Minnesota’s hemp industry is facing uncertainty as a new federal THC limit is set to take effect next year. The state legalized hemp-derived THC products in 2022, allowing up to 10 milligrams of THC per serving. But a federal requirement included in a recent government funding bill will limit THC to just 0.4 milligrams per container, a drastic reduction that business owners say could shut down the industry.
Rep. Nolan West, a Republican from Blaine who has worked on Minnesota’s cannabis legislation, said he initially didn’t believe the federal limit was real. After reading the bill, he called it “horrifying,” arguing that federal lawmakers do not understand the products they are regulating. He compared the decision to past moments in U.S. history when the government wiped out entire industries overnight. In Minnesota alone, hemp-derived THC brought in $11.6 million in tax revenue in its first year. Nationally, the hemp industry was valued at about $445 million in 2024.
Sen. Lindsey Port, a Democrat from Burnsville who authored Minnesota’s recreational cannabis law, said hemp-derived products will still be legal in Minnesota, but the federal limit will make normal operations nearly impossible. Businesses rely on federal systems for banking, taxes, shipping, and interstate sales, all of which could be affected. She warned that limiting THC so sharply would “grind the industry to a halt.”
One of the biggest concerns is the impact on breweries and beverage makers that have found success selling THC seltzers. West said many breweries rely on these products to stay financially stable. Without them, he warned, businesses will either have to stop selling the drinks, pay burdensome taxes, or operate illegally — all of which carry major risks.
Eric Redlinger, founder of Minneleaf, said he refuses to break the law but is unsure how his business can survive under the new rules. His company moved from Minnesota to Wisconsin due to earlier regulatory issues, but the federal limit would still make it difficult for him to ship products directly to customers. He said many of his customers rely on hemp products for pain and sleep issues, and losing the ability to ship could force him to close down.
Port compared the situation to cannabis legalization nationally, where states allow regulated sales but federal law still classifies marijuana as illegal. She said many cannabis businesses continue to operate despite the conflict, but she understands why hemp companies are anxious.
Some state lawmakers are exploring temporary relief for hemp businesses, but they acknowledge there are limits to what the state can do if federal law changes. West said his biggest hope is that the federal government will eventually reschedule cannabis — a move that President Biden has previously signaled interest in — which would resolve many of the conflicts between state and federal rules.
Industry leaders also worry about what could happen if the legal market collapses. Redlinger said consumers rely on hemp-derived products to manage conditions like pain and insomnia without turning to opioids or pharmaceuticals. He fears that without a legal market, people seeking alternatives will lose access to safe, tested products.
Redlinger noted that one of the hardest-hit segments would be hemp-derived beverages, which commonly contain 5 to 10 milligrams of THC per can. Under the new limit, these drinks would lose their intended effects. “You’d basically be buying juice,” he said.
Port warned that restricting a product people clearly want will not stop its production — it will only push it underground. She said driving the industry to the illicit market would create risks for consumers, including untested products and easier access for minors. She hopes state and federal lawmakers can work together to find a solution before the limit takes effect.
