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New Regulations Shake the Hemp Industry

Iowa’s cannabis and hemp product landscape has drastically changed in 2024 with the passing of House File 2605, a law that brings significant updates to the state’s hemp regulations. Passed in the Senate with a 31-18 vote and overwhelmingly in the House by a 79-16 margin, the new law aims to tighten restrictions on the sale and production of THC-infused products in Iowa. While the legislation is aimed at promoting public health, particularly protecting minors, the business implications have been substantial, affecting retailers, manufacturers and consumers alike. 

Key Provisions of the Law 

House File 2605 updates Iowa Code Section 204, also known as the Iowa Hemp Act, with several pivotal changes: Age Restrictions: The sale of consumable hemp products, including those containing THC, is now limited to individuals 21 years or older. Before this update, Iowa had no official age restrictions, although many retailers voluntarily enforced their own limits. 

THC Limits: The law caps THC content to four milligrams per serving and ten milligrams per container, a significant reduction that many retailers find challenging to navigate. 

Prohibition of Synthetic THC: The production and sale of products containing synthetic THC are now prohibited in Iowa. 

Warning Labels: Products must now carry a warning label similar to those found on alcohol, alerting consumers of the risks associated with THC.

 These measures are intended to regulate the growing hemp industry and curtail underage access, but many argue that the law fails to address the realities of cannabis consumption and could push customers to seek alternatives in other states.

Impact on Local Dispensaries

A visit to Despensary The Finest Plant Medicine, a local Des Moines shop that previously thrived selling hemp and THC products, highlights profound changes that have taken place. Kyle, an employee who has been working at the dispensary for ten months, revealed that the shop has experienced a drastic decrease in customers since the law took effect. 

  “More than half of our customers used to come in looking for THC products, but now they’re either frustrated or confused by the changes,” Kyle said. 

The dispensary was forced to remove $8,000 to $10,000 worth of THC products from their shelves at just one location, as the products no longer complied with the new limits. 

To adapt, many retailers like Despensary are shifting their focus towards other natural products, such as recreational and health-and-wellness mushrooms, but even this pivot can only go so far in maintaining their customer base.

Confusion Among Consumers 

The new restrictions have not only hurt businesses but have also left consumers bewildered. Many believe that the law is contradictory. For instance, while THC content per package is limited, there is no restriction on how many packages a person can purchase at once, leading to customers buying multiple packages to achieve the same dosage they were accustomed to before. 

According to Kyle, customers often ask, “Is there a limit now?” and are surprised to learn that while product sizes have been slashed, they can still buy as many packages as they want.

 “It doesn’t make sense to them and we’re losing business because of it,” Kyle said. 

Economic Impact 

The financial repercussions of House File 2605 extend beyond dispensaries. Kyle mentioned that some local businesses, like American Shaman and a few retail stores in Ankeny have already closed due to their inability to keep up with the law’s demands. Larger companies with multiple locations and parent companies, like Desensary with a Kansas City-based parent, may have more flexibility. However, smaller locally-owned businesses are feeling the strain. 

Even industries not directly tied to cannabis, such as breweries, have been impacted. According to Kyle, local breweries like Lua and Big Grove had plans for expanding into the cannabis space but are now reconsidering their moves due to the new legal landscape. 

A Call for Legislative Change  

As the dust settles from Iowa’s THC crackdown, businesses and consumers alike are left questioning the long-term effects. Many, like Kyle, believe the law has done little to alter the reality of cannabis consumption in Iowa. Instead of reducing THC use, it has merely driven consumers out of state or forced them to spend more money to achieve the same effects.  

Kyle expressed hope that lawmakers will reconsider their stance.

For now, Iowa’s hemp retailers are doing what they can to adapt, but without further changes to the law, many fear that the state’s once-thriving cannabis industry could shrink dramatically.