Nebraska Pushes New Hemp Edible Restrictions Despite Failed Ban

What happened

Nebraska's Department of Agriculture issued a notice of proposed regulations targeting consumable hemp products, hemp-derived THC, and related substances. The rules would bar these products from being included in food items, which would effectively shut down a significant portion of the state's hemp edible market.

The proposal follows an executive order from Governor Jim Pillen directing state departments to take action against the products. It also comes after LB 316, a legislative effort backed by Attorney General Mike Hilgers to ban most consumable hemp products in the state, stalled in May 2025 and failed to pass.

The pushback

State Senator John Cavanaugh filed a formal complaint with the Executive Board of the Nebraska Legislature, arguing that the Department of Agriculture has no authority to issue these regulations. Cavanaugh's position is that the department is acting outside its legal mandate by implementing restrictions that the legislature explicitly declined to pass.

"They're just following the direction of the governor and not the law," Cavanaugh said, according to Nebraska Public Media. His complaint was sent to Senator Ben Hansen, chair of the Executive Board, who acknowledged that Cavanaugh raises legitimate concerns and referred the matter to the Agriculture Committee for further review.

The legal backdrop

Under the 2018 Farm Bill, hemp and hemp-derived THC products with less than 0.3% Delta-9 THC are not classified as federally controlled substances. Nebraska adopted the same policy in 2019 through the Nebraska Hemp Farming Act. Then in 2024, voters approved a medical cannabis program and created the Nebraska Medical Cannabis Commission, which was given authority to regulate these product categories.

Cavanaugh's argument is that because the Medical Cannabis Commission was given regulatory authority, the Department of Agriculture is overstepping by attempting to issue its own rules. Hemp-derived products have been legal under both federal and state law since 2019, and the businesses selling them operate within the existing legal structure.

What's at stake economically

Cavanaugh emphasized the economic impact of shutting down compliant hemp businesses. The industry generates roughly $10 million in Nebraska sales taxes annually and employs an estimated 2,000 people across the state. He pointed out that the timing is particularly bad given Nebraska's ongoing budget shortfall.

"When we are in this budget crunch that we are talking about, shutting down all these legitimate businesses that are operating under Nebraska law will have a detrimental effect on sales tax and other taxes that the state derives from these businesses," Cavanaugh said.

Why this matters beyond Nebraska

Nebraska is not the only state trying to restrict hemp-derived edibles through executive or regulatory action rather than legislation. With the federal hemp law changing in November 2026, states are taking different approaches to how they want to handle the products that were previously sold under the 2018 Farm Bill loophole. Some are waiting for federal enforcement. Others, like Nebraska, are trying to move faster through state-level regulation.

The Cavanaugh complaint is an early test of whether agency rulemaking can substitute for legislation that lawmakers declined to pass. If his challenge succeeds, it could slow similar regulatory efforts in other states. If it fails, expect more governors and state agencies to take executive action on hemp edibles without waiting for their legislatures.