Industry Reactions to Cannabis Ban

Understanding the New Federal Shift

The recent federal move to restrict intoxicating hemp-derived products is sending shockwaves through the industry. The newly signed legislation tightens the definitions originally created under the 2018 Farm Bill, closing the loophole that allowed the rapid rise of delta-8 THC and other lab-derived cannabinoids. The bill “includes the prohibition of intoxicating hemp-derived products,” a major pivot that has quickly become one of the most discussed changes in cannabis and hemp policy.

What the Restriction Covers

According to the summarized legislative updates, any hemp-derived product intended for human or animal consumption must meet stricter criteria. These include the removal of synthetic cannabinoids or compounds created outside the plant, maintaining THC levels under 0.3% total THC (including delta-9 THC, THCA, and related compounds), and adhering to a sharply reduced limit of 0.4 milligrams total THC per container for finished consumer products. This essentially eliminates a large portion of current hemp-derived retail inventory nationwide.

Industry Pushback Intensifies

The reaction across the market has been intense. One stakeholder stated, “Our industry is being used as a pawn as leaders work to reopen the government. Recriminalizing hemp will force American farms and businesses to close and disrupt the well-being of countless Americans who depend on hemp.” Many operators feel blindsided, having built business models around the previous definitions. Meanwhile, supporters of the new language argue this was always the intention of the original law. Senator Mitch McConnell noted that the 2018 bill aimed to build an agricultural hemp industry—not enable “unregulated, intoxicating, lab-made, hemp-derived substances with no safety framework.”

Why the Cannabis Ban Matters for Real Estate Owners

Regulatory tightening doesn’t just affect product manufacturers. It impacts cultivators, retailers, and—critically—cannabis real estate owners. Whenever the federal landscape shifts, lenders react. With more than $2 billion in cannabis-related real estate loans coming due by the end of 2026, uncertainty becomes more than a talking point; it becomes a financial threat.

When operators face a volatile, as this cannabis ban ignites, regulatory environment combined with large upcoming debt maturities, refinancing becomes not just smart—it's essential. Borrowers with dispensaries, grow facilities, mixed-use sites, or vertically integrated operations should be evaluating long-term financing options now, before the lending environment potentially tightens.

Why Refinancing Now Is a Strategic Advantage

Refinancing into a lower-rate bank loan today can help:

• Lock in favorable rates before lenders pull back

• Stabilize cash flow and reduce financial volatility

• Build equity while asset values are still strong

• Create breathing room before the 2026 maturity wave hits

• Prepare for potential increases in risk-based pricing

  
  

Waiting until lenders adjust underwriting standards to reflect regulatory changes can trap operators in unfavorable terms or limit available financing altogether.

A Smart Move Before the Market Shifts

For cannabis property owners—whether dispensaries, indoor cultivation facilities, or greenhouse operations—now is the time to explore financing options. At Lulu Capital, we help operators compare long-term bank loans, private capital solutions, and alternative pathways so they can secure their position before market conditions change. With the combination of regulatory uncertainty and massive amounts of debt coming due, taking action early isn’t just beneficial—it’s strategic.

Source Article: Cannabis Business Times