Hemp plant at a farm in Minnesota. (Photo by Baylor Spears)

When Jacob Diener first heard that the status of hemp could be reviewed, he wasn’t too concerned. With his company, A Good Plug, the 32-year-old expected to continue producing small batch hemp products like gummies, brownies, and cheesecakes. 

“It seems around this time it happens every year that they want to re-assess the Farm Bill,” Diener told the Wisconsin Examiner. But 2025 was different and Diener, like others across the industry, was caught off guard when what amounted to a prohibition on his livelihood was discreetly attached to a deal to end the longest government shutdown in U.S. history. “It’s just weird and scary,” he said. 

Hemp businesses were allowed to flourish after the passage of the 2018 Farm Bill, which legalized the production and distribution of hemp products with no more than 0.3% THC on a dry weight basis. But under new rules that were included in the stopgap spending bill ending the federal government shutdown last week, products must contain no more than 0.4 milligrams of THC per container. 

Steve Hampton, owner of the Eau Claire-based company Steve’s Hemp, says that standard is biologically impossible to meet. “[The] hemp plant struggles to grow to meet that guideline before it’s even harvested,” Hampton told the Wisconsin Examiner. “So, we’re seeing upwards to 99% of the industry get wiped out from this.” 

THC is the primary psychoactive compound in the cannabis plant. Although hemp and the psychoactive variety commonly known as marijuana are the same plant species, they have different chemical compositions. Many cannabis varieties are cultivated with high levels of THC for markets in states where the plant has been legalized medical or recreational. 

Hemp, with far lower concentrations of THC, is mostly used for rope, paper and industrial products. It is also offered in states that do not have legal cannabis markets as an alternative — a source for  products containing delta-9 THC, THCa, THCp and other derivatives. 

The law reopening the government, however, effectively bans those products and gives the industry until next November to adapt or fizzle out. Erin Kelly, owner of the Wauwatosa-based hemp goods store Kelly’s Greens, told TMJ4 that even CBD products contain trace amounts of THC which make them effective medicine, and that the new rules would render that medicine ineffective. Wisconsin’s hemp industry is estimated to be valued at $700 million and accounts for at least 3,500 jobs, according to the Wisconsin State Journal. 

“Everybody’s frantic, you know, we’re all worried,” Hampton told the Examiner. Without an amendment to the new rules or legislative intervention, Hampton says the nation’s $28.4 billion hemp industry won’t survive, and that most of his own store’s inventory would be banned. 

More than just a cash crop

When he was a teenager in Fond du Lac, Diener was introduced to cannabis through his grandmother, who used it to manage her pain and chronic illnesses. He began using it to help with his stress and the early signs of Crohn’s disease he was experiencing

After years of working in the restaurant industry, Diener realized he wanted more out of life. “And so I started to get permission from my chef to start making candy in the kitchen behind the scenes, just learning the basics, but with the intentions that I wanted to make infused candy, gummy worms, stuff like that,” he said. “Stuff that I didn’t see on the market at the time.”

Hampton also became involved in hemp after experiencing the medicinal value of the plant. “I was a college student at the time,” he said, “and was looking for some relief with some back pain, some sore muscles from the gym. And my dad had actually bought me some CBD oil to test out for my birthday. And it was from a local farm up here in northern Wisconsin. That helped me a ton with what I needed it for.” 

Hampton realized that there were not many such products marketed to younger people like him. He grew his business online before opening a storefront during Small Business Week in 2021. Today Hampton, 29, owns and operates his business alongside his wife and five employees. People of all ages come into his store. “In-store, we have a lot of customers who come in just looking for relief,” he said. Many of the customers are seeking a remedy for anxiety, as well as “a large handful of customers that have chronic pain,” he said. 

Steve’s Hemp carries flowers, vapes, gummies, candies, topical ointments and other products. Diener, who specializes in culinary cannabis products, makes everything from Nerds-covered gummies (a popular product he calls “Stoney Bites”) to other sweets. Diener describes his customers as “such a community of oddballs and people who have unique personalities. And that’s what I’ve always hoped for, and that’s kind of what I come from and who I am a person. People authentic to themselves.” 

The cost of  prohibition

Before the federal ban on THC-derived hemp products was added to the bill to reopen the government, Republican lawmakers in Wisconsin were already working on bills to restrict or prohibit the industry in the state. Representatives Lindee Brill (R-Sheboygan Falls), Jim Piwowarczyk (R-Hubertus) and others introduced what they called “a common-sense corrective bill” to close the “loophole” that allowed what they called “dangerous, psychoactive THC-laced products to proliferate in Wisconsin.” 

The lawmakers pointed to health advisory warnings issued by federal agencies about the use of delta-9 THC, and issues with unregulated markets across the country. In Wisconsin, hemp products from CBD to delta-9, HHH, THCa, and others can either be found at dispensaries where employees are often knowledgeable about their products, or at gas stations and smoke shops where customers don’t receive information and guidance. Wisconsin lawmakers have raised an alarm about emergency room visits and poison center calls linked to delta-8 THC and similar compounds, as well as concerns that children could easily purchase the products. 

Hemp business owners say they often applaud common sense regulation. They also support fully legalizing cannabis in Wisconsin —  ending prohibition. To address concerns about health consequences and children’s access to cannabis, “what would really help that is regulation, not prohibition,” Hampton said.

Everything from clear packaging guidelines to age restrictions, lab testing and education about where the product comes from and what it does could be part of a legal regulatory structure, Hampton argued. Rather than allowing any gas station to carry hemp products, Hampton would like to see licensed facilities staffed by people who care about what they’re doing. “Our main goal with this business was to educate our customers, and know what’s in our product, and recommend what would work best for our customer,” he said. 

