They Built a Hemp Business in Good Faith but Washington Is About To Crush It

As the Senate prepared to vote on the funding bill to reopen the federal government earlier this month, Sen. Rand Paul (R–Ky.) warned that passing the legislation would “regulate the hemp industry to death.” Buried deep inside the continuing resolution was a provision that would completely reverse nearly seven years of industry progress—and potentially wipe out small hemp-based businesses.

In 2019, after the 2018 Farm Bill removed hemp from the Controlled Substances Act, cousins Jim Higdon and Eric Zipperle founded Cornbread Hemp. The Kentucky-based company manufactures and sells hemp-related products directly to consumers nationwide, and it stands out in a highly competitive market thanks to the quality of its organic hemp.

Cornbread pioneered a flower-only production model that uses only cannabis flowers in extraction, yielding higher-quality products. It also enforces a strict set of growing standards.

“We’re farming land that has not had pesticides on it for three years—verified. We’re using non-GMO seeds, no pesticides, and no synthetic fertilizers,” said Higdon. “The only fertilizer input we use is chicken litter…from a certified organic chicken farm.”

That quality has earned Cornbread a loyal and growing customer base, 60 percent of whom are over 66 years old and rely on these products to relieve chronic pain.

It is estimated that the number of licensed growers rose from about 3,500 in 2018 to over 21,000 in 2020. The rush subsided, and by 2021, the market steadied and licenses fell to about 9,700. Even with that correction, the economic impact of industrial hemp is undeniable. Industry estimates suggest the hemp market supports hundreds of thousands of jobs, with one model putting the number at roughly 325,000 workers in farming, biomass processing, product manufacturing, distribution, and retail nationwide. According to Department of Agriculture data, the value of U.S. industrial hemp production was about $824 million in 2021 and approximately $445 million in 2024.

And yet, even before the most recent move by Congress, many small companies, including Cornbread, have been hit by a wave of new state regulations threatening their survival. In 2025, Tennessee passed a law placing the hemp industry under the jurisdiction of the state’s Alcoholic Beverage Commission. The state’s longstanding three-tier system for policing liquor sales now extends to hemp products as well.

Beginning in January 2026, out-of-state hemp companies, such as Cornbread, wanting to do business in Tennessee must first sell their product to a Tennessee-licensed wholesaler, which must then sell it to a Tennessee retail shop. Only then can customers visit the physical store and purchase the product.

While Cornbread can set up its own wholesaler and retail facilities in Tennessee, doing so would be impractical and prohibitively expensive.

Beyond its practical business burdens, Tennessee’s law infringes on Cornbread and other companies’ fundamental right to earn a living. The law also violates the U.S. Constitution’s Commerce Clause by discriminating against out-of-state businesses and shielding in-state interests from legitimate competition. 

Cornbread Hemp has partnered with my organization, Pacific Legal Foundation, to challenge the Tennessee law. Fighting a legal battle with a state is hard enough, but the federal funding bill has opened another threat to the hemp industry from Washington.

Under the new provision, any consumable hemp product must contain no more than 0.4 milligrams of total THC—not per serving or gram, but per entire container.

Paul is right: This new rule is a death sentence to the hemp industry. If allowed to stand, it could eliminate 95 percent of all hemp-derived cannabinoid products made in the United States.

The government should not destroy the livelihoods of countless Americans, and it most certainly should not pull the rug out from under a burgeoning industry less than a decade after giving hemp its blessing.

States are squeezing hemp from one side, and now Washington is crushing it from the other—and small businesses, like Cornbread, are stuck in the middle.

The post They Built a Hemp Business in Good Faith but Washington Is About To Crush It appeared first on Reason.com.

Source: https://reason.com/2025/11/30/they-built-a-hemp-business-in-good-faith-but-washington-is-about-to-crush-it/