Lawmakers consider H.945 to shield Vermont hemp and CBD producers from federal THC rule changes

Lawmakers in a legislative committee heard testimony that an expected federal change to the definition of hemp could reclassify common CBD products and sharply curtail interstate sales, and reviewed a short‑form bill, H.945, intended to protect Vermont producers.

Representative Scott Campbell told the committee he had relayed concerns from constituent Annika McCann of St. Johnsbury, who makes topical CBD oils. Campbell said McCann believes a recent federal provision would "outlaw full‑spectrum CBD" by criminalizing products that contain more than 0.4 mg of THC per container, a threshold she said is not achievable in some current formulations. He warned that 20 to 30 small Vermont manufacturers could be affected and that many rely on interstate sales.

Legislative counsel Tucker Anderson described H.945 as a short form that would amend Title 6 (agriculture) and Title 7 (alcoholic beverages, cannabis, and tobacco) to preserve Vermont’s current market definitions and provide the state flexibility while federal rules remain uncertain. Anderson said the federal threshold is scheduled to take effect in November 2026 and that the bill mirrors prior legislative approaches that "freeze" definitions locally to avoid disruptive redefinitions driven by federal changes.

James Pepper, chair of the Cannabis Control Board, told the committee the Senate's miscellaneous agriculture bill includes language aimed at the same problem and that agency rulemaking could define how intermediates (distillates and byproducts) move among growers, processors, and manufacturers so hemp processors can avoid being treated as cannabis processors. Pepper said this approach is intended "to preserve, at least, Vermont market access" for in‑state businesses and noted a possible in‑state safety margin discussed in the hearing: "as long as her products aren't exceeding 1.5 mg per serving or 10 mg per package, then it seems to me like what's being contemplated is aimed directly at preserving…market access."

Committee members asked whether leaving detailed definitions to rulemaking would create uncertainty for banks, insurers and supply‑chain partners. Counsel acknowledged the concern but said rulemaking allows the board and the Legislature additional review opportunities before final rules take effect. Witnesses and members repeatedly noted the central danger: if intermediate concentrates are classified as cannabis at the federal level, processors could face higher banking and insurance costs and licensing requirements that many small operators cannot bear.

The committee also discussed practical effects on distribution. Campbell said McCann currently sells at farmers markets and local natural food stores; if restricted to licensed dispensaries, her in‑state market and much of her interstate business would shrink. He cited licensing costs in his summary—an initial recreational manufacturing application fee of about $1,100 plus roughly $2,500 in annual fees—as a potential barrier for small producers.

No formal votes were taken. The committee scheduled a bill walkthrough by legislative counsel and said it would hear more extensive testimony, including from industry participants, once the bill text is available.