New Report Finds Federal Hemp Restrictions Could Close 68% of U.S. Businesses and Displace Up to 226,000 Workers
- New federal restrictions on hemp-derived THC products could force 68.1% of U.S. hemp businesses to close, potentially displacing up to 225,861 workers, according to the 2026 U.S. Hemp Cannabinoid Report by Whitney Economics.
- The report, based on a survey of 496 hemp businesses across 35 states, estimates the industry could lose between $35.1 billion and $41.3 billion in annual revenue, eliminate 29,523 to 36,744 employers, and reduce tax revenues by $1.2 billion to $1.5 billion.
- Changes come after the 2025 legislation redefined hemp federally with a strict limit of 0.4 mg total THC per container, although a recent law signed by President Trump temporarily delays most restrictions until December 11, 2026, allowing Congress time to consider alternatives.
- If no regulatory adjustments are made, the economic fallout could extend beyond manufacturers to affect farmers, employees, suppliers, and state/local tax revenues nationwide, impacting the broader retail economy as well.
A new economic report estimates that forthcoming restrictions on hemp-derived THC products could force more than two-thirds of U.S. hemp businesses to close and displace as many as 225,861 workers.
The 2026 U.S. Hemp Cannabinoid Report from Whitney Economics found that 68.1% of hemp businesses surveyed expect to shut down entirely if the new federal restrictions take effect as currently written. Another 15.5% said they would lay off employees, 6.9% expect to remain open with reduced revenue and 3.2% said they would relocate. Whitney Economics lists the report as released September 1.
Researchers surveyed 496 hemp businesses across 35 states and used the responses to estimate the broader economic impact nationwide.
Whitney Economics projects that implementation of the restrictions could reduce annual industry revenue by between $35.1 billion and $41.3 billion, eliminate between 29,523 and 36,744 employers and displace between 188,961 and 225,861 workers. Those workers collectively earn an estimated $7.5 billion to $8.9 billion in wages.
States could also lose between $1.2 billion and $1.5 billion in tax revenue, while the reduction in overall retail economic activity could reach between $46.6 billion and $59.6 billion.
The report estimates that the U.S. hemp cannabinoid industry is currently worth between $30.2 billion and $38.7 billion, up from Whitney Economics’ roughly $28 billion estimate in its previous nationwide analysis in 2023.
The analysis was commissioned by the American Healthy Alternatives Association, an organization that advocates for hemp and other alternatives to pharmaceuticals. According to the association, the report underwent review by four outside reviewers, including university professors.
The findings come as the hemp industry faces a major change in federal law. Legislation enacted in November 2025 rewrote the federal definition of hemp, including a new limit of 0.4 milligrams of total THC and similar cannabinoids per container for finished hemp-derived cannabinoid products.
President Trump signed H.R. 6500 on September 2, temporarily delaying most of those restrictions until December 11. The law does not repeal the restrictions, and certain provisions involving cannabinoids that cannot naturally be produced by cannabis remain scheduled to take effect earlier.
The December deadline gives Congress additional time to consider alternatives. Several lawmakers are seeking a regulatory framework that would allow hemp-derived cannabinoid products to remain federally legal while imposing new manufacturing, testing, labeling and age restrictions.
Whitney Economics says that if Congress does not change course, the economic effects could extend well beyond hemp manufacturers and retailers, affecting farmers, employees, suppliers and state and local tax collections across the country.