Last week, Ohio lawmakers finalized a move that will substantially change how the state regulates hemp-derived THC alongside its adult-use cannabis program. On Thursday, the Ohio House approved the conference committee report on Senate Bill 56 (SB 56), sending it back to the senate for a final vote, which is expected in early December.
This change is deeply tied to a major federal policy shift — and now Ohio must align its laws accordingly. MedicateOH has been following this realignment of state laws to shed some light on how various businesses and individuals will be affected by them.
What Happened Last Week? SB 56 Conference Report
Last week, the Ohio House adopted the SB 56 conference report and sent it back to the Senate for a final vote. Representative Brian Stewart said, “When it comes to intoxicating hemp products, we essentially cut to the chase… After that, all those products are either going to be sold in a marijuana dispensary or they won’t be allowed to be sold.” That blunt framing reflects how seriously legislators are taking the new federal constraints.
SB 56 as approved by the conference committee will make these sweeping changes to Ohio’s intoxicating hemp rules:
• The bill sets a per-serving cap for hemp-based THC beverages at 5 mg, along with enhanced labeling and testing rules. Products defined as intoxicating hemp (over 5mg/serving) would be treated as cannabis, meaning they can only be sold in licensed dispensaries.
•The new law will adhere to recent federal law changes by establishing a 13-month period wherein drinkable cannabinoid products (DCPs) may be manufactured, distributed, and sold within the state of Ohio, ending on December 31st, 2026.
Because hemp is federally regulated as an agricultural commodity and states hold the authority to regulate commercial sales within their borders, Ohio retains the power to set its own THC limits, age requirements, retail licensing rules, and enforcement frameworks—even when those rules go beyond federal minimums. It’s important to note that hemp may still be grown in Ohio for non-consumption industrial uses.
SB 56 Changes to Adult-Use Cannabis Law
B 56 also includes provisions updating the state’s adult-use cannabis law, including adjustments to expungement eligibility for past possession offenses. The conference committee lowered the amount eligible for expungement from up to 200 grams in the House version to up to 100 grams.
The bill maintains the current 10 percent excise tax rate on adult-use cannabis and clarifies home grow allowances (6 per person or 12 per household), while banning growing in specific settings such as childcare centers and recovery residences. SB 56 also merges medicinal and adult-use provisions to create a more unified regulatory structure.
With respect to potency caps, the bill sets maximum THC thresholds for adult-use extracts at 70 percent and for plant material at 35 percent.
The bill also prohibits buying cannabis outside Ohio. MedicateOH has reported on the prevalence of Ohioans traveling to Michigan where prices are cheaper. According to a Legislative Service Commission analysis, this bill’s passage will ban any cannabis that is not acquired from a licensed Ohio dispensary or cultivated at the adult-use consumer’s primary residence.
Revenue and local community distribution
SB 56 eliminates the cannabis social equity and jobs fund and program that was part of the voter-approved measure. The bill also outlines how cannabis excise tax revenue will be distributed. The current draft allocates 36 percent of revenue to the Host Community Cannabis Fund, supporting municipalities that host dispensaries. According to a report by the Statehouse News Bureau, the fund would distribute more than $80 million in tax revenue over the next two fiscal years to cities and towns with dispensaries.
Public safety and consumer protections
“Consumer protection” rules also appear throughout the conference version draft of SB 56. The bill bans packaging or branding that could appeal to children or resemble candy, toys, or other youth-oriented products, applying the restriction to both cannabis and hemp-derived intoxicating products. Advertisements must be at least 500 feet from schools and churches, and retailers selling intoxicating hemp products cannot sell tobacco or nicotine or allow individuals under 21 inside when such products are available.
SB 56 also clarifies public consumption rules for Ohioans, making it unlawful to smoke or be intoxicated in public spaces, and codifying OVI (operating a vehicle while impaired) standards related to THC.
How New Federal Guidelines Shaped SB 56
Ohio’s changes along with many other states’ comes as a result of a sweeping amendment included in a federal government-funding bill that was recently signed into law by President Trump. Congress redefined “hemp” under federal law — narrowing it significantly by imposing a cap of 0.4 milligrams of total THC per container.
Congress also excluded from the new hemp definition any cannabinoids synthetically produced or “manufactured outside the Cannabis sativa L. plant.” In practical terms, many hemp-derived THC products — especially beverages and edibles — exceed this new federal cap, even if they complied under the old definition. According to analysis from Libation Law Blog, the 0.4 mg/container rule “is functionally a ban for most ingestible hemp products.”
Federal Law vs. State Rights
By redefining hemp at the national level, Congress effectively eliminated the legal gray area or “loophole” in which many intoxicating hemp products were unintentionally made legal.
While the ban is indeed now law, there is one last potential lifeline for hemp: Congress included a one-year transition period for the order to go into effect. The stricter federal rule officially takes effect November 13, 2026, giving businesses and advocates their last chance to rally to make their cases to legislators.
Under the 2018 Farm Bill, states were explicitly empowered to regulate hemp more strictly than federal minimums if they wanted to. Courts have since upheld that states may impose tougher restrictions on intoxicating hemp products. This dynamic gives Ohio discretion in how to implement the federal framework. SB 56 represents Ohio’s decision to align directly with the new federal cap and definitions. This alignment helps prevent contradictory state and federal standards and avoids a market where federally illicit hemp products continue to be sold as legal hemp in Ohio.
At the same time, SB 56 preserves state regulatory control. Ohio’s Department of Agriculture and the Division of Cannabis Control will be responsible for drafting and enforcing rules around testing, licensing, labeling, sales, and transition timelines once the law takes effect.
