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Will Cannabis Genetics Be Restricted?

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

But the hemp prohibition also generates a significant complication for the legitimate cannabis industry. Seeds from cannabis cultivars that produce flower with more than 0.3% THC are no longer legal to transport out of state.

Although seed buying will likely continue in legal states, the changes threaten to close some seed banks and genetics businesses, observers note, while causing supply-chain problems for cannabis growers and retailers.

"If this wording goes forward, we will require pop-up stores to sell seeds in every state where it's legal," 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 across state lines?

The new regulations categorize seeds based on the THC capacity of the parent plant. Genetic substances such as seeds and clones are rendered illegal if the end product crosses the threshold.

For the moment, seeds are currently shipping under the 2018 Farm Bill's status quo. But the time is ticking for enterprises like Brothers Grimm and for cannabis cultivators who fear supply chain disruptions if out-of-state availability to genetics is prohibited.

Most of the cannabis sector remains largely unaware of the approaching shutdown of the interstate genetics market, said Ryan Power, co-founder of Sebastopol, California-based company Atlas Seed.

Without federal intervention in the form of a carve-out for seeds or a general moratorium, numerous seed suppliers will just be shuttered by November, he added.

"We are operating legally currently, but if that changes, it will disrupt the legitimate licensed sector in every state," said Power, whose customers includes seed banks as well as licensed commercial cultivators.

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

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

Sagui Silber has previously recalibrated Silberhaze Genetics, his Ohio genetics business, https://nativesusa.com/ (nativesusa.com) because of state Senate Bill 56, which tightened cannabis oversight in that state while also restricting hemp-derived THC items to licensed cannabis retailers.

Previously a seed bank, 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 updated environment must have airtight documentation, he said.

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

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

To prevent seizures and additional legal fallout, seed entrepreneurs must "get their ducks in a row" before the new regulations take effect, Silber said.

"Review all your materials immediately, and classify what you can," Silber said. "Take inventory, document your lineage, preserve cultivator records, and organize any cannabinoid or terpene information you currently have. If regulations shift, you'll be in a much better position to understand what may be affected and make informed decisions."

Does federal marijuana rescheduling affect cannabis genetics?

Silber believes U.S. Drug Enforcement Administration registration may be necessary 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, a lawyer and partner with Frantz Ward's cannabis law group in Cleveland.

"Genetics activity may be happening inside larger state-licensed medical marijuana businesses, as some states allow dispensaries or registered therapeutic operators to sell seeds, clones or home-cultivation materials," he said.

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

Some genetics companies are currently changing business practices to comply with the updated law. According to Ickes, they must answer 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 genetics exclusion?

Ickes also recognizes confusion from customers who believed government rescheduling of medical marijuana would resolve their situation with banking institutions. However, the recent regulatory wording has moved those conversations beyond the basics of classification, he said.

"Banks ask whether this particular revenue stream is lawful, whether it ties to state-licensed activity, or whether there's cross-state risk," said Ickes.

"After November, a seed supplier selling drug-type genetics can't answer the first question with the hemp definition. It has to point to a lawful state cannabis channel instead. Seed suppliers dealing in authentic industrial-hemp seed keep the cleaner story."

What's the future of cannabis genetics?

Campanella is part of a new coalition of fellow breeders, farmers and researchers that's arguing seeds are more appropriately 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 focus its enforcement work elsewhere.

"How do you regulate something based on what it might become one day?" 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 operate outside the reach of shifting federal oversight. The company plans to keep its Colorado seed facility while placing its Oklahoma tissue culture facility as a safeguard against federal prohibition of cannabis seeds.

As she explained: "If things develop in a way where we can't concentrate on interstate shipping, we'll have additional resources to meet people's requirements without putting ourselves in trouble."