EXCLUSIVE — If the impending ban on U.S. hemp products takes effect as written on Dec. 11, about 68.1% of U.S. hemp-related businesses will fold entirely, according to a new economic report on the hemp cannabinoid industry.
Whitney Economics, a research and consulting group that analyzes hemp and cannabis economics, released a report Tuesday on the current state of the national hemp industry ahead of the December ban on hemp-derived THC products. Congress wrote and approved the hemp-banning language as part of a November 2025 deal to fund the government after the 43-day shutdown. The ban was initially set to take effect on Nov. 11, but Congress recently voted to delay the ban by four weeks as the industry attempts to negotiate a reprieve.
The economic report on the industry released Tuesday indicates that 68.1% of hemp businesses would close entirely after the language goes into effect, while 15.5% of businesses would need to lay off employees, 6.9% would remain in business but with less revenue, and 3.2% would relocate. The report, which Whitney Economics compiled by surveying 496 hemp businesses across 35 states, also estimates that states would lose anywhere from $1.2 billion to $1.5 billion in state tax revenue, while there would be a $46.6 billion to $59.6 billion loss in retail potential.
“Given the high levels of potential business failures and relocations, the economic impact of the current hemp laws, if enacted is rather profound, a reduction of total industry wide revenues by $35.1-$41.3 billion, 29,523-36,744 fewer employers and 188,961-225,861 displaced workers, earning between $7.5-$8.9 billion in wages,” the Whitney Economics report says.
The report offers a more detailed estimate of how the language set to take effect in December will affect American hemp retailers, farmers, and businesses. The main data point that had been thrown around before this report was the hemp industry estimate that between 90% and 95% of current hemp products for sale in the United States would be wiped out by the ban. That estimate was derived from Whitney Economics’s most recent nationwide hemp industry assessment from 2023.
The Whitney Economics report from 2023 had assessed the hemp cannabinoid industry as a $28 billion machine, and that number served as a marker for many reports when the hemp-banning language first passed through Congress in November. Now, in their 2026 report, Whitney Economics has determined the industry to be worth between $30.2 billion and $38.7 billion.
JD McCormick, chairman and founder of American Healthy Alternatives Association, an organization that advocates alternatives to pharmaceuticals and contracted Whitney Economics to complete the report, said the study gives members of Congress “desperately needed” data that will be helpful as the chambers debate hemp-related policy.
“It really does show a very large industry that’s on the brink here,” McCormick said of the report in an interview with the Washington Examiner.
The study also includes state-by-state information about the number of businesses and wages in each state’s hemp industry. The study pings states like Texas, Florida, and California as having the most hemp businesses nationwide.
Hemp industry professionals have argued that the language set to go into effect in December, which sets a limit of 0.4 milligrams of total hemp-derived THC per container, is too stringent a restriction on the hemp cannabinoid industry as a whole. The language, championed by Sen. Mitch McConnell (R-KY), is meant to root out intoxicating hemp products allowed into the market when the 2018 Farm Bill established an initial threshold of hemp products containing no more than 0.3% delta-9 THC, or 3 milligrams per serving.
Lawmakers like McConnell and drug safety advocates have argued that the new 0.4 milligram language established in 2025 would eliminate the public health threat of intoxicating products in accessible places like gas stations and corner stores. Kevin Sabet, president and CEO of Smart Approaches to Marijuana, said in a statement to the Washington Examiner that “the industry’s jobs-and-tax-revenue argument is a false bargain.”
“Whatever governments collect from these products has to be weighed against what taxpayers then spend on emergency-room visits, addiction treatment, impaired-driving crashes, law enforcement, and the broader social costs that come with normalizing another intoxicating industry,” Sabet said.
McCormick said part of what sets the Whitney Economics report apart is that it was peer-reviewed by four people, including professors at universities such as the University of Kentucky and Johnson and Wales University.
“What’s unique with this study, going into what we knew was going to be a really hard fight in D.C., we required that if we were going to be supportive of it, that it be peer-reviewed,” McCormick said.
HEMP BAN DELAYED BY FOUR WEEKS AFTER HOUSE PASSES STOPGAP FUNDING BILL
Now that Congress has voted to push back the ban until Dec. 12, the industry has four more weeks to lobby politicians before the language goes into effect. Major hemp stakeholders have thrown support behind a bipartisan bill introduced by Reps. Andy Barr (R-KY) and Angie Craig (D-MN) that would roll back the November 2025 language while adding different reforms to the industry.
“Small business owners and farmers in Minnesota have built livelihoods around the legal hemp industry. Craft breweries and others have expanded into new markets because it was legal, and to just pull the rug out from underneath folks is wrong,” Craig said in a statement to the Washington Examiner, adding that her bill with Barr “creates a comprehensive federal framework to ensure hemp-derived products are safe and regulated while allowing farmers and businesses to continue to thrive.”