One 2024 study analyzing national poison data systems found that between 2021 and 2022, reports of exposure to delta-8 THC increased by 79%. The study also found that poison center calls for delta-8 were significantly lower in places where either delta-THC was banned, or where cannabis use was already legalized. “Consistent regulation of delta-THC across all states should be adopted,” the study recommended. Other poison center data shows that since 2022, exposures to delta-8 THC have plummeted, a trend which has continued into 2025. 

Prohibition also creates economic stagnation,  advocates contend. Tim Frey, of Ignite Dispensary and Cigar calls it “Wisconsin’s half a billion dollar loss.”

Frey lobbied against state Republican bills to restrict hemp, and he argues that hundreds of millions are essentially handed over to Michigan and Illinois every year when Wisconsinites make the sometimes difficult decision to travel across state lines to obtain cannabis. 

“Now that Minnesota is opening up, with the largest border, we’re probably going to be losing approximately up to $200 million,” Frey told Wisconsin Examiner. “And then if they came up with a small tax on hemp-derived stuff, that’s easily $100 million there, if not more, give or take. So it’s going to be around half a billion dollars that Wisconsin could use to give to law enforcement, get fentanyl off our streets, reduce property taxes, invest in roads” and other uses. 

Hampton fears that now customers will go to the black market or risk being pulled over after driving to a neighboring state. “I just don’t understand why they thought that prohibition would be the right answer,” he said. 

As some Wisconsin legislators are working to enact a new prohibition on hemp products, others are trying to legalize medicinal THC cannabis in the state. Earlier this year, two-thirds of registered voters polled by Marquette Law School said that cannabis should be legalized in Wisconsin. Meanwhile, Republican lawmakers have introduced what would be one of the country’s most restrictive medicinal cannabis programs. 

Frey is cautious of the medical-cannabis-only approach, however, “because it’s very hard to qualify with some ailments,” he told the Wisconsin Examiner. He added that if Wisconsin passed a restrictive medical cannabis program, then it would open the door for the state’s indigenous tribal communities, as sovereign nations, to open their own recreational programs. “So then we would be a recreational state without the control, or the revenue,” he said.  

Diener said that when conservative lawmakers talk about cannabis, they sound at least 10 years behind the times. “I think that right now there’s such extreme viewpoints on it that are outdated, and really just don’t line up with today’s market or today’s values with the plant,” he said.

Frey believes that it’s past time Wisconsin had a serious discussion about legalization. “Limit the licenses,” he declared. “Control this, tax it, get licenses out there to responsible people that are going to do things the right way —  that card people, that do truth-in labeling, that care about the quality of their products.”

In addition to strict regulation, Diener said parents can protect their children from hemp products instead of the government banning them. “You have the responsibility just the same as if you have a gun in the home to keep your things in a safe space that your children cannot access,” Diener said. “You wouldn’t have your alcohol bottle sitting just, like, within reach or in a cupboard that your kids know they can access. Even growing up as a teen, when my mom knew that I was starting to go to parties and stuff, she would start to hide her alcohol.” 

After the federal hemp laws were changed, Piwowarczyk, in a television interview, said unsympathetically of hemp business owners that “you guys took a gamble when you decided to open up your hemp business.” 

Hampton counters that lawmakers like Piwowarczyk should “open their eyes, and look around, and actually meet with the constituents of their districts” who are the consumers driving the industry. 

Uneasy months ahead

For now, hemp distributors and their allies have until next November to adjust to the new federal restrictions. Frey said Wisconsin could provide some protection for the industry by enacting its own regulations for hemp products, similar to the way states have legalized cannabis industries despite the ongoing federal prohibition. 

There are already state-level legislative responses in the works, he said. One bill, AB 503, would redefine the definition of hemp to prohibit THC-derived products. Another, AB 606, would add hemp to the responsibilities of the agency in the Department of Revenue that regulates alcohol. A bill authored by Senate Democrats, SB 644, would create a regulated framework and age limits for hemp products, though it lacks Republican co-sponsors. Sen. Patrick Testin (R-Stevens Point) is circulating a draft bill for co-sponsorship that also regulates hemp products. 

“That bill is probably the best, most common-sense written bill that I’ve seen,” Frey told the Wisconsin Examiner. While the Democratic bill would be promising, he said, he thinks it won’t gain Republican support. 

“It’s more crucial to protect this industry in Wisconsin than it is to craft the most perfect bill,” said Frey, adding that he thinks the hemp industry will get behind Testin’s bill “full force”. 

At the same time, however, Frey wonders whether the federal regulations will change by next November. He points out that the new law gives the industry a year to adapt instead of imposing a ban immediately. 

Frey thinks that if Wisconsin passes hemp regulations but the federal laws remain the same, then the hemp industry would risk losing its federal task deductions and also lose the ability to conduct interstate commerce. 

If there is no change to save the hemp industry, a cascade of effects will ripple out. Earlier this year, Hampton  opened a new manufacturing facility just down the street from the Steve’s Hemp storefront. In the middle of next year, he will likely have to close that as well, he said. 

Once the new law takes effect, “our hands are pretty much tied,” said Hampton. “My wife and I will have to find new jobs for each other, continue to make ends meet. And then those families that work for us — those employees that work for us — will have to do the same.” Until then, Diener said, “I am going to continue to serve the people who need us the most and work to continue growing this dream and keeping this dream alive.” 

Hampton and his employees “are obsessed and passionate about this industry,” Hampton said. “We started this industry with hopes to run a legal dispensary out of Wisconsin, and hopefully transition into that. Now that plan is crushed. And so we don’t know what we’re going to do. We’re just going to try to keep our hopes up, and try to fight as much as we can to keep [hemp] legal, and if that isn’t possible, get recreational cannabis pushed through the state of Wisconsin.”

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