Ohio’s Hemp Beverage Industry Hit Hard by New Law
Over the past several years, hemp-derived THC beverages have surged in popularity across Ohio due to the Farm Bill loophole. These drinks bridge the gap between cannabis and social drinking, offering a low-dose, predictable experience without alcohol. Their rise also created a new, inclusive market for adults who do not drink or who are seeking alternatives to alcohol for wellness, recovery, or lifestyle reasons.
Bars, breweries, liquor stores and live-music venues embraced these beverages quickly. Many carried hemp seltzers alongside beer and NA options, giving customers more choices. According to several hemp beverage makers interviewed for MedicateOH, the category expanded so fast because these drinks were sold in the same environments where people socialize — not tucked away in dispensaries.
According to one Cincinnati-area hemp beverage producer, the industry “took off because people wanted something that felt social but wasn’t alcohol.” Another producer told MedicateOH that hemp beverages “opened the door for wellness-minded adults who never saw themselves as cannabis consumers.”
Reactions from Ohio Businesses
The response across Ohio’s business community reflects the varying opinions between licensed cannabis operators, small hemp retailers, and the alcohol sector.
Licensed cannabis industry:
Many in the licensed cannabis industry view SB 56 as overdue. They argue it closes loopholes and improves consumer safety. According to the Ohio Capital Journal, an industry coalition expressed being “glad to see this legislation release the long-promised Host Community Fund dollars,” calling the bill an important realignment of Ohio’s cannabis framework.
In neighboring states, the hemp loophole is seeing legal challenges as well. Medical cannabis market licensee Jushi (Beyond Hello) filed multiple lawsuits in Pennsylvania and Virginia against hemp product retailers and distributors, including major companies like DoorDash and Total Wine, Jushi cited unfair business practices, saying these companies are illegally selling intoxicating hemp-derived THC products that directly undermine the state’s regulated medical marijuana market.
Small hemp retailers and local producers:
Some convenience and vape shop owners describe the hemp ban as a direct threat to their survival. As WOUB News reported, one shop owner worries about losing “customers who are just trying to get by,” especially those who rely on low-cost hemp products for pain relief or stress management.
According to one Dayton-area manufacturer, the bill could “wipe out entire product lines overnight,” while a Columbus retailer confidentially told MedicateOH that tighter rules are “necessary if Ohio wants to protect consumers and keep bad actors out.”
Another Columbus-area hemp shop owner gave us more specific insight into the issue. He argues that policymakers are blaming intoxicating hemp products for safety issues that actually stem from something deeper: unregulated “research chemical” compounds being mislabeled and sold as hemp in gas stations and convenience stores. According to our source, very little true hemp biomass is produced domestically anymore, so many questionable products aren’t hemp at all but chemical blends manufactured by unregulated companies, often overseas. He says reputable hemp retailers avoid these products, but the new rules punish compliant operators and their customers—many of whom rely on low-dose hemp products for sleep or pain relief. In his view, Ohio could simply enforce age limits, require testing, and license legitimate shops rather than banning products outright, because without addressing the real issue of mislabeled chemical compounds, bad actors will keep finding ways around the law.
Reactions from Ohio’s alcohol industry:
The alcohol sector has been watching the hemp beverage boom closely. Bars and breweries have reported that a growing segment of customers now choose hemp drinks instead of beer or seltzers. According to a Columbus-area brewer interviewed by MedicateOH, hemp beverages “cut into alcohol sales, especially among younger adults who are drinking less overall.”
Despite cutting into their beer sales, some breweries have become unlikely advocates for hemp. For some, it’s been a necessary added revenue stream during a time where alcohol is becoming less popular. One Cincinnati brewery franchise owner, Bobby Slattery of 50 West, defended hemp early this year at the Statehouse during hearings on SB 56 and related legislation. “We’ve witnessed firsthand how hemp-based beverages are filling a critical gap for consumers seeking a safe, regulated alternative to alcohol.”
On the other hand, some in the alcohol industry still see hemp as competition. This new definition will push THC beverages into dispensaries, creating regulations that breweries may be unable to participate in even if they wanted to. According to interviews conducted by MedicateOH, many in the alcohol sector believe hemp beverages are likely to disappear from bars if SB 56 is implemented as written, dramatically shrinking the product category and leaving alcohol sellers out.
What comes next for SB 56?
The conference report must now return to the Ohio Senate for a final vote expected in early December. If approved, SB 56 will go to Governor Mike DeWine for signature or veto.
Legal challenges and interpretation
Legal observers widely expect litigation and businesses are already threatening such action. Courts may need to clarify issues such as how total-THC is calculated, what qualifies as synthetic conversion, how transition timelines work, and whether certain products fall under the new federal definition of hemp.
Specific questions have risen regarding cannabidiol (CBD) products and cannabis seeds and clones, which previously would have been legal but now that remains unclear. MedicateOH received guidance from the Ohio Division of Cannabis Control (DCC) that these items should only be sold in dispensaries, but no Ohio dispensaries currently carry CBD-forward products or anything at all for home growers. Dispensaries also are the only places permitted carry THC beverages, but most lack refrigeration units or space for these types of products. It remains to be seen which products may become more scarce or removed from the market all together.
What this means for MedicateOH readers
For MMJ patients, consumers, and hemp businesses, the federal change made SB 56 largely unavoidable at the state level. Like other states, Ohio is now realigning with a new national baseline that sharply limits what counts as legal hemp. For those who rely on cannabis THC products, dispensaries will be your only option for legally purchasing in Ohio unless you grow your own at home.
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