How Hemp-THC businesses are bracing for a near total ban

Adrian Ma (0:01)

N-P-R.

Recreational weed is legal in half of all the US states. But even in places where it's not, you'll still see smoke shops and liquor stores selling things with that signature star-shaped leaf.

Mariana Bakayow (0:18)

THC drinks, vapes, edibles, all of those are legal because of a loophole in the 2018 Farm Bill. That bipartisan legislation allowed a low level of THC derived from hemp.

Adrian Ma (0:30)

Yeah, but when it's treated in a lab, that low level of THC can end up mimicking the effects of weed.

Mariana Bakayow (0:36)

Right, that's how we got Delta 8, Delta 9, I think we're up to Delta 11 now.

Adrian Ma (0:41)

Probably we'll never see Delta 12

Mariana Bakayow (0:44)

Much like the Fast and Furious franchise, but instead of an aging cast and a desperate need for new ideas, this collapse is all on the government. Because Congress is putting an end to that loophole with a harsher ban on THC.

Adrian Ma (1:01)

This is The Indicator from Planet Money. I'm Adrian Ma. And today, I'm joined by Mariana Bakayow, a reporter from WPLN in Nashville.

Hey there.

Mariana Bakayow (1:10)

Hi. Great to be here. And yeah, that ban will mean an end to the hemp industry's most popular products. That's a $28 billion industry that could be gone by the end of the year.

A lot of businesses are having to make hard choices.

Adrian Ma (1:26)

So on today's show, we're taking a trip to Tennessee, where a recent state ban on basically all those hemp-derived THC products has impacted everyone from retailers to farmers. So, Mariana, you're from a state that's already gotten a taste of an economy with the deltas pulled off the shelf.

Mariana Bakayow (1:45)

Right. Here in Tennessee, a ban on most THC hemp products took effect in July. So we're already kind of living in a post-hemp world.

Last year, lawmakers here got ahead of Congress by banning full-spectrum CBD and things like smokable flower.

Adrian Ma (2:00)

Smokable flowers? I have an image in my head of what that is, but I'm picturing somebody just lighting up a daffodil.

Mariana Bakayow (2:10)

Not quite. It looks a little bit closer to what you would think of when you think of just regular weed. It's a type of hemp flower. When you light it, it mimics the effects of weed.

Adrian Ma (2:21)

Got it. Anyway, hemp has been a cash crop for a lot of farmers there.

Mariana Bakayow (2:26)

Take Lee Crabtree. I met up with him on his farm in Reedyville, Tennessee.

He told me that he's had to return to growing more traditional seasonal crops, like blackberries. He picks a big one off the vine.

Lee Crabtree (2:39)

It's hard to tell when they're exactly ripe. Usually when the flies are eating it, you know it's sweet.

Mariana Bakayow (2:45)

Much of Lee's farm had been devoted to a CBD variety of hemp. But that new state law has made selling his products illegal. So where there were once rows of hemp, Lee now has blackberries and corn.

Lee Crabtree (2:59)

Hoping that it sells good.

Mariana Bakayow (3:01)

And inside, Lee still has an industrial kitchen from when he made his own CBD goodies. Now his wife Stacey is using the large stainless steel counter to chop grapes for her chicken salad.

Adrian Ma (3:13)

In the months leading up to the THC ban, she started selling her chicken salad and pimento cheese sandwiches at a farmer's market up the road.

Lee Crabtree (3:20)

Stacey likes to cook. I don't know how much longer she liked to cook when she has to do it all the time.

Mariana Bakayow (3:26)

This new chapter of their business is all about trying new things. Like many former hemp farmers, Lee has had to pivot. But he says he's making less money.

Lee Crabtree (3:36)

You know, back when CBD was huge there for a minute, it was really good there for a moment. It had its time in the sun.

Mariana Bakayow (3:45)

Lee says he understands the need for greater regulation on the industry that has largely existed inside a loophole.

Adrian Ma (3:52)

Lawmakers say these regulations protect consumers, who might not know how intoxicating a product is. Here's Tennessee Republican Representative William Lamberth.

William Lamberth (4:02)

If someone buys a Sprite, they expect to get a Sprite, not a beer. If they buy a beer, they expect to get a beer, not a bottle of tequila.

Adrian Ma (4:07)

If they buy a bottle of tequila, they expect not to get a Sprite.

William Lamberth (4:10)

And so we wanted customers out there to know exactly what they were getting.