Minnesota’s pioneering hemp-derived THC industry could collapse if a provision included in the deal to end the federal government shutdown becomes law.

The bill that passed the U.S. Senate on Monday and now heads to the House includes language that would effectively ban hemp products containing more than 0.4 milligrams of THC, the psychoactive ingredient in cannabis. The limit would outlaw intoxicating hemp-based products in Minnesota, which allows edibles containing up to five milligrams of THC per serving and beverages containing up to 10 milligrams.

The federal measure, if passed, would take effect one year after enactment.

“This is an industry-killing change,” said Carol Moss, a Minnesota attorney who represents several hemp businesses. “Unless something happens in that one year, we will not have a hemp industry in Minnesota. The beverages, the edibles, the full spectrum of CBD. This is a killer.”

Minnesota was a national leader in creating a legal hemp-derived THC market before legalizing recreational marijuana. THC products have been legal and regulated in the state since the Legislature authorized the sale and possession of lower-potency THC edibles and beverages for adults 21 and older in 2022.

In Minnesota, hemp-derived products can be found everywhere from liquor and convenience stores to breweries and restaurants. Last month, Target announced it had started carrying THC drinks at a handful of its Minnesota stores.

THC seltzers have outsold beer at some breweries and created a new social scene for the growing number of people drinking less alcohol.

“This has definitely been keeping the lights on for a fair amount of folks,” Galligan said.

The Minnesota Office of Cannabis Management said in a statement that it is monitoring the situation and would work with the attorney general’s office and Legislature to address any impacts federal legislation may have on the state’s hemp-derived THC industry.

The language in the federal spending bill was championed by Kentucky U.S. Sen. Mitch McConnell. McConnell, who helped legalize hemp through the 2018 Farm Bill, has been pushing to close a so-called loophole that allows unregulated and intoxicating hemp products to be sold across the country.

Kentucky’s other U.S. senator, Rand Paul, attempted to strip the hemp language from the federal funding bill through an amendment on Monday, but his effort failed on a 76-24 vote. Minnesota U.S. Sens. Amy Klobuchar and Tina Smith voted in support of Paul’s amendment.

President Donald Trump has said he supports the shutdown deal, and a White House official told NBC News that he also “supports the current language in the bill on hemp.”

Maine U.S. Sen. Susan Collins referenced the letter from the attorneys general when speaking to reporters in Washington on Monday, saying there is “strong support” for the proposed hemp restrictions.

Moss said the move reflects frustration among some federal lawmakers over unregulated products and underage access, but she argued that Minnesota’s regulatory structure could have been used as a model. She hopes the one-year delay before the changes take effect will give Minnesota businesses time to adapt, or for lawmakers to reconsider.

“Instead of looking at us as a way to regulate, test and pass these products, they’re just wiping it off the planet and in essence, recriminalizing the beverages that you can buy at your grocery store,” Moss said.

For Minnesota business owners, frustration is running deep. Some see the move as political maneuvering from McConnell, who once hailed hemp as a crop for Kentucky farmers.

Jon Halper, owner of Top Ten Liquors, said he believes McConnell inserted the provision strategically during the government funding negotiations.

Minnesota House DFL Leader Zack Stephenson, who sponsored the bill legalizing recreational marijuana in 2023, said the possible federal ban on hemp-derived THC products is a “disaster” for the state.

“I really am fearful that if this ban actually goes into effect, some big-named breweries in Minnesota that are institutions that we value may disappear, may go out of business,” he said.

Minnesota breweries are unlikely to jump into the marijuana business if hemp-based products are outlawed. Businesses that sell federally illegal substances like marijuana aren’t allowed to write off their operating expenses, resulting in a potentially huge tax bill that makes it difficult to turn a profit. They also face challenges with banking and credit card processing, among other things.

Kam Talebi, owner of hemp beverage brand Gigli in Minneapolis, said the way the hemp measure advanced through the Senate left business owners blindsided. Talebi is hopeful the one-year delay before its possible implementation will give the industry a chance to work with lawmakers on “reasonable regulations.”

“This is a multibillion-dollar industry, and it is becoming an alternative to alcohol, which is what the consumer is looking for,” Talebi said. “I think this does need to be regulated. We support regulations, not a ban.”