Government Shutdown Ends — But a New Federal Hemp Rule Just Began
What the funding bill means for hemp-derived THC products
On October 1, 2025, the U.S. federal government entered a shutdown after Congress failed to pass full year appropriations. The shutdown lasted 43 days, making it the longest in U.S. history, until a funding deal was signed into law by President Donald Trump in November.
While the headline was “government reopens,” buried in the funding bill was a significant policy rider: sweeping new restrictions on hemp-derived cannabinoid products. For the multi-billion-dollar hemp industry and consumers of hemp-THC edibles, beverages and vapes, this change could reshape the marketplace entirely.
The Shutdown & Funding Bill
What happened
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The federal government shutdown began on October 1, 2025, when Congress did not approve all appropriations for the fiscal year.
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After weeks of negotiation, a funding measure was signed into law, ending the shutdown.
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The House passed the bill by a narrow margin (222-209) and the Senate approved it via cloture and then final vote.
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The deal included flags such as: back pay for federal employees, reopening shuttered agencies, and appropriating funds through certain deadlines (some agencies covered only until January or similar).
Why this matters
When must-pass funding bills include policy riders, industries and stakeholders must pay attention. In this case, the hemp/THC sector did. Because the funding bill had to pass (to reopen the government), the hemp language effectively bypassed a standalone policy debate.
Hemp Regulation Tucked Into the Bill
What’s changing
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Under the former regime, the federal definition of legal hemp (via the Agriculture Improvement Act of 2018/“2018 Farm Bill”) required hemp to contain no more than 0.3% THC by dry weight (delta-9) in the plant.
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The newly passed funding measure adds a stricter definition for consumable final products derived from hemp: any product containing more than 0.4 milligrams total THC per container will be excluded from the “legal hemp” classification.
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It also bans hemp-derived cannabinoids that are synthetically produced or not naturally occurring in the plant.
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The rider is reported to appear in Section 781 of the funding measure (per one media account).
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The effective date includes a grace period: many sources report the new rule takes effect one year after enactment for certain products.
Who’s affected and how
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The consumables market for hemp-THC ingestibles (edibles, gummies, drinks, vapes) may face drastic contraction. For example, the industry projected multi-billion sales, but the < 0.4 mg limit would render many existing products non-compliant.
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States that embraced hemp production (such as Texas, Minnesota) are sounding alarm. Minnesota hemp businesses said the new 0.4 mg threshold could “wipe out” their market.
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Industry advocates argue even non-intoxicating CBD products could be inadvertently affected, since many contain trace THC above the threshold per container.
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The policy change is coupled with major federal oversight: finished products must be derived only from naturally occurring cannabinoids in hemp; synthetic versions are excluded. That means manufacturers may need to overhaul supply chains.
Why it matters
In short: the law uses the funding bill to re-write the federal definition of “hemp” (in the context of consumables) and thereby takes away the safe-harbor previously enjoyed by many hemp-derived THC products. Businesses, farmers, retailers and regulators now face a radically changed legal framework.
Why This Linkage (Shutdown + Hemp) Is Interesting
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The hemp regulation wasn’t the top-of-mind issue in the funding bill; it was a rider. That means it may have received less scrutiny than a standalone bill.
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Because the funding bill had to pass (to end the shutdown), the hemp language leveraged the urgency to push through policy change.
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For the hemp industry, the timing is disruptive: investments, state regulation frameworks, product development all assumed the older, looser regulatory regime. A sudden shift means hundreds of businesses now must pivot or risk non-compliance.
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Politically, the move shows how spending packages become vehicles for broader regulatory change — and how industries must monitor appropriation bills, not just dedicated policy bills.
What To Watch Next
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Regulatory guidance: Federal agencies (USDA, FDA) will likely publish rule-making or guidance clarifying how “total THC per container” is measured, how “synthetic” is defined, etc.
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State reaction & legal challenges: States with large hemp industries (KY, TX, MN) may push back or file legal challenges arguing federal overreach or ambiguity in definitions.
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Industry adaptation: Businesses may reformulate products to fall under the 0.4 mg threshold, pivot to non-intoxicating products, or reclassify under state cannabis regulation rather than hemp.
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Legislative fixes: Some lawmakers may attempt to amend the law during the one-year grace period to soften the rule, given industry pressure.
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Market shifts: Expect consolidation in the hemp/THC-consumables space, increase in compliance costs, and possibly growth of unregulated/black-market alternatives if demand persists.
Conclusion
The end of the 2025 government shutdown was welcomed news — but for the hemp industry and consumers of hemp-derived cannabinoid products, it marked the start of seismic regulatory change. A must-pass funding bill has rewritten the federal definition of legal hemp for consumables, introducing a 0.4 mg THC limit and banning synthetic hemp-derived cannabinoids. The result: massive uncertainty, business risk, and pressure on states, manufacturers and farmers.
As always, when policy meets industry, the devil is in the details — and in this case, the “detail” is baked into the appropriations law that reopened the government.