The federal definition of hemp changes on December 11, 2026. P.L. 119-37, signed November 12, 2025, shifts the legal THC standard from delta-9 alone to total THC, including THCA. A subsequent law, P.L. 119-103, delayed most of those provisions from November 12 to December 11.
Products that meet the current threshold, including high-potency delta-9 and most delta-8 items, will no longer qualify under the new standard. Delta-8 products derived from synthetic processes are already excluded under a separate provision that took effect November 12. The hemp insurance coverage those products carry will not simply disappear, but how carriers intend to treat them is not yet settled.
Lee Woodruff (pictured), vice-president of cannabis at Jencap, has been in direct conversation with carriers about how existing policies will respond. He identifies the gaps in existing hemp insurance coverage, the policy language that demands immediate attention, and what brokers should address ahead of the December 11 deadline.
“The insurance policy doesn’t necessarily just go away, but now we have to understand how the carrier is going to treat that product,” Woodruff said.
That question applies across several scenarios the rule change leaves unresolved. Products legally manufactured but not yet sold fall into a gray zone. So do products already on retailer shelves and goods in consumers’ hands as of December 11.
Woodruff points to one scenario in particular. A consumer legally buys a hemp-derived THC product before the rule takes effect, holds onto it, and consumes it after the rule takes effect. If that consumer later alleges bodily injury, the coverage response is unclear. The product was manufactured and sold legally. The consumption and the alleged injury would not be.
“That’s the type of scenario where I don’t want to guess,” he said. “I want to have that conversation with the carrier ahead of time and understand how they intend for their policy to respond.”
To manage the uncertainty, Jencap has been extending some policies to December 31, 2026, rather than writing standard 12-month renewals. The rationale, as Woodruff explained, starts with what is still unknown.
“There are still a lot of moving pieces,” he said. “These businesses may have to change the products they’re manufacturing or selling, and the carriers may also change how they want to insure the exposure.
“Rather than locking everybody into an annual renewal based on today’s information, the short extension gives us an opportunity to look at the account again once we better understand what the insured is going to be selling and what the carrier is willing to cover.”
“A company might say, ‘We’re just going to stop selling that product before the deadline, so we’re good,’” Woodruff said. “From an insurance standpoint, I’m not sure that’s where the conversation should end.”
The logic feels sound. Stop selling before December 11, and the exposure stops with it. For businesses carrying claims-made product liability coverage, it does not work that way.
Woodruff explains that on a claims-made policy, coverage responds when a claim is filed, rather than when the product was sold. Products already manufactured and sold are still in the market, including in warehouses, on retailer shelves, and in consumers’ hands. A claim from one of those products could arrive months or years after an insured stopped selling it.
“If the product liability policy is claims-made, stopping sales doesn’t eliminate the possibility of a future claim from one of those products,” Woodruff said.
That gap raises questions about tail coverage, discontinued products coverage, and what happens to prior exposure if the insured changes carriers. Woodruff notes that the prior-products dimension is the part of the hemp insurance coverage conversation most likely to go unaddressed.
“I think brokers need to be talking about both sides of this,” he said. “What are you going to manufacture and sell going forward, and how are we protecting you from the products you’ve already sold?”
That holds true, he added, even among cannabis specialists who are actively following the rule change.
Product liability is the first policy that needs review, according to Woodruff. The language around cannabis, hemp, THC, and controlled substances carries the most direct exposure after the rule change. Within product liability, Woodruff flags one area brokers may overlook.
“I think another really important part of this that could get overlooked is tail coverage or discontinued products coverage,” he said.
Beyond those two, Woodruff outlines a broader set of policy language items to examine. For product liability policies, that includes:
Product liability is not the only line that warrants attention, Woodruff adds. Property, stock, cargo, business income, recall, and excess coverage all need review in the context of the rule change.
Woodruff argues that before any carrier conversation can happen, brokers need to map what their hemp clients are currently selling. That means knowing which products are being discontinued, reformulated, or retained. It also means knowing whether THC concentrations are being adjusted and what inventory remains in warehouses or at retailers.
“I’d start by figuring out exactly what they’re selling today and what they expect to be selling after the rules change,” Woodruff said. “Are they going to discontinue certain products? Reformulate them? Change the amount of THC? Move into different cannabinoids? Is there inventory already sitting in warehouses or at retailers?”
Once that picture is clear, brokers need to bring carriers into the conversation rather than assume how existing policies will respond. Woodruff distills that conversation into three sets of questions:
The short extension to December 31, 2026, that Jencap has been using on some accounts addresses the same problem. It creates space for those answers to come in before a renewal is locked in.
“It gives us an opportunity to see how the insured’s products and operations change and then structure the renewal around what they’re actually going to be doing going forward,” Woodruff said.
The alternative, Woodruff argues, carries more risk than the conversation itself. “To me, the worst thing a broker can do right now is assume the existing policy is going to handle everything,” he added.
“I’d rather have the conversation with the insured and the carrier now and understand where they both stand. Even if the answer today is, ‘We’re still working through it,’ at least everyone knows there’s an issue that needs to be addressed.”
