Will Cannabis Genetics Be Restricted?
A redefinition of hemp under federal law, set to take place Nov. 12, spells the loss of Farm Bill protections for many hemp-derived THC products across the country: mild beverages as well as THCA flower and delta-8 THC gummies, vapes and additional products available at gas stops and smoke shops.
But the hemp ban also creates a major complication for the legitimate cannabis industry. Seeds from cannabis varieties that produce flower with greater than 0.3% THC are no longer legal to transport out of state.
Although seed buying will probably continue in authorized states, the changes threaten to close some seed suppliers and genetics businesses, observers say, while causing supply-chain issues for cannabis growers and retailers.
“If this wording goes forward, we will require pop-up shops to sell seeds in every state where it’s permitted,” Campanella said. “Which is why we’re also offering clones and tissue cultivation, because that’s not covered in the bill.”
When are cannabis genetics and clones illegal to ship between state lines?
The updated regulations categorize seeds depending on the THC potential of the mother plant. Genetic substances such as seeds and clones are rendered illegal if the final product exceeds the threshold.
For now, seeds are currently shipping under the 2018 Farm Bill’s status quo. But the time is ticking for businesses like Brothers Grimm and for cannabis cultivators who fear supply chain disruptions if out-of-state access to genetics is banned.
Most of the cannabis sector remains largely unaware of the approaching shutdown of the interstate genetics marketplace, said Ryan Power, cofounder of Sebastopol, California-based breeder Atlas Seed.
Without government intervention in the way of an exception for seeds or an overall moratorium, many seed suppliers will simply be shuttered by November, he added.
“We are functioning legally currently, but if that changes, it will upend the legitimate licensed industry in each state,” said Power, whose customers includes seed suppliers as well as licensed commercial cultivators.
“Customers are going to lose choice, and it will be a significant shutdown for most people.”
What are cannabis seed suppliers doing to stay 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.
Previously a seed supplier, Silberhaze is now focused on the branding, preservation and IP safeguarding of elite plant genetics.
That’s because seed businesses hoping to remain compliant in this updated environment must have solid documentation, he said.
“You have to demonstrate where this stuff comes from, so it’s extremely important to have documentation, even to the point where you have breeder names,” Silber said.
“Smaller businesses will have to work with improved records and a better chain of custody,” he added. “We want that documentation too, because we don’t want to be dealing with shady sources.”
To prevent seizures and other legal consequences, seed business owners must “get their ducks in a row” before the updated regulations take effect, Silber said.
“Audit all your stuff immediately, and classify what you can,” Silber said. “Take stock, document your lineage, preserve cultivator records, and organize any cannabinoid or terpene information you currently have. If regulations shift, you’ll be in a far better position to comprehend what may be impacted and make educated decisions.”
Does federal marijuana rescheduling affect cannabis genetics?
Silber believes U.S. Drug Enforcement Administration registration may be required for companies engaged in research.
But for now, seed houses can’t register with the DEA like state-licensed therapeutic cannabis businesses can. Such an option is unavailable to seed banks, nurseries or genetics businesses, said Jim Ickes, an attorney and partner with Frantz Ward’s cannabis practice group in Cleveland.
“Genetics activity may be occurring inside larger state-licensed medical marijuana businesses, as some states allow dispensaries or registered therapeutic operators to offer seeds, clones or home-cultivation materials,” he said.
“But that is distinct from the DEA establishing a freestanding seed bank registration category.”
Some genetics companies are currently changing business practices to conform with the updated law. According to Ickes, they must address questions including:
- Which of our varieties produce plants above 0.3% total THC?
- Which seeds remain as hemp after Nov. 12, 2026, and which don’t?
- What does our inventory look like once we sort it against the viable-seed exclusion?
Ickes also understands confusion from customers who believed government rescheduling of therapeutic marijuana would resolve their situation with banking institutions. However, the latest regulatory language has shifted those conversations past the basics of classification, he said.
“Banks ask whether this particular revenue source is legal, whether it connects to state-licensed activity, or whether there’s interstate-commerce risk,” said Ickes.
“After November, a seed supplier selling high-THC genetics can’t address the first question with the hemp definition. It has to refer to a legal state cannabis pathway instead. Seed suppliers dealing in authentic industrial-hemp seed keep the simpler story.”
What’s the outlook of cannabis genetics?
Campanella is part of a emerging coalition of other breeders, https://nativesusa.com/ (https://nativesusa.com/) farmers and researchers that’s arguing seeds are better defined as farm inputs than controlled substances. To that end, seeds should be managed by the U.S. Department of Agriculture, leaving the DEA to concentrate its enforcement work elsewhere.
“How do you regulate something based on what it could become later?” said Campanella. “Our preference is to have that language removed, or have seeds regulated by the USDA as a hemp product.”
But in the meantime, Campanella is restructuring Brothers Grimm to function outside the reach of changing federal oversight. The company plans to keep its Colorado seed operation while positioning its Oklahoma tissue cultivation facility as a hedge against government prohibition of cannabis seeds.
As she noted: “If things evolve in a way where we can’t concentrate on interstate shipping, we’ll have other resources to satisfy people’s needs without putting ourselves in trouble.”