Kentucky’s hemp industry is urging state lawmakers to adopt new protections for hemp businesses as federal THC restrictions scheduled to take effect December 11 threaten a market valued at more than $300 million and supporting over 3,000 jobs.
The Kentucky Hemp Association presented its recommendations Thursday to the Kentucky Legislature’s Interim Joint Committee on Licensing, Occupations, and Administrative Regulations. The association warned that the federal restrictions could eliminate much of the state’s existing hemp-derived cannabinoid market, creating significant consequences for farmers, manufacturers, retailers and employees.
According to the association, Kentucky’s hemp agricultural economy exceeds $300 million, with more than 3,000 people employed statewide. Products containing THC account for approximately 95% of consumer demand, while hemp products sold in licensed liquor stores can generate up to 25% of individual stores’ revenue.
The association specifically cited federal legislation backed by Senator Mitch McConnell that substantially restricts which hemp-derived cannabinoid products can legally be sold. The restrictions, originally scheduled for November 12, were delayed until December 11 following congressional action earlier this year.
In response, the association is proposing state legislation explicitly protecting the cultivation, processing, manufacturing, sale and use of hemp-derived cannabinoid products within Kentucky when conducted in compliance with existing state laws. The proposal would also extend financial services protections to licensed hemp farmers and businesses, using protections established for Kentucky’s medical marijuana industry as a model.
Another proposed change would transfer oversight of hemp-derived cannabinoid processing exclusively to the Kentucky Department for Public Health, removing overlapping authority currently held by the Department of Agriculture.
The association also wants certain synthetically derived cannabinoids removed from the state’s approved cannabinoid list, specifically naming HHC, THCP, THCM and delta-6-THC.
The presentation highlighted the industry’s existing contributions to state revenue. Kentucky’s hemp licensing and product registration programs have generated more than $2 million in revenue during 2026, according to the association, with 14 employees administering the program.
The association also emphasized the importance of hemp cultivation to Kentucky farmers. Cannabinoid-producing floral material accounts for approximately 97% of hemp grown in the state, according to figures cited in the presentation, while grain and fiber crops represent considerably smaller portions of production.
Kentucky already regulates hemp products through multiple state agencies, including the Department of Agriculture, Cabinet for Health and Family Services and Alcoholic Beverage Control. The association argues that preserving this regulatory structure while streamlining oversight would help protect existing businesses and agricultural investments.
The proposed protections come as hemp businesses nationwide face uncertainty over federal restrictions that could remove many currently legal THC products from the market. The Kentucky Hemp Association is seeking legislative changes ahead of the state’s 2027 regular session, while the industry’s immediate future remains tied to potential congressional action before the December deadline.
