In a dramatic turn of events, Nebraska’s Legislative Bill 316 (LB 316), which aimed to outlaw most consumable hemp and THC products, has been shelved until at least 2026. This development marks a significant moment for the state’s burgeoning hemp industry, including businesses involved in Hemp Online, Hemp Wholesale, and Hemp White Label markets. The bill’s failure to pass, stalled by a combination of strategic opposition and concerns over medical cannabis protections, reflects a broader debate about personal freedom, economic impact, and public health. This blog post delves into the details of LB 316, the reasons for its collapse, and what this means for Nebraska’s hemp industry and its consumers.

The Rise of Nebraska’s Hemp Industry

Since the 2018 federal Farm Bill legalized hemp with up to 0.3% delta-9 THC, Nebraska followed suit in 2019 with the Nebraska Hemp Farming Act, creating a legal framework for hemp cultivation and sales. This opened the door for hundreds of businesses, from small retailers to Hemp Wholesale distributors, to thrive. Over 300 dispensary-type shops emerged across the state, offering products like delta-8 edibles, CBD lotions, and other hemp-derived goods. These businesses, including those in the Hemp Online and Hemp White Label sectors, generated significant economic activity, with one retailer alone reporting nearly $1.5 million in sales tax in 2024. The industry employs over 1,600 Nebraskans and contributes an estimated $8 million in tax revenue annually, according to the 2023 U.S. National Cannabinoid Report.

The Push for a Ban: LB 316’s Intent

Introduced by State Senator Kathleen Kauth and backed by Attorney General Mike Hilgers, LB 316 sought to close a loophole from the 2019 law that allowed hemp products with delta-8 and other cannabinoids to flourish without strict regulation. The bill proposed redefining hemp products exceeding 0.3% THC of any strain—or 10 milligrams per package—as marijuana, subjecting them to the same penalties: an infraction for under an ounce, a misdemeanor for up to a pound, and a felony for larger amounts. Supporters argued that these “synthetic” products, often sold through Hemp Online platforms, posed health risks, especially to children, due to inconsistent labeling and untested compounds. Hilgers cited lawsuits against 15 retailers, claiming that 0-15% of tested products accurately displayed potency or ingredients.

The Opposition: A Call for Regulation Over Prohibition

The bill faced fierce resistance, led by State Senator John Cavanaugh, who filed nearly 30 amendments to push for regulation instead of a ban. Cavanaugh’s alternative, LB 16, proposed a Nebraska Consumable Hemp Control Act, requiring age verification, in-state testing, and tamper-proof packaging—standards already adopted by many Hemp Wholesale and Hemp White Label businesses voluntarily. He argued that adults should have the freedom to choose these products, and regulation would ensure safety while preserving jobs and revenue. Retailers like Sarah Linden of Generation V, with 24 stores generating $910,000 in sales tax, emphasized that a ban would devastate small businesses. Joseph Fraas of G&G Smoke Shops warned that prohibition would drive sales to an unregulated black market, echoing the failures of past bans.

Economic Stakes: Jobs and Revenue at Risk

The economic implications of LB 316 were a central point of contention. Opponents highlighted Nebraska’s $314 million budget shortfall, arguing that banning hemp products would exacerbate financial strain. A single retailer, The Cannabis Factory, projected $1.5 million in sales tax for 2025, while the industry as a whole could generate $7.7 million annually through regulation, per Cavanaugh’s estimates. The loss of over 1,600 jobs and millions in revenue from Hemp Online, Hemp Wholesale, and Hemp White Label operations weighed heavily on lawmakers. Senator Jane Raybould noted that banning delta-8 products would sacrifice economic vitality at a time when the state needed it most.

