A sweeping rewrite of federal hemp policy, tucked into a government funding bill, is threatening to dismantle a multibillion-dollar industry. The effort has the potential to affect thousands of American farmers and retailers just as the federal government gears up to reopen.

In a sharp turn for U.S. agricultural policy, the Agriculture Improvement Act of 2018 (also known as the 2018 farm bill), which legalized commercial cultivation of hemp, may be effectively undone by a provision in the current spending package that would ban most intoxicating hemp-derived cannabinoid products.

Late Monday, the Senate approved a funding measure aimed at reopening the government that includes language redefining hemp and barring the sale of products containing certain THC compounds unless they meet strict new thresholds.

The Senate rejected an amendment proposed by Sen. Rand Paul, R-Ky., that would have stripped the new hemp-THC language, in a 76-24 vote to postpone acting on it.

Paul warned from the floor that "the bill, as it now stands, overrides the regulatory frameworks of several states, cancels the collective decisions of hemp consumers and destroys the livelihoods of hemp farmers," citing the fragile economic state of U.S. agriculture.

Senate Appropriations Committee summaries say the goal of the provision is to "prevent the unregulated sale of intoxicating hemp-based or hemp-derived products, including Delta-8, from being sold online, in gas stations, and corner stores, while preserving non-intoxicating CBD and industrial hemp products."

The revised definition of "hemp" under the upcoming law would limit "any intermediate or final hemp-derived cannabinoid products" intended for human or animal use to no more than 0.3% total THC on a dry-weight basis and no more than 0.4 milligrams total THC per container.

The change marks a reversal for Sen. Mitch McConnell, R-Ky., who championed hemp legalization in 2018 under the farm bill signed by President Donald Trump.

McConnell now says the earlier measure unintentionally opened a "loophole" exploited to sell intoxicating hemp-derived products with little regulation.

Industry groups anticipate severe consequences if the provision becomes law.

The U.S. Hemp Roundtable, representing growers, processors, and retailers, says the language could "wipe out" 95% of the current market in hemp-derived cannabinoids, imperiling up to 300,000 jobs and eliminating approximately $1.5 billion in annual tax revenue.

Supporters of the restriction argue the move addresses serious public safety concerns, including the sale of psychoactive hemp products with minimal oversight.

McConnell told the Senate the change would "keep the dangerous products out of the hands of children while preserving the hemp industry for farmers."

The timing of the measure adds urgency.

The funding bill also serves as a path to ending the federal government shutdown, meaning the hemp policy change is now tied to a must-pass vehicle. House consideration is expected this week, and if the language remains intact and Trump signs the bill, the policy shift could become law in short order.

Policy analysts say the issue underscores a broader conservative-framed concern about federal overreach into state-regulated agriculture and commerce.