Will Cannabis Genetics Be Restricted?
A redefinition of hemp under national law, scheduled to take effect Nov. 12, signals the loss of Farm Bill protections for many hemp-derived THC items across the country: mild beverages as well as THCA bud and delta-8 THC edibles, vapes and other products sold at gas stations and smoke shops.
But the hemp ban also generates a significant complication for the legitimate cannabis industry. Seeds from cannabis cultivars that generate flower with greater than 0.3% THC are no longer legal to transport out of state.
Although seed buying will likely continue in authorized states, the changes threaten to shutter some seed suppliers and genetics businesses, observers note, while creating supply-chain issues for cannabis growers and retailers.
“If this language goes through, we will require pop-up stores to sell seeds in every state where it’s permitted,” Campanella said. “Which is why we’re also providing clones and tissue cultivation, because that’s not included in the bill.”
When are cannabis seeds and clones prohibited to ship between state lines?
The updated regulations classify seeds depending on the THC potential of the parent plant. Genetic substances such as seeds and clones are rendered illegal if the end product exceeds the threshold.
For the moment, seeds are still shipping under the 2018 Farm Bill’s status quo. But the time is ticking for enterprises like Brothers Grimm and for cannabis growers who fear supply chain interruptions if out-of-state access to genetics is banned.
Most of the cannabis industry remains largely unaware of the impending shutdown of the interstate genetics market, said Ryan Power, cofounder of Sebastopol, California-based company Atlas Seed.
Without federal intervention in the form of an exception for seeds or a general moratorium, numerous seed suppliers will simply be shuttered come November, he added.
“We are operating legally currently, but if that changes, it will disrupt the legal licensed industry in each state,” said Power, whose customers includes seed suppliers as well as licensed business cultivators.
“Customers are going to lose choice, and it will be a major shutdown for many people.”
What are cannabis seed banks doing to remain legal after the federal hemp ban?
Sagui Silber has already recalibrated Silberhaze Genetics, his Ohio genetics business, because of state Senate Bill 56, which strengthened cannabis supervision in that state while also restricting hemp-derived THC products to licensed cannabis retailers.
Formerly a seed bank, Silberhaze is now focused on the marketing, preservation and IP safeguarding of elite plant genetics.
That’s because seed companies hoping to stay compliant in this updated environment must have airtight documentation, he said.
“You have to prove where this stuff comes from, so it’s very important to have documentation, even to the point where you have breeder names,” Silber said.
“Smaller businesses will have to operate with better records and a stronger chain of custody,” he added. “We need that documentation too, because we don’t want to be dealing with questionable sources.”
To avoid seizures and other legal fallout, seed entrepreneurs must “get their ducks in a row” before the updated regulations take place, Silber said.
“Audit all your materials immediately, and categorize what you can,” Silber said. “Take inventory, document your heritage, preserve breeder records, and organize any cannabinoid or terpene data you already have. If regulations shift, you’ll be in a much better position to comprehend what may be affected and make informed decisions.”
Does federal marijuana rescheduling affect cannabis genetics?
Silber believes U.S. Drug Enforcement Administration licensing may be necessary for businesses engaged in research.
But for the time being, seed houses can’t register with the DEA like state-licensed therapeutic cannabis businesses can. Such a pathway is not available to seed suppliers, nurseries or genetics companies, said Jim Ickes, a lawyer and partner with Frantz Ward’s cannabis practice group in Cleveland.
“Seed-related activity may be happening inside larger state-licensed therapeutic marijuana businesses, as some states permit dispensaries or registered therapeutic operators to sell seeds, clones or personal growing materials,” he said.
“But that is distinct from the DEA creating a freestanding seed bank registration category.”
Some genetics companies are already changing business practices to conform with the new law. According to Ickes, https://nativesusa.com/ (https://nativesusa.com/) they must answer questions including:
- Which of our varieties produce plants above 0.3% total THC?
- Which seeds survive as hemp after Nov. 12, 2026, and which don’t?
- What does our catalog look like once we sort it against the genetics exclusion?
Ickes also recognizes confusion from clients who believed federal rescheduling of therapeutic marijuana would clarify their situation with banking institutions. However, the recent regulatory wording has shifted those conversations beyond the basics of classification, he said.
“Banks ask whether this particular revenue source is legal, whether it connects to state-licensed operations, or whether there’s interstate-commerce risk,” said Ickes.
“After November, a seed supplier selling high-THC genetics can’t answer the initial question with the hemp definition. It has to point to a legal state cannabis pathway instead. Seed banks dealing in genuine industrial-hemp seed keep the cleaner story.”
What’s the outlook of cannabis genetics?
Campanella is a member of a new coalition of other breeders, growers and researchers that’s arguing seeds are more appropriately defined as farm inputs than regulated substances. To that effect, seeds should be managed by the U.S. Department of Agriculture, allowing the DEA to focus its enforcement work elsewhere.
“How do you control something based on what it could become later?” said Campanella. “Our preference is to have that wording removed, or get seeds regulated by the USDA as a hemp product.”
But in the interim, Campanella is restructuring Brothers Grimm to operate outside the reach of changing federal oversight. The business plans to maintain its Colorado seed operation while placing its Oklahoma tissue cultivation facility as a hedge against federal prohibition of cannabis seeds.
As she explained: “If things evolve in a way where we can’t concentrate on interstate shipping, we’ll have additional resources to satisfy people’s needs without getting ourselves in trouble.”