For once, Washington did something quietly reasonable. In the rush to reopen the government, Congress and President Trump also shut down an experiment that had turned every gas station and supermarket into a quasi-dispensary: the hemp-THC loophole.

You may know the backstory. The 2018 Farm Bill carved out “hemp” from the federal definition of marijuana: any Cannabis sativa L. plant, and its derivatives, with no more than 0.3% THC by dry weight. That exception was written for rope, seed oil, and maybe some gentle CBD balm. It was not written so that a teenager could buy a 10-milligram THC soda with their energy drink.

But clever chemists and aggressive marketers noticed that the law only mentioned delta-9 THC. If you extracted CBD from hemp and chemically converted it to delta-8, HHC, THCP, and a whole alphabet of semi-synthetic cannabinoids, you could sell products that were fully intoxicating while still claiming to be "Farm-Bill compliant." You could even cram quite a bit of THC into a product whose overall dry weight kept the 0.3% ratio. 

The result was a national grey market. In much of the country, including places where voters had deliberately chosen not to legalize marijuana, consumers could still buy THC gummies, vapes, and seltzers in gas stations, corner stores, and, increasingly, mainstream retailers. Low-dose THC beverages became a lifeline for struggling breweries in some states, precisely because they could be sold outside the more heavily regulated dispensary system.  Packaging often mimicked candy; age checks were spotty; lab testing and dosage labeling were wildly inconsistent. State attorneys general from 39 states eventually begged Congress to shut this down.

The new funding bill finally does. The language bans "intoxicating hemp-based or hemp-derived products, including Delta-8," and sweeps in "intermediate hemp-derived cannabinoid products" that are the feedstock for this cottage chemistry industry. It also gives a one-year phase-out before the prohibition fully bites.  Industry groups warn that "95-plus percent" of current hemp sales will disappear—which is another way of saying that the vast majority of what has been sold under the "hemp" label has really been a backdoor marijuana market. 

There is some disagreement over how much non-intoxicating CBD will be affected; Senate summaries insist that industrial hemp and non-intoxicating CBD remain protected, while parts of the industry argue the language is over-broad.  That is exactly the sort of problem that can be sorted out over the one-year runway, preferably with real FDA rule-making instead of lobbyist-written "wellness" claims.

Why is this good policy? First, this re-aligns federal law with common sense. If a product is intoxicating because of THC, it should be treated like marijuana—and be subject to the same basic controls on age, marketing, potency, and road safety. It makes no sense for a high-school senior in a prohibition state to be carded for beer but to buy a psychoactive "hemp seltzer" next to the sports drinks with no serious oversight.

Second, the public-health evidence on cannabis is not what 2010-era optimism suggested. The National Academies’ major review concluded that cannabis use is likely to increase the risk of developing schizophrenia and other psychoses, with heavier and earlier use associated with greater risk. The CDC warns that adolescent cannabis use is linked to depression, social anxiety, and a higher likelihood of both temporary psychosis and long-lasting disorders such as schizophrenia.  An umbrella review in the BMJ finds convincing evidence that cannabis use is associated with poorer mental health and cognition and an increased risk of car crashes.  Meta-analyses suggest that drivers with cannabis in their system have roughly double the risk of being in a traffic collision.  A recent global review even suggests substantially higher risks of cardiovascular death and stroke among cannabis users. 

Third, closing the hemp loophole restores a measure of federalism. In states that have voted for legal, regulated marijuana, nothing in this bill touches the state-licensed markets. Instead, it protects states that have chosen not to legalize from having their decisions nullified by a congressional drafting error and a swarm of TikTok entrepreneurs. When 39 attorneys general—Democrats and Republicans—jointly demand federal action to prevent youth access and clean up a chaotic market, it is not "big government"; it is the states asking Washington to stop undermining them.

Finally, the hemp-THC ban complements, rather than contradicts, the administration’s ongoing review of whether to move marijuana to Schedule III.  The president has been explicit that he sees a difference between carefully regulated medical use and a free-for-all consumer market, especially where children are concerned. A coherent policy can both make certain kinds of access, such as access for research and medical purposes, and restrict the proliferation of gummy-bear narcotics at the gas pump.

