The Legality of THC and Hemp Products in 2026: A Cloud of Uncertainty*
The legal landscape for hemp-derived THC products is changing rapidly. At the federal level, Congress has enacted a dramatically narrower definition of lawful hemp that is scheduled to take effect on November 12, 2026. North Carolina legislators are considering whether to adopt an extremely restrictive new bill surrounding hemp, while Virginia, South Carolina, and Tennessee are pursuing substantially different approaches themselves.
For businesses that manufacture, distribute, or sell hemp-derived products, the central trend is clear: lawmakers in the Southeast are moving away from rules focused only on a product’s percentage of delta-9 THC and toward rules based on total THC, milligrams per package, production methods, and product type.
At the Federal Level
Congress enacted Public Law 119-37 on November 12, 2025. Section 781 of that law was on the path to becoming effective 365 days later, on November 12, 2026, however Congress has been in a battle to postpone the effectiveness of that law until December 2026 as part of the next spending bill. Nonetheless, a form of impending legislation will eventually happen, making two particularly significant changes:
First, the federal definition of hemp will be based on total tetrahydrocannabinols, including tetrahydrocannabinolic acid, or THCA. Hemp must contain no more than 0.3% total THC on a dry-weight basis. This replaces the prior statutory focus on delta-9 THC alone.
Second, certain finished cannabinoid products will be excluded from the federal definition of hemp even when their percentage concentration would otherwise fall below 0.3%. A final hemp-derived cannabinoid product will not qualify as hemp if it contains:
A cannabinoid that cannot be produced naturally by the cannabis plant;
A naturally occurring cannabinoid that was synthesized or manufactured outside the plant; or
More than 0.4 milligrams combined total per container of total THC, including THCA, together with other cannabinoids determined to have THC-like effects.
For this purpose, the relevant “container” is generally the innermost retail packaging containing the product.
The 0.4-milligram limit is not a per-serving limit. It applies to the entire retail container. As a result, many products currently marketed as federally lawful hemp (including gummies, beverages, tinctures, flower, concentrates, and some full-spectrum CBD products) may no longer fit within the federal definition of hemp by the end of 2026.
The change may affect more than products traditionally marketed as “intoxicating.” A product containing naturally occurring trace amounts of THC could exceed 0.4 milligrams when the THC in the entire package is added together. Businesses should therefore review laboratory reports and product formulations on a per-container basis, rather than relying solely on the familiar 0.3% dry-weight calculation.
Several bills have been introduced in Congress to repeal or delay Section 781. These include the American Hemp Protection Act and multiple “Hemp Planting Predictability Act” proposals. As of August 4, 2026, however, those measures remain introduced bills and have not displaced the November 12 effective date.
Businesses should therefore prepare for the enacted law while continuing to monitor Congress. Planning around the possibility of a future delay, without preparing for the law currently scheduled to take effect, would carry substantial inventory and compliance risk.
Below is a snapshot of the current landscape throughout the Southeast:
North Carolina: House Bill 328 Remains Pending
North Carolina has had its own rollercoaster of Hemp legislation over the last several months. House Bill 328, titled “Regulate Hemp-Derived Consumables,” was put forth by legislators in early July, and has been received poorly amongst local small businesses, lobbyists, and constituents who support the legalization of hemp alike.
The State Senate adopted a conference report on July 2, 2026, by a vote of 37-6. The conference report was subsequently reported to the House on July 30, and the bill was re-referred to the House Rules, Calendar, and Operations Committee. The House did not adopt the conference report.
The proposed conference substitute would align North Carolina’s definition of hemp with the new federal total-THC approach. It would calculate total THC by adding:
Delta-9 THC;
87.7% of the product’s THCA concentration; and
Other tetrahydrocannabinols, expressly including delta-7, delta-8, and delta-10 THC.
The proposal would also exclude synthetic or chemically converted cannabinoids from the definition of lawful hemp.
A “prohibited finished hemp-derived consumable product” would include a product intended for ingestion or inhalation that contains either:
More than 0.4 milligrams of total THC in the innermost retail container; or
Any synthetic or chemically converted cannabinoid.
The proposal would add such products to Schedule VI of the North Carolina Controlled Substances Act. The pending conference proposal would also make it unlawful to knowingly sell or deliver a hemp-derived consumable product to anyone under 21. It would separately prohibit a person under 21 from possessing such a product.
The current proposal includes criminal penalties and escalating civil penalties. Selling a product that meets the proposal’s definition of a “prohibited finished hemp-derived consumable product” could carry substantially higher penalties, beginning at $10,000 for a first violation and increasing to as much as $50,000 for repeat violations.
The draft states that its age provisions would become effective July 15, 2026. (Because H.B. 328 was not enacted by that date and remains pending the inclusion of that date in the conference proposal did not independently make the restrictions law.)
