The Regulatory Environment Is Clearing the Market
Industrial hemp fiber and carbon remain federally compliant. Intoxicating hemp products do not.
Hemp regulation in 2025 is eliminating gray-market THC products while reinforcing the legal framework for non-intoxicating industrial applications. This creates clarity for manufacturers, investors, and regional partners: industrial fiber and carbon feedstocks face zero regulatory threat.
AFG operates exclusively in the industrial materials lane—no THC, no consumables, no regulatory exposure.
Federal Regulatory Framework
| Statute | Status | Impact on Industrial Fiber |
|---|---|---|
| 2018 Farm Bill (Hemp Legalization) | Active, extended through 2026 | Defines hemp as cannabis with ≤0.3% THC; authorizes industrial cultivation & processing |
| HEMP Act of 2025 (S.2112) | Pending; USDA drafting implementation | Proposes narrower definition targeting intoxicating products. AFG monitors USDA rulemaking to ensure industrial fiber and carbon applications remain explicitly protected. |
| FY26 Agriculture Appropriations (Harris Amendment) | Failed committee vote | Would have banned intoxicating hemp-derived products; industrial fiber/carbon uses were not targeted |
Federal hemp regulation is evolving rapidly. The HEMP Act of 2025 aims to restrict intoxicating hemp-derived THC products while maintaining the legality of industrial hemp under the 2018 Farm Bill framework. The USDA is currently tasked with drafting implementation rules.
AFG's position:
We support regulatory clarity that separates industrial applications (fiber, carbon, construction materials) from intoxicating consumables
Our supply chain produces materials for composites, filtration, and energy storage—applications explicitly outside the scope of THC-related restrictions
We engage with USDA rulemaking processes to ensure industrial hemp fiber and carbon materials remain classified as lawful agricultural commodities
Until final USDA rules are published, AFG operates under the 2018 Farm Bill framework, which explicitly authorizes industrial hemp cultivation and processing for non-intoxicating applications.
States Are Banning Intoxicating Hemp,
Not Industrial Hemp
| State | Legislation | Effective Date | What It Bans | Impact on Industrial Fiber/Carbon |
|---|---|---|---|---|
| California | AB 8 (Hemp-Derived THC Ban) | January 1, 2028 | Delta-8, delta-10 THC, synthetic cannabinoids, inhalables, consumables | Zero impact—industrial hemp fiber and carbon processing excluded |
| Texas | SB 2024 (Hemp Vape Ban) | September 1, 2025 | All hemp-derived cannabinoid vape products | Zero impact—fiber, carbon, and construction applications unaffected |
| Federal Pressure | 39 Attorneys General Letter | October 2025 | Calls for federal ban on intoxicating hemp products | Reinforces industrial hemp's regulatory safety |
California's AB 8 will shut down over 100 THC product manufacturers and eliminate 18,500 jobs in the intoxicating hemp sector by 2028. Texas SB 2024 has already banned hemp-derived vape products as of September 2025. Meanwhile, industrial hemp fiber and carbon applications remain fully legal in both states.
This is market consolidation in real time—regulatory bodies are removing speculative, intoxicating products while preserving infrastructure-grade industrial materials.
Why This Benefits AFG's Position
Regulatory Clarity = Reduced Risk for Manufacturers & Investors
The elimination of gray-market THC products removes the primary regulatory uncertainty that has made institutional capital and Fortune 500 procurement teams hesitant to engage with hemp supply chains.
AFG's industrial focus means:
No THC exposure: Zero risk of product bans or recalls
Federal compliance: Fiber and carbon feedstocks align with USDA hemp regulations and IRA domestic content requirements
State-level safety: California, Texas, and federal restrictions do not apply to non-intoxicating industrial materials
Supply chain defensibility: Manufacturers sourcing AFG materials face no regulatory reclassification risk
The regulatory crackdown on intoxicating hemp is not a threat to AFG—it's a competitive moat. While thousands of THC-focused businesses face shutdowns, AFG operates in the fully compliant, institutionally defensible industrial materials lane.
What Remains Legal & Supported
These applications are explicitly protected under the 2018 Farm Bill and are not subject to THC-related restrictions:
Automotive composites & NVH systems
Construction panels & insulation
Filtration media & activated carbon
Battery anodes & energy storage precursors
Textile fiber & paper products
Phytoremediation & carbon sequestration
AFG's processing infrastructure serves these markets exclusively.
Regulatory Compliance Documentation Available Upon Request
For manufacturers, procurement teams, and government contractors evaluating AFG materials for FEOC compliance, THC testing protocols, or domestic content verification.
Compliance documentation is provided as part of the RFQ/RFP qualification process. Please visit the Manufacturers section.
