Wisconsin THC Businesses Prepare for End to Federal Loophole

Frederica Freyberg:
In other news, Wisconsin is one of just ten states where marijuana is illegal for both medical and recreational use. But since 2018, a federal loophole allowed cannabis products to become an industry worth millions of dollars in the state. That is, until the federal government closed the legal loophole at the end of the government shutdown. “Here & Now” student journalist Elijah Pines tells us how business owners are scrambling before the ban takes effect in November.

Joni Sayers:
We were still planning on growing. We were actually already making adjustments for next year.

Elijah Pines:
Joni and Jeff Sayers were among the first hemp farmers in Wisconsin after the 2018 Farm Bill made hemp legal to grow for industrial use. A technical loophole in the bill invited a new kind of industry to take hold.

Joni Sayers:
A small farm, sustainable crop that would be great to grow.

Elijah Pines:
For the past seven years, the pair have been growing hemp and making it into products containing THC, the chemical that causes a high. They sell gummies, lip balms, tinctures and topicals at the farmers’ market. They just finished this year’s harvest and were about to board a plane when they heard the news. The bill that ended the government shutdown closed the hemp loophole and will soon make their products illegal.

Joni Sayers:
Devastated, right? I mean, it was just — had the wind knocked out of us for a minute. But our first thought was, “Well, we live, eat and breathe hemp. This is our life.”

Elijah Pines:
The 2018 Farm Bill defined hemp as a cannabis plant having less than 0.3% of Delta-9 THC, a specific kind of THC. Since then, Delta-9 derivatives have blossomed into an industry worth billions. The new, stricter rules effectively ban all forms of THC for consumption.

Jeff Sayers:
We upgraded two more new greenhouses last year, and we were debating whether we should do it this year, but I think everything, at this point, will probably be on hold for a few months.

Elijah Pines:
In Wisconsin, it’s estimated hemp is a $700 million industry, providing 3,500 jobs. Businesses like Hemp Haven Farms are now on a one-year countdown before their THC goods are banned and have to figure out what to do next.

Joni Sayers:
We sell our farm.

Jeff Sayers:
I was considering myself semi-retired. Obviously, I take myself out of retirement to go back into building and home remodeling.

Elijah Pines:
Hemp has also expanded into other industries in Wisconsin. Eagle Park has been a staple of Milwaukee’s brewing scene for years. In 2023, the company’s president, Max Borgardt, and his partners decided to make the jump to THC drinks.

Max Borgardt:
We’ve always been pro THC in all industries and we had our customers start asking and, you know, figuring out, are we going to jump into this industry? And it made sense for us to do it at that time.

Elijah Pines:
THC drinks are now a significant chunk of their profit.

Max Borgardt:
It ends up being something like 16% this year. But it’s, you know, it’s nowhere — when we started out, it was a very small percentage. But I think the thing is it’s growing like crazy. It’s growing so fast.

Elijah Pines:
The provision to ban hemp was slipped into the bill that ended the government shutdown. It happened so fast, not everyone heard about it.

Joni Sayers:
We thought, “No, that won’t happen, but not in — not on this federal level, no.”

Jeff Sayers:
And we also didn’t have any idea that it was something that they were going to attach to this, you know, reopening and funding the government bill. But here it is.

Max Borgardt:
It’s billions of dollars on the line, and the public didn’t know, the companies didn’t know, and they did it within two days. So when it went through the Senate, it immediately went to the House. And that window was two days. There’s not enough time to react and not enough time to do anything.

Elijah Pines:
With the new year coming, Borgardt has to figure out what to do if the ban sticks.

Max Borgardt:
Next year it could have been an incredible year for us just because of how the segment has been doing.

Elijah Pines:
Critics consider products with under 0.3% levels of THC to effectively be legal marijuana. In Wisconsin, hemp products are unregulated.

Max Borgardt:
The opportunity for states and the federal government to make tax revenue, they can tax it. I mean, we’re taxed on the alcohol that we produce and the spirits that we produce. There’s an excise tax on those. We welcome an excise tax if that’s what needs to happen to have regulation in place.

Joni Sayers:
We are opposed to a ban obviously. Regulation is, is good, right. There should be an age restriction. There should be truth and accuracy in labeling.

Elijah Pines:
The Sayers worry when everything hemp is off the table; it becomes under the table.

Joni Sayers:
If this happens, the black market will grow. So that is unregulated. So I worry about the safety of products that might be out there that are unregulated.

Elijah Pines:
Both Hemp Haven and Eagle Park have their products tested by labs and sell only to those over 21. Prior to the federal ban, state lawmakers proposed their own bill to close the loophole. Other bills would legalize and regulate THC and hemp, but without new state laws on the books, in one year, the federal ban will take effect. For Wisconsin, time is running out for hemp.

Joni Sayers:
I’ll tell you. I had about three times the online orders this week than I normally do. People are panicking, I’m sure.

Elijah Pines:
Reporting from Deerfield, I’m Elijah Pines for “Here & Now.”