It's good policy, but it's also good politics. If you last checked the polling on marijuana around 2018, you are operating with a stale mental model. Overall support for legalization remains high, but the trend line on the Right has turned. Gallup finds that national support for legal marijuana has dipped from a record 70% in 2023 to 64% today, with the entire decline driven by Republicans: their support has fallen from 53% in 2024 to about 40% this year, the lowest level in a decade.  Pew likewise reports that only 43% of Republicans and Republican-leaning independents favor full legalization for both medical and recreational use. 

In other words, Republican voters are moving away from sweeping legalization at the very moment when the hemp loophole was effectively imposing it through the back door. Closing that loophole does not mean sending police after adults with a joint; it means aligning policy with the instincts of parents who do not want their teenagers marinating in THC, and of communities that are exhausted by "ugly fake-pot shops," to borrow one commentator’s phrase, colonizing every strip mall.

The politics are even clearer if you look at who is angry. The loudest complaints are coming from hemp beverage startups, CBD conglomerates, and the broader cannabis industry that saw hemp-derived THC as a way to leapfrog slower state legalization.  When your opponents are an industry that has been selling quasi-legal narcotics as "wellness" products and state attorneys general are on your side, you are probably on solid ground.

Republican policymakers should own this victory, enforce it vigorously, and build on it. That is not prohibitionism. It is prudence, ordered liberty, and a politics that sides with families and public order rather than with the latest speculative asset class in the strip mall.

Policy News You Need To Know

#FamilyPolicy — Lyman Stone has published a new study on the link between housing, and in particular family-friendly housing, and fertility, at the Institute for Family Studies. Stone has gone on a one-man crusade (which we support, because we agree the evidence is compelling, and it matches up to our experience) for the idea that to make housing policy more pro-family the issue is not just "affordability" in general, but specifically speaking houses and detached houses (even if smaller) rather than apartments, which are anti-natal. Per his new research, while building more houses in general can reduce housing prices enough to boost fertility somewhat, building fewer but bigger homes reduces costs less but increases fertility by twice as much. Had “YIMBY for small apartments” been implemented in the 1990s, fertility today would be 0.03 children more per woman; but had “YIMBY for family-friendly units” been implemented, fertility would be 0.06 children more per woman, he calculates.

#Immigration — Striking, and good, news: for the first time since 2008, the US immigration court backlog has begun to shrink, reports Art Arthur at Commonplace, the magazine of American Compass. Immigration judges closed roughly 588,000 cases in the first three quarters of FY 2025 while only about 448,000 new cases were added. As you'd expect, this reversal is driven largely by tighter border enforcement under President Trump and new administrative measures that accelerate adjudications. The backlog had reached nearly 3.9 million pending cases at the end of FY 2024, with judges facing average dockets of more than 5,500 cases each, but the combination of reduced inflows, expanded use of temporary judges, and new funding in the OBBBA for enforcement and judicial hiring marks the first sustained structural progress in nearly two decades. Having a functioning government is good!

#Competence — On the "functioning government is good" front, however, we assume you've seen this… The White House announced that the October employment report will be released without the unemployment-rate figure and that the unemployment rate for October "may never actually be known." Additionally, the Bureau of Economic Analysis and other statistical agencies were also disrupted by the federal shutdown, prompting warning that some key data, including inflation and jobs, may never be published for October. How the heck did this happen? Basically, the shutdown. BLS and other statistical agencies within the Department of Labor and Census Bureau rely on continuous funding to carry out household and business surveys, process raw data and publish monthly employment and inflation statistics. Due to the shutdown, operations at these agencies were halted or severely constrained, which prevented the conduct of the household‐survey component needed to calculate the unemployment rate for October.  Because the establishment‐survey portion (which counts payroll employment) could still proceed in some fashion, the October report may be issued, but without the unemployment rate. Definitely don't think words such as "third world" or "Weimar"!