The Medical Cannabis Conundrum

A critical factor in LB 316’s demise was its potential conflict with Nebraska’s voter-approved medical cannabis laws. Senator Ben Hansen, a Republican, withheld support unless the bill explicitly protected medical cannabis products like tinctures and oils. Kauth’s attempts to amend the bill to address this concern were complicated by Cavanaugh’s numerous amendments, which slowed progress. The bill’s broad language raised fears that it could criminalize hemp-derived products used medicinally, such as CBD lotions sold through Hemp White Label brands. This tension underscored a broader hypocrisy: supporters wanted to limit medical cannabis to manufactured forms while banning similar hemp products, a stance critics like Senator George Dungan called inconsistent.

The Safe Harbor and Tax Provisions

LB 316 included a “consumer safe harbor” period through December 2025, allowing individuals to dispose of newly illegal hemp without prosecution, provided they could prove prior legal purchase. Legal products would have faced a 10% wholesale tax, with revenue directed to property tax relief. However, opponents like Senator Wendy DeBoer argued that the bill’s redefinition of hemp as marijuana could lead to felony charges for possessing products previously legal under the 0.3% delta-9 THC limit. Senator Carolyn Bosn countered that the bill clarified existing penalties, aligning hemp with marijuana’s criminal scale. These provisions, while intended to ease the transition, created a “gray zone” of legal uncertainty, further fueling opposition.

The Final Standoff: Why the Bill Failed

On May 30, 2025, Kauth requested that LB 316 be “passed over” just minutes before a critical cloture vote requiring 33 supporters to overcome a filibuster. Despite backing from 32 of 33 Republicans, Hansen’s refusal to support the bill without medical cannabis protections proved decisive. The Legislature, set to adjourn by June 9, ran out of time to reconcile differences. Kauth and co-sponsor Senator Jared Storm expressed disappointment, urging Hilgers to escalate legal action against THC retailers. However, the bill’s failure was celebrated by industry advocates and consumers, with posts on X reflecting relief: “Why do we have to act as if we’re the moral compass for the state? We’re senators. We’re not people’s parents,” Senator Terrell McKinney remarked.

The Future of Hemp in Nebraska

The stalling of LB 316 is a temporary victory for Nebraska’s hemp industry, preserving access to Hemp Online, Hemp Wholesale, and Hemp White Label products for now. However, the fight is far from over. Hilgers has vowed to intensify lawsuits against retailers, and Kauth plans to reintroduce the bill in 2026. Meanwhile, advocates like the Nebraska Hemp Industries Association continue to push for regulation, citing the industry’s economic and therapeutic benefits. Dr. Andrea Holmes, a cannabis expert, emphasized that most hemp products are safe when properly tested, countering claims of widespread danger. The debate reflects a broader tension between personal freedom and public safety, with Nebraska at a crossroads.

A Call for Sensible Policy

As Nebraska navigates this complex issue, the failure of LB 316 highlights the need for balanced policy. Regulation, as proposed by Cavanaugh, could protect consumers while supporting an industry that has become a lifeline for many. The hemp market, from Hemp Online retailers to Hemp Wholesale suppliers, represents more than just commerce—it’s about choice, health, and economic opportunity. For now, Nebraskans can continue to access these products, but the battle for their future will resume in 2026. Stay informed, support local businesses, and advocate for policies that prioritize both safety and freedom.

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Reference:

1.    Blebea, N. (2022). Legal status of cannabidiol. Technium Biochemmed, 3(2), 81-86. https://doi.org/10.47577/biochemmed.v3i2.6935

2.    Caldwell, J., Colclasure, B., & Granberry, T. (2025). Challenges from the field: experiences of first-year hemp farmers in nebraska. Renewable Agriculture and Food Systems, 40. https://doi.org/10.1017/s1742170524000334

Chambers, M., Beyramysoltan, S., Garosi, B., & Musah, R. (2023). Combined ambient ionization mass spectrometric and chemometric approach for the differentiation of hemp and marijuana varieties of cannabis sativa. Journal of Cannabis Research, 5(1). https://doi.org/10.1186/s42238-023-00173-0