2026 Candidate Guide: Industrial Hemp & Hemp-Derived Cannabinoids (HDC) in Wisconsin

Candidate Guide to Industrial Hemp and Hemp-Derived Cannabinoids (HDC) by Jay Selthofner

What is Industrial Hemp?

Industrial hemp is federally defined as cannabis containing 0.3% or less Delta-9 THC by dry weight. It is distinct from marijuana and is legal to grow, process, and sell under federal and state law.

Hemp can be used for:

  • Fiber and textiles
  • Grain and food products
  • Biofuels
  • Raw Flower Consumer Consumption
  • Cannabinoid extraction (CBD, THCa, Delta-8, etc.)

How Did Hemp Become Legal?

Federal Framework

The modern hemp industry was created under the Agricultural Improvement Act of 2018.

This law:

  • Removed hemp from the Controlled Substances Act
  • Federally legalized hemp and its derivatives
  • Allowed interstate commerce of hemp products
  • Gave states authority to regulate hemp production

Key point: Any cannabinoid derived from legally grown hemp is federally lawful if it meets the Delta-9 THC threshold.

Continuing refinement of federal law with the DEA recent announcement that they have officially classified HHC as a Schedule I controlled substance and assigned it its own DEA drug code.

Wisconsin Law

Wisconsin aligned with federal law through:

  • 2017 Wisconsin Act 100 (pilot program)
  • 2019 Wisconsin Act 68 (full legalization and USDA compliance)
  • 2022 Wisconsin state-run program was not renewed or adequately funded, resulting in a transition to the USDA Domestic Hemp Production Program.

These laws:

  • Authorized hemp cultivation and processing
  • Established state oversight via DATCP
  • Enabled the development of a hemp-derived product market
  • Removed hemp from the Wisconsin Controlled Substances Act (Wisconsin Statue 94.55)

What Are Hemp-Derived Cannabinoids (HDC)?

HDC products are cannabinoids extracted or derived from legal hemp, including:

  • CBD
  • Delta-8 THC
  • THCa (non-psychoactive in raw form)
  • Other minor cannabinoids

Because they originate from legal hemp—not marijuana—they exist in a federally legal category, even when some products may have intoxicating effects.

How the HDC Market Developed

The HDC market emerged from three factors:

  1. Federal legalization of hemp derivatives (2018 Farm Bill)
  2. Advancements in extraction and conversion technologies
  3. Consumer demand for accessible cannabinoid products

This created a fast-growing retail sector including:

  • Hemp stores, smoke shops and specialty retailers (dispensaries)
  • Wellness shops
  • Beverage and edible manufacturer

Economic Impact

  • Thousands of small businesses across Wisconsin 
  • Job creation in retail, processing, and agriculture (3,500 jobs)
  • New revenue streams for farmers and entrepreneurs ($700 million in annual production)
  • Increased local and state tax revenue (hemp sales are subject to general sales tax)

Current Policy Reality

Despite its legal foundation, the HDC industry operates under ongoing regulatory uncertainty. This creates real challenges for businesses, consumers, and lawmakers alike, while deferring or stifling additional capital investment and hiring.

Existing tensions include:

  • Legislative proposals at both state and federal levels that seek to restrict, ban, or add new regulations to products already sold legally
  • Persistent confusion between hemp and marijuana laws among consumers, retailers, and policymakers
  • Lack of consistent product testing, labeling, and licensing standards across states

What Candidates Should Know

  • The hemp industry is already established in Wisconsin
  • Many businesses are operating in good faith under existing law
  • Overly broad bans could destroy small businesses overnight
  • Smart regulation—not prohibition—is the path forward

Policy Approach: Protect & Regulate

Candidates should support policies that:

Protect

  • Existing hemp businesses and farmers
  • Legal clarity under current statutes
  • Interstate commerce rights

Promote Responsible Regulation

  • Age restrictions for intoxicating products
  • Product testing and labeling standards
  • Clear definitions (THCa vs. Delta-9 THC)
  • Reasonable licensing—not overregulation

Bottom Line

Hemp-derived cannabinoids are not a loophole—they are the result of intentional federal and state policy.

Wisconsin has an opportunity to:

  • Protect a growing industry
  • Provide regulatory clarity
  • Support small businesses and farmers
  • Protect Consumers