Virginia hemp businesses brace for stricter THC limits
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Illustration: Lindsey Bailey/Axios
When Virginia's new restrictions on THC in hemp products take effect this week, products that retailers have spent three years legally selling under state rules will become illegal overnight.
Why it matters: Virginia says it's closing a loophole that allowed highly intoxicating THC products to proliferate. Retailers say the crackdown could put many of them out of business — and some are asking a court to intervene.
The big picture: Beginning Saturday, hemp products sold in Virginia cannot contain more than 2 milligrams of THC — part of the agreement Gov. Spanberger and state lawmakers hashed out in late June to launch Virginia's recreational marijuana marketplace.
- Under the former 2023 law, hemp products sold or produced in the state could have up to 2 milligrams of THC or 25 times the amount of CBD.
- The new rules eliminate the ratio exception, putting an end to a loophole that Spanberger says allowed highly intoxicating THC products to be widely sold with little oversight.
- The new law doesn't allow for a sell-through or grace period, per the Cannabis Control Authority. And the oversight agency doesn't specify what business owners should do with their inventory.
Zoom in: For Barbara Biddle, president of the Cannabis Small Business Association and owner of District Hemp Botanicals in Manassas, the change means roughly 80% of her inventory will become illegal to sell come Saturday.
- Biddle tells Axios she faces bankruptcy and the loss of her livelihood.
- Her business specializes in CBD & THC wellness products, which she describes as low-dose therapeutic options rather than products for customers "looking to escape and get super high."
- She says her products comply with the state's existing testing and packaging standards, and her business pays the required $1,000 annual registration fee.
Context: More than 900 hemp retail facilities are registered with the state, according to the CCA, which oversees the industry.
Friction point: Seven hemp businesses, including Biddle's, sued Spanberger and other officials late last month to try to block the law from taking effect.
- They argue they spent years building around the 2023 rules, only to get less than two months' notice of changes they say could put them out of business.
- They say they're collectively sitting on millions of dollars of soon-to-be unsellable products.
By the numbers: NOVA Hemp alleges that 85% of its $735,502 in inventory will be illegal under the new law, per the suit.
- Cypress Hemp in Powhatan: 79%, worth roughly $1.44 million.
- Kultivate Wellness in Chesterfield: nearly 98% of its products.
- Redfern Hemp in Caroline: about $270,000 in farm and retail inventory.
Between the lines: The looming recreational marijuana market is central to the retailers' case.
- Their lawsuit alleges Virginia's new hemp rules are aimed less at consumer safety than at limiting competition before legal recreational sales begin July 1, 2027.
What they're saying: "The adult-use cannabis market created in the bipartisan state budget puts Virginia on a path to operating under a safe, legal and well-regulated marketplace," a governor's office spokesperson said in a statement to Axios.
- "Gov. Spanberger remains committed to setting up this retail marketplace in a way that strengthens protections for all consumers, targets the illicit market, and creates a more competitive market for small businesses and producers," it continued.
The intrigue: Virginia created the 25:1 ratio just three years ago as part of its own crackdown on highly intoxicating THC and synthetic products. Now the state says the rule became a loophole itself.
What we're watching: For a ruling in the lawsuit, which was heard Wednesday in federal court in Roanoke. The judge is deliberating after nearly five hours of testimony, WSLS reports.
- The businesses hope it comes before Saturday.