Washington’s hemp market shrinks as federal law looms, potential boost for legal cannabis

November 23, 2025

In Washington State, ingestible hemp products are already effectively banned, but a new soon-to-be-law from the federal government could still shake things up.

In passing a bill to reopen the government, Congress banned intoxicating hemp products.

SEE ALSO | Cannabis sales in Washington fall for 5th year amid oversupply and declining prices

Hemp is a type of cannabis that can still get someone high, but has a lower THC level. In many states, the product is not regulated at all.

But in Washington, state lawmakers passed a bill two years ago that essentially eliminated the marketplace for those products. Cannabis Programs Manager at the Washington State Department of Agriculture, Trecia Ehrlich, said the state went from 200 licensees in 2020 to 40 this year due to that law.

Ehrlich said those 40 growers in the state are under out-of-state contracts to sell their product.

“I think a lot of them probably won’t produce hemp in the future because they won’t have anywhere to sell it. It was already very challenging for them to find buyers,” she said. “So it will challenge the marketplace growth.”

Ehrlich said for those farmers, it is not just about ingestible products. She said many of them have explored new and sometimes uncommon uses.

“We’ve definitely had farmers who came into growth because they were interested in cannabinoids and then through that found that they wanted to produce insulation, produce flooring, produce products for sustainable building,” she said.

The issue is complex, though, Ehrlich said, because while the hemp industry might lose out under this new law, it could bring new growth to the legal cannabis industry in the state.

“These kinds of gray area hemp products that could be purchased online, delivered to people’s doors, they were big competitors for the legal cannabis marketplace,” she said. “Producing a product that is tested, that is packaged in a certain way, [hemp] products didn’t have to deal with those regulations and were competitors. So eliminating them will be a boost, I think, to the legal cannabis market.”

Ehrlich noted that enforcement of the hemp product ban “has always been challenging.” The conversation might not be quite over yet; Ehrlich pointed out that a lot can happen between now and when the law is set to go into effect.

“Do these [hemp] products just go away, or does someone advocate or lobby to create a new marketplace for them that is regulated?” she wondered.

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The federal law will take effect on Nov. 12, 2026, if lawmakers do not take action to change what they have already passed.