‘Up to us to fix it.’ New federal change could upend KY hemp businesses

The federal government might be ready to reopen its doors but the deal to do so has one Kentucky hemp business owner on edge.

“Mitch McConnell just destroyed our business,” Jim Higdon, co-founder and chief communications officer of Cornbread Hemp, told the Herald-Leader. “... The government just destroyed our business, and that shouldn’t happen.”

As part of the bill to fund the federal government after the longest shutdown in U.S. history, a relatively small provision will ban the sale of hemp derived products that include more than .4 milligrams of THC, usually sold as Delta-8 and Delta-9, beginning in November 2026.

Longtime Kentucky Sen. Mitch McConnell championed the language he said would close a loophole in the 2018 Farm Bill that made the products legal. Sen. Rand Paul opposed the language, as did Republican Reps. James Comer, Thomas Massie, Andy Barr and Democratic Rep. Morgan McGarvey.

Comer and Barr ended up voted for the bill, while Massie and McGarvey voted no.

Higdon projected he’d make $45 million in revenue this year from about 60 acres of hemp, a variety of the cannabis plant that has low levels of THC, the psychoactive compound in marijuana, making it distinct in many places.

Cornbread Hemp sells THC and CBD-infused gummies, drinks and sleep products to roughly 250,000 customers worldwide.

CBD is a compound in cannabis and hemp plants that doesn’t produce the “high” typically associated with marijuana.

Higdon, who founded the business in 2019 with his cousin, said hemp-related policy often follows market pressure and the economy. He understands that and has rolled with the punches.

But this time, “it feels like big government at its worst,” he said.

In February, Cornbread Hemp said it would expand its Louisville operation with a $1 million investment that would add another 50 jobs.

The hope was, in addition to manufacturing and selling more products, Cornbread Hemp would open a tourism destination giving visitors a behind-the-scenes look at the industry that employs more than 3,000 people across the commonwealth and contributes hundreds of millions of dollars to the state’s economy.

The Kentucky Development Finance Authority approved a 10-year incentive agreement under the Kentucky Business Investment program for up to $700,000 in tax incentives given Cornbread Hemp create the promised jobs with an average hourly wage of $26.56.

Now, Higdon said he has 365 days to get new federal policy on the books before he is forced to go out of business.

The perfect Hail Mary would be a signal from Congress that the hemp language might be reversed.

Higdon and others in the industry hope it may come from Kentucky’s U.S. Rep. Brett Guthrie and his powerful House Committee on Energy and Commerce. The group’s health subcommittee is where legislation to reverse course, to rewrite what is considered “hemp,” would likely originate, Higdon said.

“It’s a gut punch, and it’s been hard,” Higdon said. “There is that silver lining (in future legislation), but it does feel like a death sentence.

“It’s up to us to fix it.”

Kentucky NORML Executive Director Matthew Bratcher, who heads the state affiliate chapter of the National Organization for the Reform of Marijuana Laws, acknowledged that the immediate blow to the industry from the deal to open the government seems bad right now, but he thinks, “the federal government has a plan.”

Bratcher said everyone was surprised hemp took off the way it did and from a regulatory perspective, that might be cause for concern. He said one might see there’s too much money in the industry, that infused drinks can be sold out of liquor stores and product packaging have no rules or bounds.

“You can’t hold all the space in the vices,” Bratcher said, referring to the bourbon industry’s influence in Kentucky. “Eventually, things will change.”

The hemp industry, Higdon said, isn’t opposed to being regulated. Business owners just want a seat at the table, he said.

“Time and time again, American farmers have proven resilient, and hemp is no different,” said Ken Meyer, South Dakota-based Complete Hemp Processing co-owner and co-chair of U.S. Hemp Roundtable’s Farmer Advisory Council, in a statement. “The 2018 Farm Bill gave us a chance to embrace innovation and invest in a profitable crop. Our focus now is education of Congress and building a path that secures hemp for future generations and keeps farmers in business.”

On Thursday during his weekly update, Gov. Andy Beshear said he hadn’t reviewed the hemp provision closely.

“Hemp is an important industry in Kentucky,” he said. “We should have appropriate safety regulations around it, but we should make those regulations here in Kentucky, talking to the industry and making sure that we get that balance right.

“I think that we can protect our kids. I think that we can do the right thing to protect all of our people while not handicapping an industry that supports a lot of people,” he said.