Oregon’s Hemp Industry Faces Crippling Federal and State Obstacles

When Congress passed a major funding bill on Nov. 12, it ended the longest government shutdown in U.S. history. Many Americans, like federal employees and food stamp recipients, breathed out sighs of relief.

But the legislation gave hemp farmers a coughing fit that could lead to full-on lung collapse.

No, it’s not because they’re smoking their own supply. Kentucky Sen. Mitch McConnell jammed a technical ban into the bill that many growers, politicians, and experts consider to be a death sentence for the hemp industry.

The funding bill, H.R. 5371, legally reclassifies hemp in a significant way. The new definition excludes, and thus considers as illegal marijuana, any plant or byproduct containing more than 0.3% total tetrahydrocannabinols (THC compounds that get humans high). Also banned are hemp products containing “greater than 0.4 milligrams combined total per container” of THC and “any other cannabinoids that have similar effects (or are marketed to have similar effects) on humans or animals as [THC].”

Anyone who has ever purchased legal marijuana or hemp knows something McConnell might not: 0.3% THC is a fractional amount, quite literally, and a product with that percentage will not cause intoxication upon consumption. Double that number, triple it, and the fact remains that nobody without some kind of medically anomalous hypersensitivity could feel anything more than mildly relaxed from this “boneless weed” (to use a colloquialism).

The Oregonian quoted a cannabis industry financial analyst, Beau Whitney, as predicting the ban to cause the total demise of “hemp-derived CBD products.” These often come in form of pain relief tonics and edibles that millions cite as lifesaving, with less of a narcotic effect than coffee. Whitney also said “products like protein powders, hemp-derived THC drinks, construction materials, auto parts and textiles” would be affected.

So, it’s another chapter in the age-old story of cannabis growers cursing the federal government, alleging that its policies are heavy-handed and poorly scientifically backed. But local hemp lobbyists planning to square up with McConnell’s GOP better watch out behind them. By God, it’s the State of Oregon with a steel chair!

The Oregon Liquor and Cannabis Commission recently “finalized new hemp product registration rules,” creating a state Hemp Registry that farmers and other sellers must go through. “Consumers will receive needed, clear information about the hemp products that they purchase,” said OLCC Commission Chair Dennis Doherty. “This will include information such as how much CBD and THC is in each serving, thereby increasing trust in the product and the market.”

Registering will cost a $400 fee per distinct product; the Hemp Registry will apply to “all cannabinoid hemp items intended for human or animal consumption or use, such as gummies, beverages, tinctures, capsules, vapes and smokable flower.” Vendors who offer customers a wide variety of choices will be running up much higher bills in 2026, which may cause a chilling market effect.

These new rules officially take effect in January but a “grace period” will delay enforcement til June. “The OLCC is committed to helping Oregon businesses transition smoothly to the Hemp Registry,” said OLCC Director Tara Wasiak. “By giving the industry time to adjust, we can protect consumers without unnecessary disruption.”

Given the combined weight of McConnell’s federal ban and the OLCC restrictions, the local hemp industry is bracing itself for far more than just a “disruption.”

“Every hemp seed in America will have to be destroyed, and 100 percent of the hemp products that are sold will no longer be allowed to be sold,” stated Kentucky Sen. Rand Paul. Oregon Sen. Jeff Merkley spoke similarly: “This will in fact wipe out 95 to 99% of the industry.”

One hemp farm based outside of Medford is preparing for disaster. “Basically, it makes it unclear how we would have a path forward to continue to grow and produce any products,” said Paul Murdoch, co-founder of Horn Creek Hemp.

The farm has been operating since 2016 and touts itself as “the most award-winning CBD company in the U.S.,” but these roadblocks may be too much to overcome.

Murdoch “got into the weeds” to explain. Previously, the 0.3% limit applied just to Delta-9-THC, which is the most well-known cannabinoid found in recreational pot, but not the only THC compound found in the cannabis plant. The new law’s “total limit” encompasses all naturally occurring THC cannabinoids, like THC-A, THC-V, and more, making it “very challenging to grow” plants in compliance, he said. The same goes for the 0.4 milligram limit on products: “We don’t test that low. Very few labs can test to that small level.”

Murdoch said that this was an attempt by Republicans to counter the proliferation of Delta-8, THC-A, and other gas station hemp products that remain popular in weed-illegal states. He referred to companies selling that knock-off pot as “shortsighted, bad faith players who got sucked into the revenue… of course politicians were going to take notice.”

McConnell’s crackdown is bad news for hemp farmers everywhere, but the new OLCC regulations “make it almost impossible to continue in the state of Oregon,” according to Murdoch. “The OLCC laws make it so expensive to license and register products that we may just stop selling here.”

Given the new federal law, though, farms may struggle to sell hemp anywhere. For Horn Creek, state restrictions are a “blow to the gut” and the federal change, which will take effect in November 2026, is “a blow to the head.”

But Murdoch isn’t throwing in the towel. “The bulk of our customers are 40-plus, hard-working voters. CBD is not intoxicating and it’s tremendously helpful,” he shared, crediting the cannabinoid for allowing him, and many of his customers, to manage chronic pain without opioids.

Perhaps without the blow to the gut, a blow to the head will be easier to defend. Murdoch entreated Oregon legislators to “make it feasible for us who are complying, who have always done the right thing, to continue to provide these products,” while crossing his fingers that “cooler heads prevail” federally.

The OLCC did not respond to requests for comment by time of publication.

This article appears in Source Weekly November 27, 2025.