in lobbying and educational efforts

Consumer Access and Market Trends

Geographic Shopping Patterns

Hemp consumers increasingly face location-based purchasing decisions:

• Border Commerce: Consumers traveling to hemp-friendly states for purchases
• Online Restrictions: Interstate shipping complications due to varying state laws
• Product Availability: Different product types available in different markets
• Price Variations: Compliance costs affecting regional pricing

Quality and Safety Considerations

Varying state regulations create different safety standards:

• Testing Requirements: Some states mandate more rigorous testing than others
• Labeling Standards: Different information requirements for product labels
• Purity Standards: Varying limits on contaminants and additives
• Third-Party Verification: Some states require independent testing while others don’t

What’s Next: Key Developments to Watch

Texas Special Session Developments (Currently Underway)

The Texas special session that began July 21 is now actively addressing hemp regulation, with Senate Bill 5 (SB5) filed to ban products containing any detectable amount of hemp-derived cannabinoids. The Senate Affairs Committee unanimously advanced the measure to the full Senate after several hours of testimony, while Governor Abbott has clarified his position supporting regulation of hemp products limited to 0.3% THC or 3 milligrams of THC.

Key developments from the ongoing session:

• New Legislation: Senate Bill 5, nearly identical to the vetoed SB3, proposes banning manufacture and sale of hemp-derived THC products
• Committee Action: Senate committee doubled down on THC ban, saying state and local governments lack resources for regulations
• Governor’s Position: Abbott supports protecting children under 21 while allowing regulated adult access with specific THC limits
• Industry Opposition: Texas Hemp Business Council argues the state has built a thriving hemp industry supporting jobs and small businesses

Federal Farm Bill Discussions

Congressional activity on the next Farm Bill could reshape the entire hemp landscape:

• Hemp Definition: Potential changes to THC limits or testing requirements
• Interstate Commerce: Clarification of state vs. federal authority
• FDA Oversight: Possible changes to food and supplement regulations
• Industry Standards: Federal quality and safety requirements

Additional State Legislative Sessions

Many states continue legislative activity with potential hemp implications:

• California: Reviewing comprehensive hemp regulations
• New York: Considering retail and distribution changes
• Illinois: Evaluating product safety and testing standards
• Michigan: Updating processor licensing requirements

Industry Advocacy and Legal Challenges

Trade Association Response

Hemp industry organizations are mobilizing resources to address legislative challenges:

Educational Campaigns: Public information about hemp safety, benefits, and economic impact Direct Lobbying: Engagement with state legislators and regulatory agencies Coalition Building: Partnerships with agricultural groups, business associations, and consumer advocates Research Support: Funding studies on hemp safety and therapeutic applications

Legal Strategy Development

The industry is pursuing various legal approaches:

• Constitutional Challenges: Questioning state authority to restrict federally legal hemp
• Commerce Clause: Arguments about interstate trade restrictions
• Regulatory Process: Challenging agency rulemaking procedures
• Industry Standards: Developing voluntary compliance protocols

Economic Implications

Market Size and Growth Projections

The current regulatory uncertainty affects hemp market dynamics:

• Investment Hesitancy: Venture capital and private equity showing increased caution
• Market Consolidation: Smaller companies struggling with compliance costs
• Geographic Concentration: Business activity shifting to hemp-friendly states
• Product Innovation: R&D focused on compliant formulations

Employment and Agriculture

Hemp regulation changes affect multiple economic sectors:

• Farm Income: Hemp cultivation provides significant revenue for agricultural communities
• Manufacturing Jobs: Processing and product development employment
• Retail Sector: Dispensaries, health stores, and online retailers
• Professional Services: Legal, compliance, and consulting opportunities

Looking Forward: Regulatory Trends and Predictions

Likely Regulatory Patterns

Based on current legislative activity, several trends are emerging:

State Sovereignty: More states asserting authority over hemp regulation regardless of federal law Consumer Safety Focus: Increased emphasis on testing, labeling, and quality standards THC Limitations: Growing consensus around lower THC limits for hemp products Age Restrictions: More states implementing 21+ age requirements for hemp purchases

Industry Maturation

The hemp sector is evolving toward greater professionalization:

• Self-Regulation: Industry-developed safety and quality standards
• Standardization: Consistent testing methodologies and product classifications
• Consumer Education: Improved public understanding of hemp products and effects
• Medical Integration: Growing acceptance in healthcare and wellness sectors

Conclusion: Navigating Uncertainty with Strategic Planning

The 2025 hemp legislative landscape demonstrates both the challenges and opportunities facing this rapidly evolving industry. Texas Governor Abbott’s veto of the hemp ban provides a crucial victory for industry advocates while highlighting the ongoing political tensions around hemp regulation.

For hemp businesses, the current environment requires:

• Proactive Compliance: Staying ahead of changing regulations rather than reacting to them
• Strategic Flexibility: Maintaining ability to adapt to different state requirements
• Industry Engagement: Active participation in advocacy and standard-setting efforts
• Quality Focus: Exceeding minimum requirements to demonstrate industry responsibility

For consumers, understanding local laws and product quality standards becomes increasingly important as state regulations diverge.

The ultimate resolution of current regulatory tensions will likely require collaboration between industry stakeholders, state regulators, and federal agencies to develop frameworks that balance consumer safety with market access and innovation.

As the Texas special session approaches and other states continue legislative deliberations, the hemp industry must remain vigilant, engaged, and committed to responsible practices that support long-term regulatory stability and market growth.

The next six months will be crucial in determining whether the US hemp industry can achieve regulatory clarity that supports both consumer safety and business viability across state boundaries.

Sources: Texas Tribune, Governor Abbott’s Office, USDA Agricultural Marketing Service, U.S. Hemp Roundtable, McGlinchey Stafford PLLC, and various state legislative resources.

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