The farmers leaving hemp due to looming federal ban
Minnesota’s hemp farmers have weathered a boom, a bust and years of changing rules. Now, a federal ban on most hemp-derived THC products is the latest blow to an industry they helped build.
For Jeremy Saueressig, that means no hemp in his Hastings fields this year. He’s among the few Minnesota farmers still growing hemp for THC. After growing the crop since 2019, he planted more soybeans instead.
“Missed opportunity,” he said, looking over his fields of soybeans. “The lost opportunity of another year of R and D, another year of moving the market, setting networks.”
That’s because of a looming federal ban on most hemp-derived THC products set to take effect Nov. 12. Saueressig’s hemp crop is typically turned into THC drinks and edibles or CBD products.
Saueressig is among farmers across the country cutting back on hemp as the market faces uncertainty. Farmers in Colorado, Vermont and Kentucky are making similar decisions, with some cutting acreage, abandoning hemp altogether or being left with harvest they can’t sell, according to MJBizDaily.
Saueressig says he’s sitting on 15,000 to 20,000 pounds of harvested plant material from last year that should’ve been sold by now. With the federal ban nearing, buyers are limiting their risk and holding back on purchases, which is driving down demand.
“I know of farmers that are sitting on leftover biomass from last harvest that they are having trouble moving, and because of that sentiment, a lot of farmers are not growing at all this year,” said Dennis Mistrioty, president of the U.S. Hemp Roundtable, a national hemp advocacy group.
That’s creating ripple effects through the supply chain. Burnsville-based Northern Diversified Solutions, a hemp manufacturer, works with about a half-dozen growers in Minnesota including Saueressig to make THC emulsions used in drinks and gummies. All six decided not to grow this year.
“They’re not going to grow something that they don’t believe they can sell,” said Kyle Marinkovich, founder of Northern Diversified Solutions. His company has supply secured for the next year, but the future is unclear.
Congress works to delay ban as farmers cut down on hemp
The federal hemp ban will limit hemp-derived products to 0.4 milligrams of total THC per container. In comparison, Minnesota limits hemp-derived products at 5 milligrams THC per serving, 50 milligrams per package of edibles, and 85 milligrams in large-format beverages.
The Senate has already voted to push that deadline to Dec. 11 as part of a bill championed by U.S. Sen. Amy Klobuchar of Minnesota, but the House has yet to sign off on the bill and is expected to take it up next month.
The one-month delay would give hemp businesses and farmers a little more time to prepare and also give Congress more time to determine what comes next for the industry.
But the ban has already damaged the hemp-THC market.
“It’s been really challenging because innovation and creativity and growth has been stunted by uncertainty,” said Mistrioty, who’s also a hemp farmer based in Milwaukee. “We don’t know where things are going to end up this fall, and you don’t want to spend money and resources on a long-term payout when that long term might not exist at all.”
In Burnsville, Marinkovich says the uncertainty is affecting his manufacturing business. Northern Diversified Solutions had doubled its business every year since it launched in 2019, but sales are flat this year.
He says that’s not because consumers have stopped buying hemp-derived THC products, but because distributors and retailers are ordering less to avoid being stuck with unsold inventory when the federal restrictions take effect.
If the ban goes into effect, it could shutter Marinkovich’s business.
“We would be at best a much smaller operation, and more likely, unless some of our other products could pick up the slack, we’d probably have to shut,” he said. “Yeah, it’s dire.”
According to U.S. Hemp Roundtable, the U.S. hemp-derived product market is worth about $28.4 billion. The advocacy groups puts the economic impact of hemp farming at $6.86 billion and says farmers retain a larger share of hemp’s value than they do from traditional crops like corn and soybeans.
“My farmers here in Wisconsin have indicated that per acre, hemp has been more profitable than corn and soybean,” Mistrioty said. He says the crop’s smaller scale can also create opportunities for small farms.
Ban is latest blow to farmers who have faced challenges building the hemp industry
Nationwide, commercial hemp production was legalized through the 2018 Farm Bill.
“Starting in 2019, that is when we saw cannabinoid production come onto the scene and really explode,” said Katy Mutschler, who oversees the Minnesota Department of Agriculture’s hemp program.
That year, the state licensed more than 350 growers. By 2020, that number had climbed to a peak of 461.
The boom didn’t last. Mutschler says the market became oversaturated as more farmers grew hemp for cannabinoids, while the industry struggled to develop enough processing capacity and demand. Prices fell.
Many of those growers eventually left the industry. According to a recent analysis from the Federal Reserve Bank of Minneapolis, the decline isn’t unique to Minnesota.
“After the initial wave of novelty and interest, growing hemp for extracts was less profitable than initially thought,” wrote Joe Mahon, regional outreach director. “While industrial hemp for fiber and seed is relatively low maintenance and grows well in the district’s climate, hemp flower requires a lot more hand-holding.”
On top of all those factors, Minnesota farmers growing hemp for cannabinoids have also faced changing rules under the Minnesota Office of Cannabis Management, which was established after the state legalized recreational cannabis in 2023.
Angela Dawson started growing hemp under her 40-Acre Co-op soon after the 2018 Farm Bill passed. She developed her own strain of hemp to grow, and produced body products and gummies containing CBD.
She struggled to find banks willing to work with a hemp business, in her assessment confusing her with a cannabis business. Then the state’s changing rules around packaging and labeling made it harder to stay afloat.
“We had a customer that was going to order a bunch of the product, and then the rules came and they canceled their order, and so we were left with a whole bunch of product that was not labeled right and didn’t have anywhere to sell it to. So that was one big hit,” she said.
Dawson decided to leave the hemp industry in 2024.
In 2025, Minnesota had about 60 licensed hemp growers. Among them was Saueressig, the Hastings farmer who spent years experimenting with strains and techniques to try to improve profitability.
“Historically, looking at the hemp growing and biomass market, it hasn’t been very lucrative financially,” he said. “We just have put in enough risk where we can keep going with everything else.”
The lower profit margins, combined with the federal ban and new licensing rules under Minnesota’s Office of Cannabis Management, influenced his decision to take a break from growing hemp this year.
Future for hemp farmers is unclear
For many farmers, the difficulties and uncertainty around hemp have been too much. Dawson is instead moving into Minnesota’s adult-use cannabis market and plans to open a dispensary in the Eat Street area of Minneapolis next month.
“We had a really great success when we were growing hemp outdoors and I’m really sad that we’re not doing that anymore,” she said. “But you know, we’re pivoting with the times.”
Saueressig hopes to plant hemp again next year if the ban is overturned. Current federal law defines hemp as cannabis containing no more than 0.3 percent THC by dry weight. He wants federal lawmakers to raise that threshold to 1 percent, which he says would give farmers more flexibility in what they can grow, improving their odds of success.
U.S. Reps. Angie Craig of Minnesota and Andy Barr of Kentucky have introduced legislation that would regulate hemp-derived THC products instead of banning them, including raising the federal THC threshold for hemp plants to 1 percent by dry weight.
Although hemp hasn’t been particularly lucrative for Saueressig, he says the plant has too many potential uses and benefits to give up on it.
“I do see a future for it. I really do,” he said.
