As the industry clings to the hope of rescheduling, legal chaos continues to intensify after Congress moved to close the hemp loophole. The new language, set to take effect next October, has many hemp beverage and edible companies scrambling for a Plan B. While the intent was to rein in intoxicating cannabinoids like THCV, the bill’s structure sweeps far wider.

CBD isolate manufacturers, while not intoxicating, may be collateral damage since extracting CBD can temporarily spike THC levels. “When you pull the CBD out, you can have some hot hemp and the THC content spikes up, so that immediately makes it illegal,” says Jason Adelstone, an attorney with Harris Sliwoski. “That’s obviously going to cut down on the people willing to take the risk and will have a cooling effect on the number of CBD products in the marketplace.”

While the new hemp bill may have closed one loophole, it may have left one open, says Adelstone. While it declares that any hemp or marijuana seed testing above 0.3 percent THC is now illegal, Congress did not include tissue cultures or clones that test at or below the 0.3 percent threshold. Jason explained that this omission is significant: “The fact that they didn’t include tissue cultures and clones, which are traded on the market widely right now, provides the legal argument that Congress intended to keep that legal, presenting a legal avenue they didn’t have a week ago.”

This means companies can continue shipping tissue cultures and clones across state lines and even internationally, provided they comply with USDA phytosanitary requirements and the importing country’s plant health laws. Jason clarified that this ability to ship was not newly created but reaffirmed: “Under the 2018 Farm Bill, the definition of hemp already made all of that legal. Even though they will grow into marijuana, the material being shipped is 0.3 percent THC or less. All seeds are going to be that, and tissue cultures and clones are shipped before they grow into the plant.” The new bill reinforces that interpretation by explicitly targeting seeds while leaving these other forms of plant material untouched.

Additionally, tissue cultures are far more popular than seeds when you’re trying to maintain quality for medical programs. When you’re shipping to a medical program overseas, you’ll be able to control the quality better than a seed, because with a seed, you don’t exactly know what it’s going to grow into. “So, I think this is a very significant part of the loophole that wasn’t closed,” adds Adelstone.

Even though the new bill firmly shut the door on beverages and edibles, it set a 04% limit on THC per container for the first time, opening yet another loophole. This may push beverages into a powder format, allowing consumers to choose a 4-, 8-, or whatever-milligram dose based on their preferences.

Another notable omission from the revised 2018 Farm Bill is the cannabis plant’s stalks. While hemp and marijuana each have their own regulatory frameworks, which continue to be diluted and blurred over time, the original legal definition of marijuana explicitly excludes the stalks of the plant. Although stalks are not ideal for cannabinoid extraction due to their low cannabinoid content, processing them in large volumes of biomass remains feasible. By leaving them out of the legislation, the bill creates a legal opening. “I’m sure a lot of companies are possibly looking into this, because if you grow stalks of a cannabis plant that have, say, 25% THC in the stalks, it’s not controlled under the CSA at all, and there’s possibly an argument there,” says Adelstone.

The Newer Version Of Rescheduling

Now that the hemp loophole has been closed, hemp-derived businesses are subject to the 280E tax rule. Without rescheduling, all hemp operators, including state-legal marijuana businesses, will be treated as producing “marijuana” for tax purposes, which prohibits deductions for business expenses. Beyond the tax implications, Schedule 3 won’t meaningfully change operations for state-legal hemp or marijuana businesses: they still won’t be able to transport products across state lines, which will keep interstate commerce restricted. For DEA-registered entities, however, Schedule 3 could open doors to international trade under medical provisions.

Thailand’s Reversal

Adelstone recently returned from the International Asian Hemp Expo in Bangkok, where he saw how Thailand’s cannabis landscape has shifted since the Ministry of Health issued an order reverting the country to a medical-only framework. Although the order became law once published in Thailand’s official Gazette, enforcement has been inconsistent. After an initial wave of shutdowns targeting illegal operators, the market has largely continued operating in a gray zone. Tourists can easily obtain medical prescriptions or purchase without one despite the medical-only rule.

The core issue, Adelstone explains, is that Thailand descheduled cannabis three years ago without establishing a regulatory system, resulting in an unregulated “Wild West” of untested products, youth-attractive packaging, and widespread public access. The world is watching and hoping that Thailand will pass and implement comprehensive regulations as a blueprint for other Asian nations to follow.

On the medical side, licensed Thai cultivators and manufacturers already comply with GMP, GACP, and Thai FDA requirements, enabling them to export to markets such as Australia. Both Thai-owned and U.S.-backed operators are active in the country, with many foreign-led facilities employing local workers at wages well above typical rates and contributing to local economic development.

Tourism remains another major pressure point. While public consumption is technically prohibited, consumption rooms and private-use spaces are common, and Adelstone believes Thailand’s success depends on maintaining safe, regulated access for visitors. Restricting tourist access, he warns, would only push consumers back into illicit channels.

The future hinges on Thailand’s upcoming election. Prime Minister Anutin, who originally descheduled cannabis as health minister, remains publicly cautious about cannabis despite being labeled the “King of Cannabis,” a title he dislikes. If his party retains power, the industry is optimistic that long-awaited regulations could finally pass, paving the way for a stable medical framework, continued exports, and a regulated tourist-access model. Given Thailand’s economic needs, a well-structured cannabis industry could be a meaningful driver of growth if the government regulates it.

The DEA Path to International Markets

Adelstone says it would be strategically smart for larger cannabis companies to pursue DEA registrations in preparation for international trade —even though obtaining one is notoriously difficult. Only about seven exist today, and many registrants aren’t actively producing cannabis because there’s currently little financial incentive in research. Still, holding a DEA license could position companies to participate in the international medical cannabis market and prepare for a future federal framework.

According to Adelstone, a pro-cannabis administration could dramatically expand opportunities without Congress needing to take action. Under broad executive authority, a president could direct the DEA to approve additional applicants, allow interstate transport among DEA registrants, and enable the FDA to permit botanical prescriptions, effectively creating a national medical market by executive action alone. That’s why he believes MSOs should consider acquiring an existing registration or buying their way into the application queue now, before policy shifts create a surge in demand.

The Supply Chain Liability Squeeze

Product recalls tied to terpene loss, mold, and potency degradation are rising, and the industry is now confronting the looming question of who is liable when cannabis quality deteriorates after it leaves the manufacturer. Cannabis is as temperature-sensitive as produce and can degrade quickly if not kept below roughly 70 degrees. Some brands caught up in a recall have argued that their products left the warehouse in perfect condition, only to arrive at retail compromised, raising the possibility that improper storage, transportation, or packaging caused the damage. Similar disputes have emerged around “preservation” packaging technologies.

According to Adelstone, every link in the supply chain can be pulled into a product liability claim, and manufacturers will likely bear the initial costly burden of proving where the failure occurred in the process. As recalls grow more common, the lack of a consistent cold-chain-style infrastructure from warehouse to retail should be a red flag for the industry.

Adelstone emphasized the need for regulated markets to make sure contaminated products are caught and recalled. In an unregulated system, he said, those same products would end up in consumers’ hands. The current recalls, though disruptive, show the system working—now the industry must determine who is responsible when temperature, handling, or packaging failures cause product loss.

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