H.B. 328 is significant and should be monitored closely. The proposal is now delayed further until December of 2026 for legislators to go back to the drawing board to find a more agreeable form of regulation for the old North State.
At the same time, the proposal shows where a substantial portion of the General Assembly appears to be heading: a total-THC standard, restrictions on converted cannabinoids, and stronger penalties for sales involving prohibited products or underage customers.
Virginia: A Two-Milligram Package Limit Takes Effect August 15
Virginia already imposes one of the region’s strictest limits on retail hemp extracts.
Until August 15, 2026, a retail industrial hemp extract must contain no more than 0.3% total THC and must satisfy one of two alternatives:
No more than two milligrams of total THC per package; or
At least 25 times as much CBD as total THC.
Effective August 15, 2026, Virginia eliminates the 25-to-1 CBD alternative. A retail industrial hemp extract must then satisfy both requirements: no more than 0.3% total THC and no more than two milligrams of total THC in the entire package.
Virginia also enacted S.B. 543, identified as “Marijuana and hemp products; enforcement,” as Chapter 1016 of the 2026 Acts of Assembly. The measure strengthens the Commonwealth’s enforcement framework surrounding unlawful marijuana and hemp-product activity.
Separately, Governor Abigail Spanberger vetoed H.B. 642 and S.B. 542, which would have created a regulated adult-use cannabis retail marketplace. Virginia therefore did not establish the proposed recreational retail system during the 2026 legislative cycle.
For hemp businesses, the most immediate Virginia deadline is August 15. Products relying on the existing 25-to-1 CBD ratio exception may no longer qualify for retail sale after that date.
South Carolina: Major Reform Remains Unresolved
South Carolina considered several competing hemp proposals during the 2025-2026 session, but none of the principal comprehensive measures discussed below has become law.
H. 3924 progressed the furthest. The Senate adopted a conference report on June 25, 2026, by a vote of 27-11, but the House rejected the same report by a vote of 28-69. The legislation therefore did not complete passage.
Versions of H. 3924 considered during the legislative process included a 0.4-milligram total-THC-per-container standard, restrictions on synthetic cannabinoids, age limitations, and significant restrictions on various forms of consumable hemp. Because the chambers did not agree on a final bill, those proposals should not be treated as enacted requirements.
H. 4758 represented a broad restrictive approach to consumable hemp products. After repeated debate delays, it was recommitted to the House Judiciary Committee on April 23, 2026.
H. 4759 proposed a more targeted framework under which most intoxicating consumable hemp products would be prohibited while certain hemp-derived delta-9 beverages could be licensed and regulated. The House amended and recommitted the bill on February 4, 2026, and it did not reach enactment.
The South Carolina takeaway is therefore continued uncertainty. Legislators have considered options ranging from broad prohibition to a beverage-specific regulatory carveout, but the General Assembly has not settled on a comprehensive statewide framework.
Tennessee: A Near Total Ban is Now in Effect
Tennessee has taken a different approach by placing hemp-derived cannabinoid products within a detailed licensing and distribution structure administered by the Tennessee Alcoholic Beverage Commission, or TABC.
TABC’s regulatory authority began on January 1, 2026. Businesses operating under legacy Tennessee Department of Agriculture licenses could continue doing so through June 30, 2026, but they were required to obtain a TABC license to operate after that date.
Beginning July 1, 2026, Tennessee’s hemp-derived cannabinoid market effectively shifted into a near-total THC prohibition framework under the state’s Alcoholic Beverage Commission (TABC) rules and enforcement structure. While the statute does not use the phrase “ban,” the combined effect of the licensing rules, product definitions, and enforcement guidance is that only non-intoxicating trace-level hemp products remain practically lawful for retail sale.
As a result, while Tennessee still maintains a hemp regulatory structure on paper, the post-July 1, 2026 framework functions in practice as a highly restrictive system limited to non-intoxicating hemp products with negligible THC content.
Conclusion
The regional market is moving toward stricter product-level regulations, but the states are not moving in complete alignment. Federal law is scheduled to impose a 0.4-milligram-per-container standard by the end of 2026. North Carolina is working on its own version of a total-THC ban, but local voices are making a difference in how that will actually look. Virginia is enforcing a two-milligram package limit, Tennessee has implemented an alcohol-style licensing system, and South Carolina remains divided over whether to prohibit most intoxicating products or preserve a regulated beverage category. One thing is certain, THC laws all across the country are evolving each week, and in all different ways, and it is important to stay vigilant and up to date on the laws that affect you and your business.
*This blog post is for informational purposes only and does not constitute legal advice. The status of pending legislation and administrative guidance can change quickly. If you are interested in seeking legal counsel for your business, please reach out to Allen Stahl + Kilbourne at (828) 254-4778.
