2025 Brings Major Shifts in Cannabis and Hemp Regulations Across the US

The year 2025 marked a significant period of transformation for the cannabis and hemp industries in the United States. With the long-awaited 2024 Farm Bill finally passed in early 2025, the legislation introduced pivotal changes to hemp policy, clarifying the definition of hemp and addressing the burgeoning market of intoxicating hemp derivatives (IHDs). This legislative overhaul was complemented by ongoing federal discussions on cannabis rescheduling, setting the stage for a more structured regulatory environment as 2026 approaches

Hemp policies saw aggressive state-level interventions throughout 2025, primarily targeting intoxicating hemp derivatives such as delta-8 THC and other semi-synthetic cannabinoids. Over a dozen states enacted new laws to restrict or regulate these products, creating a fragmented landscape that posed challenges for interstate commerce. This divergence led to operational difficulties for brands navigating varying definitions and regulations, often resulting in product seizures and market access issues

Litigation became a prominent theme as hemp companies contested state bans, while federal courts issued conflicting rulings on the preemption of state restrictions by the 2018 Farm Bill. These legal battles underscored the necessity for clearer federal guidance, which lawmakers attempted to address through the 2024 Farm Bill. Although the bill did not completely resolve the IHD dilemma, it provided a more coherent framework for the industry, particularly by harmonizing federal and state standards

On the federal front, the DEA's proposal to reschedule cannabis from Schedule I to Schedule III represented a landmark shift in policy. This move, although not yet finalized, is anticipated to greatly enhance research opportunities and reduce barriers to clinical trials. Public comments largely supported the rescheduling, highlighting cannabis's medical potential and aligning it with other Schedule III substances. However, opposition from law enforcement and certain political groups persists, citing concerns over increased use and commercialization

The 2025 regulatory changes have already begun to impact the market dynamics of both hemp and cannabis sectors. The crackdown on IHDs led to a contraction in the market for these products, yet the clearer framework provided by the Farm Bill has allowed traditional hemp categories to regain consumer trust. Meanwhile, state-legal cannabis markets continue to demonstrate resilience amidst regulatory fragmentation. As 2026 looms, the industry is poised for further evolution, driven by anticipated federal actions and ongoing state-level adjustments