Is “Hemp” the Way?
Cannabis is in a state of chaos and existential self-reflection. All hopes were pinned on the Biden Administration moving the needle in some fashion, only to be completely sideswiped by the hemp industry. It’s caused funds like Navy Capital and large operators like Gold Flora to call it quits, with more and more closings on the horizon.
Hemp, on the other hand, is “living cannabis’s dream,” as insiders on X have been buzzing. What they mean is that hemp gets to enjoy the benefits of tax deductions, banking, advertising, interstate commerce, and low regulations. It is the dream, indeed—but is it sustainable?
The Farm Bill That Changed Everything
In 2018, Congress passed legislation that legalized “hemp” as long as it tested below 0.3% delta-9 THC on a dry weight basis. CBD tinctures and a slew of products hit the shelves, and there was a modest pop followed by a crash in 2019.
The market then began exploring synthesized cannabinoids found in trace amounts, like delta-8, which carries mild psychoactive effects. Then came products like HHC, THCp, and THC-O, synthesized through the conversion of CBD via isomerization—a chemical process that rearranges its molecular structure. From 2020 to 2022, these cannabinoids made up the majority of the $2.8 billion national market.
That all changed when THCa hit the scene.
THCa and the Rise of “Legal Weed”
For the uninitiated, THCa is the chemical acid that precedes THC. It’s non-psychoactive in its base form but converts to THC when heated through decarboxylation (the internet’s favorite word). At first, THCa was harvested early to ensure the plant didn’t “test hot”—that is, above 0.3% THC. The buds looked appealing, but taste and effect were lackluster.
Over time, the industry figured out how to prevent THCa from converting post-harvest or, in many cases, simply stopped worrying about it (however ill-advised). By refining curing techniques and focusing on high-THCa cultivation, hemp growers unlocked a product that’s simply natural, raw cannabis flower—potent, flavorful, and legally shippable.
Now, in 2025, the hemp industry has ballooned into a multi-billion dollar sector, employing hundreds of thousands and displacing both the illicit and state-regulated markets. State-regulated operators are scrapping to survive, while hemp operators are nervously eyeing potential shutdowns from state and federal authorities.
The State Response—and the Federal Silence
So, how likely is state intervention? Take California: legal cannabis tax revenue fell 27% between 2021 and 2024 due to hemp product competition. Quarterly revenues dropped from $361 million to $263 million.
The disparity between state-regulated cannabis companies and hemp operators comes down to taxes. Legal operators face effective tax rates as high as 70% under IRS Section 280E, while hemp businesses can claim standard deductions. Todd Harrison calls this “the height of hypocrisy.”
Politics also play a role. Lawmakers often favor simple solutions—and regulating hemp, which is already widespread, is easier than pushing through full cannabis legalization. Even rescheduling cannabis may not help much, given the DEA’s resistance and other federal priorities.
Cannabis remains a stalled vision. Hemp is what that vision looks like when it’s working.
A Regulatory Fork in the Road
Since “hemp” is now mostly just cannabis, we must examine the competing regulatory structures. Do we continue with the fragmented state-by-state rollout, aim for Schedule III and banking access, or adopt a radically different federal approach?
That new path would require bold congressional action and unity—something many advocates and insiders see as a long shot. A year ago, that skepticism made sense. But with today’s hemp regulations, we’ve already crossed the Rubicon.
We have a thriving market but still lack quality controls. Without standardized testing, bad actors will drag the good down, and consumers will pay the price.
The Risks of an Unregulated Boom
This unregulated hemp boom also raises red flags with semi-synthetic isomers. We don’t have enough long-term data on compounds like delta-8 or THC-O to determine their safety.
Research is ramping up. The University of Mississippi’s National Center for Cannabis Research is studying delta-8’s effects on pain and anxiety. The University of Buffalo’s 2024 survey tracks user experience with delta-8 versus delta-9. UCLA is exploring delta-8’s potential for easing chemotherapy-related nausea. But these studies are in early stages.
Cannabis itself has a long history showing it’s relatively safe. Ban hemp-derived cannabinoids outright, and the illicit market will return—untested, untaxed, unsafe. Semi-synthetic products should go through rigorous evaluation, and their packaging must clearly state what’s inside.
Also Read: Jeff Kober Walks the Thin Blue Line in ‘Grassland’
A Blueprint—If We Get It Right
Hemp isn’t the problem—it’s the preview. It’s shown us that cannabis can thrive in a decentralized system, from West Coast growers dialing in perfect buds to Texas chefs creating gourmet edibles. Consumers are winning.
Full-panel testing, standardized dosing, and clear labeling are obvious next steps. The goal isn’t to tame hemp—it’s to turbocharge it with smart, scalable regulation.
Get this right, and we have a blueprint for a safe, thriving cannabis industry. Get it wrong, and we hand the keys back to the illicit market.
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