‘It would all go away’: Iowa hemp retailers ‘frustrated’ by new law restricting products

DES MOINES — Iowa hemp retailers are raising concerns after federal lawmakers passed legislation banning hemp products this week while reopening the government.

Restrictions on hemp-derived products containing tetrahydrocannabinol, or THC — the psychoactive substance in cannabis that causes a high — were folded into a government shutdown-ending piece of spending legislation signed into law by President Donald Trump Wednesday evening. Impacted products include beverages, edibles and topicals. Hemp is a form of the cannabis plant that has very low percentages of THC.

The provision would prohibit products containing more than 0.4 milligrams of THC per container, which is significantly lower than Iowa’s allowed potency of four milligrams per serving or 10 milligrams per container. The limits would take effect in a year.

Hemp was initially legalized in the 2018 Farm Bill for industrial purposes, but the legislation created a loophole for the THC industry, which has been able to create markets for the unregulated product.

In 2024, Iowa created a legal framework for THC products and banned their use for anyone under the age of 21.

David Moore, partner and director of government affairs at Iowa-based THC beverage company Climbing Kites, said the ban would essentially wipe out the sale of all THC and CBD products in Iowa. CBD, or cannabidiol, is a non-psychoactive extract from hemp.

“All the customers, the retailers, all of them would feel that pain,” Moore said.

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Climbing Kite sells THC-infused beverages and sparkling water, with versions that offer 4 and 2.5 mg of THC.

Moore said the company believes there should be federal regulations on the products, including packaging requirements and prohibitions on marketing the products to children, but, he added he is “frustrated” by the ban.

“We're not going to break the law,” Moore said. “There has to be enforcement, and the bad actors have to get out of the space. There's no way around that. And we feel like that can be done through a proper bill."

But some lawmakers say the ban is long-awaited. Republican Iowa U.S. Sen. Chuck Grassley said the hemp legalization in the 2018 Farm Bill authored by Republican Sen. Mitch McConnell, a senior member of the Senate Agriculture and Appropriations Committees, was never intended to also legalize THC products.

“This new legislation is set to take effect a year from now, because you've got to give businesses an opportunity to adjust their business practices according to what the law is,” Grassley said in a statement to the Gazette-Lee Des Moines Bureau on Friday. “We couldn't expect them to get rid of their product overnight. I support Sen. McConnell’s action, because as he said, it was never intended, when his legislation was put into effect, to promote this intoxicating effect of the product. There was a loophole, and the industry took advantage of it. It was never intended, and it should be closed.”

The hemp industry and lawmakers will have one year to negotiate the regulations.

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The ban’s impact on Iowa THC retailers

Ashley Lambson, founder of Urbandale-based company The Happy Can, said Iowa's THC cap has allowed the business to sell products including THC-infused beverages and edibles. But she said the new federal restrictions would hit the company hard and result in impacts on farmers and other jobs in the industry.

“This isn't just a molecule issue. This is an ecosystem issue which could affect jobs, farmers, tax revenue,” Lambson said. “We're going to do everything we can to put a big fight in.”

The ban could result in layoffs, but her company is going to do everything it can to find new avenues to keep all of its staff employed, Lambson said. She would like to see federal regulations around the product, but believes the ban is overreaching.

“We're hopeful that we'll be able to find legal framework to be able to continue operation. It's a $28 billion industry that's only continuing to grow,” she said. “We hate that it had to get lumped into the spending bill. We know prohibition doesn't work.”

If the restrictions are put in place, 95 percent of the hemp industry would be banned, according to the U.S. Hemp Round Table.

Even with the proposed 0.4 milligram cap, Moore said it would be virtually impossible for companies to produce THC products under that threshold.

“It's a natural process when it comes to extraction and making these products, and there's no variance,” Moore said. “Point four is such a small amount that it proved it very difficult.”

What are Iowa’s THC laws?

Before Iowa passed age and potency restrictions for THC products in 2024, there were no age limits for owning or selling hemp products in the state, though many retailers put their own in place.

The 2024 law created a 4 milligrams per serving or 10 milligrams per container cap for THC products and imposed an age limit of 21 for purchasing the products.

In 2025, lawmakers passed legislation prohibiting open THC beverages in vehicles, including in the passenger area when a vehicle is in operation. It allows open or unsealed THC beverages to be transported in the trunk of the motor vehicle or behind the last upright seat of the motor vehicle if it does not have a trunk.