#FederalWorkforce #DOGE — In case you were wondering: the deal to end the shutdown also halts the administration’s severance-payment freeze for laid-off federal employees, rescinds thousands of reduction-in-force (RIF) notices, and restores pay obligations that had been suspended under the Anti-Deficiency Act, reports Federal News Network. The shutdown had paused severance for former employees—especially at HHS, which issued 10,000 RIF notices earlier in the year—creating temporary debts on earnings statements and heightening uncertainty. While the agreement will restart these payments and block new RIF actions through 30 January 2026, it preserves the administration’s broader workforce-reduction trajectory, which has already seen more than 211,000 departures through layoffs and incentives. So the big layoffs that could have been created during the shutdown are off the table, but the pre-shutdown DOGE-type reforms to slim down the Federal workforce are staying in place.

#TheScience #VibeShift — Nature Reviews Psychology, a subsidiary of the highly prestigious Nature science journal, has published a statement "encouraging authors to include a citation diversity statement to draw attention to citation imbalances and confirm that they made efforts to cite publications from a diverse group of researchers." In other words, it will reward researchers who use DEI criteria to decide who they cite or not cite. This is madness and obscurantism. The Federal government should step in.

#Infrastructure #RewardingFriends — A new Urban Institute review of federal transportation spending finds that four years after enactment of the Infrastructure Investment and Jobs Act, the law’s much-touted surge in infrastructure investment has materialized chiefly as higher highway spending, while transit and rail investment stagnated or declined in real terms—largely because construction-cost inflation erased much of the law’s nominal increases. Essentially, Republican states prioritized core infrastructure needs, mainly road and bridge construction, while blue states prioritized "soft infrastructure," i.e. social programs and NGOs. I.e. they stole the money. The study further notes that state and local governments in some cases reduced their own capital contributions even as federal dollars rose, weakening the law’s intended impact, and that overall non-highway investment—including mass transit—shows no measurable gain once inflation is accounted for.

#CFPB — As you may already know, Russ Vought is using his dark arts to starve the CFPB of funding. Douglas Holtz-Eakin explains. Essentially, the White Hous has adopted a new Office of Legal Counsel interpretation that the Dodd-Frank Act’s requirement that the agency draw funding from the Federal Reserve’s “combined earnings” refers only to profits, not revenues—profits the Fed has not had since 2022, leaving the CFPB without a viable funding stream. What's more, Vought, in his capacity as Acting Director of CFPB, has already notified Congress that he will not request funds and that the Bureau will shut down in early 2026 unless Congress intervenes, a step unlikely given divided government. Mixed feelings from your correspondent: the CFPB was a constitutional and bureaucratic monstrosity, with its powers impinging on all branches of government and its independent funding stream. (Live by the independent funding stream sword, die by the independent funding stream sword.) At the same time, having some sort of consumer financial protection authority in the Federal government is probably good politics and good policy.

#Obamacare — With the shutdown over and the question of subsidies and all things ACA returned to some degree of sanity, the folks at Issues & Insights have written a nice editorial recapping the failures of Obamacare. The authors note that the ACA has missed its core promises: costs have not slowed, premiums have not fallen, deficits have soared, and roughly 30 million adults still report difficulty affording or accessing care. Coverage gains have come primarily through expanded government dependence, with Medicaid enrollment rising from under 12% to nearly 16% today, while private coverage has stagnated. Meanwhile, insurers—rather than consumers—have benefited, with industry net income increasing from $4 billion in 2015 to $31 billion in 2020. Insurers' stock prices have also done very well. The piece argues that Democrats, by framing subsidy expiration as an “affordability crisis,” have inadvertently validated Republican critiques and created an opportunity for market-oriented reforms, including redirecting subsidies to individuals instead of insurance companies.

#Fellowship — Cool new fellowhip: the good folks at the Foundation for American Innovation, the Center for a New American Security, and the Horizon Institute for Public Service are launching the AI Policy Leadership Network, a part-time program bringing together experienced professionals from across government, military, think tanks, and industry to build ties among AI policy leaders. More info here.