Hemp ban chills prospects for progress on cannabis banking

OG article by Ebrima Santos Sanneh

December 4, 2025

A bipartisan provision in recent U.S. government funding legislation, effective November 2026, prohibits most intoxicating hemp-derived products, upending the 2018 Farm Bill's 0.3% delta-9 THC threshold and criminalizing variants like delta-8, delta-10, THCA, and full-spectrum CBD with trace THC. Championed by Sen. Mitch McConnell, the measure secured 76 Senate votes, influenced by lobbies such as the bourbon sector fearing competition. Critics from the U.S. Hemp Roundtable decry it as catastrophic for a $30 billion industry generating $1.5 billion in taxes and 300,000 jobs, predicting widespread business closures and supply chain disruptions. For cannabis banking reform, the ban paradoxically aids state-legal marijuana operators by curbing unregulated hemp rivals, potentially streamlining federal focus—yet it erodes revenue streams for banks serving hemp clients. Rescheduling cannabis from Schedule I seems unlikely before 2029, sidelined by DEA leadership shifts prioritizing other substances. Analysts view this as a conservative backlash signaling stalled momentum for broader legalization, including SAFE Banking Act passage, amid election-year politics. While some operators see opportunity in consolidated markets, the policy reinforces fragmented regulations, deterring investment and innovation. Stakeholders urge targeted advocacy to mitigate economic fallout and revive stalled banking dialogues.