The Farm Bill 2025: What the New Legislation Means for Hemp and CBD

The Farm Bill renewal process occurs every five years, and 2025 marks another pivotal moment for American agriculture. For the hemp and CBD industry, this legislative cycle carries particular weight as stakeholders await clarity on regulations that have shaped the market since hemp's federal legalization in 2018.

The previous Farm Bill transformed the hemp landscape by removing hemp from the Controlled Substances Act and establishing a framework for cultivation and commerce. Now, as Congress prepares the 2025 version, industry participants are closely watching for amendments that could further define hemp's place in American agriculture and commerce.

Understanding what lies ahead requires examining current challenges, proposed changes, and potential impacts on everyone from farmers to consumers in the rapidly evolving hemp and CBD marketplace.

Current State of Hemp Under Federal Law

The 2018 Farm Bill created the legal foundation for hemp cultivation by defining hemp as cannabis containing less than 0.3% delta-9 THC on a dry weight basis. This distinction separated hemp from marijuana under federal law, opening doors for agricultural production and commercial applications.

Under current regulations, hemp cultivation requires state approval and adherence to USDA guidelines. States must submit plans for hemp production programs, including licensing requirements, testing protocols, and disposal procedures for non-compliant crops. The USDA oversees these state programs and maintains direct oversight in states without approved plans.

The legislation also established pathways for hemp-derived products to enter various markets, though regulatory gaps have created ongoing uncertainty. The FDA maintains authority over hemp-derived products intended for human or animal consumption, while other agencies oversee different aspects of the hemp supply chain.

Key Proposed Changes for 2025

Several significant modifications are under consideration for the 2025 Farm Bill that could reshape the hemp industry landscape.

Regulatory Streamlining

Proposed changes include simplifying licensing procedures for hemp farmers and reducing bureaucratic barriers that currently slow market entry. These modifications could make hemp farming more accessible to smaller operations and reduce compliance costs across the industry.

The streamlining efforts may also address testing requirements, which currently require expensive and time-sensitive THC testing that can create financial hardships for farmers. Proposed alternatives include less frequent testing or modified testing windows that provide greater flexibility.

Interstate Commerce Protections

The 2025 Farm Bill may include stronger protections for interstate hemp commerce, addressing current challenges where state-level restrictions create barriers to product movement across state lines. These protections could establish clearer federal preemption over state restrictions that conflict with federal hemp legalization.

Enhanced interstate commerce provisions would benefit processors, manufacturers, and retailers by creating more predictable supply chains and reducing legal uncertainties that currently complicate business operations.

Research Expansion

Proposed legislation includes provisions for expanded hemp research, potentially increasing federal funding for studies on hemp genetics, cultivation techniques, and product applications. This research focus could accelerate innovation and help establish evidence-based best practices for the industry.

Research expansion may also address knowledge gaps around hemp's environmental benefits, including its potential for carbon sequestration and soil remediation, which could position hemp as part of broader climate initiatives.

Impact on Hemp Farmers

Hemp farmers stand to gain significantly from proposed 2025 Farm Bill changes, particularly through reduced regulatory burdens and improved market access.

Simplified licensing could lower barriers to entry for new farmers while reducing ongoing compliance costs for existing operations. Current licensing requirements often involve lengthy approval processes and substantial paperwork, creating challenges especially for smaller farming operations.

Modified testing requirements could address one of farmers' most significant concerns: crop loss due to THC levels exceeding the 0.3% threshold. Current "hot" crop disposal requirements have created substantial financial losses for farmers whose crops test above the limit, often due to factors beyond their control such as weather stress or natural genetic variation.

Enhanced interstate commerce protections would provide farmers with broader market access, potentially increasing demand for their crops and improving price stability. Currently, varying state regulations can limit where farmers can sell their products, constraining market opportunities.

CBD Industry Implications

The CBD industry faces unique considerations as the 2025 Farm Bill takes shape, particularly regarding regulatory clarity and market access.

Current FDA oversight of CBD products has created a complex regulatory environment where CBD's legal status under the Farm Bill conflicts with FDA restrictions on CBD in food and dietary supplements. The 2025 Farm Bill may address these conflicts by providing clearer regulatory pathways or establishing new oversight frameworks.

Industry stakeholders hope for provisions that would create consistent national standards for CBD products, potentially reducing the current patchwork of state regulations that create compliance challenges for multi-state businesses.

Enhanced research provisions could benefit the CBD industry by supporting studies on safety, efficacy, and optimal usage guidelines. This research could provide the scientific foundation needed for broader FDA acceptance of CBD products in various categories.

Economic Considerations

The hemp and CBD industry has generated significant economic activity since 2018, and the 2025 Farm Bill changes could amplify this growth.

Reduced regulatory barriers could lower operational costs for businesses throughout the supply chain, from farmers to retailers. These cost reductions might translate into improved profitability and expanded market participation.

Enhanced interstate commerce could create larger, more efficient markets that benefit consumers through increased competition and product availability. This could also support industry consolidation and the development of larger, more stable businesses.

Research investments included in the Farm Bill could drive innovation and product development, potentially opening new market segments and applications for hemp and CBD products.

Challenges and Concerns

Despite potential benefits, several challenges remain as the 2025 Farm Bill takes shape.

Regulatory uncertainty continues to affect business planning and investment decisions. Until final legislation passes and implementing regulations are established, businesses must navigate continued ambiguity around long-term regulatory direction.

State-federal conflicts may persist even with enhanced federal protections, as states maintain significant authority over agriculture and commerce within their borders. Resolving these conflicts requires careful balance between federal oversight and state sovereignty.

Banking and financial services remain problematic for hemp and CBD businesses, as many financial institutions maintain restrictive policies despite federal legalization. The Farm Bill alone may not resolve these challenges without complementary financial regulatory changes.

Preparing for Changes Ahead

As the 2025 Farm Bill progresses through Congress, industry participants should monitor developments and prepare for potential changes.

Farmers should stay informed about proposed licensing and testing modifications that could affect their operations. Understanding these changes early can help with planning decisions around crop selection, compliance procedures, and business expansion.

CBD businesses should track regulatory developments that could affect product categories, marketing claims, and interstate commerce. Preparation may include adjusting business models to take advantage of new opportunities or comply with modified requirements.

Industry organizations and stakeholders should continue engaging in the legislative process through public comments, industry testimony, and coordination with congressional representatives to ensure industry perspectives inform final legislation.

The 2025 Farm Bill represents a critical opportunity to build upon the foundation established in 2018 and address ongoing challenges that have limited the hemp and CBD industry's full potential. While the final legislation remains under development, early indications suggest meaningful improvements that could benefit farmers, businesses, and consumers throughout the hemp value chain.