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Will Cannabis Genetics Be Banned?

The redefinition of hemp under national law, set to take place Nov. 12, spells the end of Farm Bill safeguards for numerous hemp-derived THC items across the country: low-dose beverages as well as THCA flower and delta-8 THC edibles, vapes and other products sold at gas stations and smoke shops.

But the hemp ban also creates a major complication for the legal cannabis industry. Seeds from cannabis varieties that produce flower with greater than 0.3% THC are no longer legal to ship out of state.

Although seed buying will probably continue in legal states, the changes threaten to shutter some seed suppliers and genetics companies, observers say, while creating supply-chain issues for cannabis cultivators and retailers.

"If this language goes forward, we will need pop-up stores to sell seeds in each state where it's legal," Campanella said. "Which is why we're also offering clones and tissue cultivation, because that's not included in the bill."

When are cannabis seeds and clones illegal to ship between state lines?

The updated regulations classify seeds depending on the THC capacity of the mother plant. Genetic material such as seeds and clones are rendered illegal if the end product crosses the threshold.

For now, seeds are currently shipping under the 2018 Farm Bill's status quo. But the clock is ticking for enterprises 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 industry remains mostly unaware of the approaching 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, https://nativesusa.com - numerous seed suppliers will simply be shuttered come November, he added.

"We are functioning legally now, but if that shifts, it will upend the legal licensed industry in every state," said Power, whose clientele includes seed banks as well as licensed commercial cultivators.

"Customers are going to forfeit choice, and it will be a major shutdown for many people."

What are cannabis seed banks doing to remain legal after the government hemp ban?

Sagui Silber has previously recalibrated Silberhaze Genetics, his Ohio genetics company, because of state Senate Bill 56, which strengthened cannabis supervision in that state while also limiting hemp-derived THC products to licensed cannabis retailers.

Formerly a seed supplier, Silberhaze is now focused on the branding, preservation and IP protection of premium plant genetics.

That's because seed companies hoping to stay compliant in this new environment must have solid documentation, he said.

"You have to prove where this stuff comes from, so it's extremely important to have documentation, even to the extent where you have cultivator names," Silber said.

"Smaller businesses will have to operate with better records and a stronger chain of possession," he added. "We need that documentation ourselves, because we don't want to be dealing with questionable sources."

To avoid seizures and other legal consequences, seed entrepreneurs must "get their affairs in order" before the new regulations take place, Silber said.

"Audit all your stuff immediately, and classify what you can," Silber said. "Take stock, document your heritage, preserve breeder records, and arrange any cannabinoid or terpene data 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 impact cannabis genetics?

Silber believes U.S. Drug Enforcement Administration registration may be required for businesses engaged in research.

But for the time being, seed houses can't enroll with the DEA like state-licensed medical cannabis businesses can. Such a pathway 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 happening inside broader state-licensed medical marijuana operations, as some states allow dispensaries or registered therapeutic operators to offer seeds, clones or personal growing materials," he said.

"But that is different from the DEA creating a freestanding seed supplier registration category."

Some genetics operators are currently changing business practices to comply with the new law. According to Ickes, they must address questions including:

• Which of our lines 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 organize it against the viable-seed exclusion?

Ickes also recognizes confusion from clients who believed federal rescheduling of medical marijuana would resolve their situation with financial institutions. However, the recent regulatory language has moved those conversations past the basics of classification, he said.

"Financial institutions ask whether this specific revenue stream is lawful, whether it connects to state-licensed activity, or whether there's cross-state risk," said Ickes.

"After November, a seed supplier selling drug-type genetics can't address the first question with the hemp classification. It has to refer to a legal state cannabis channel instead. Seed suppliers dealing in authentic industrial-hemp seed maintain the simpler story."

What's the outlook of cannabis genetics?

Campanella is part of a new coalition of other breeders, growers and researchers that's saying seeds are more appropriately defined as agricultural inputs than regulated substances. To that effect, seeds should be managed by the U.S. Department of Agriculture, allowing the DEA to concentrate its enforcement work elsewhere.

"How do you control something based on what it could become later?" said Campanella. "Our choice is to have that wording removed, or have seeds regulated by the USDA as a hemp product."

But in the meantime, Campanella is reorganizing Brothers Grimm to function outside the reach of changing federal oversight. The company plans to maintain its Colorado seed operation while positioning its Oklahoma tissue cultivation facility as a hedge against government prohibition of cannabis seeds.

As she explained: "If things develop in a way where we can't focus on interstate transport, we'll have additional resources to meet people's needs without getting ourselves in trouble."