A provision in South Dakota's industrial hemp bill will eliminate an entire product category—and most business owners haven't heard about it yet.
Most South Dakota manufacturers working with hemp products don't realize that a quiet provision buried in SB39 is about to reshape their business. Starting January 1, 2027, five specific cannabinoids will no longer be legally defined as industrial hemp products in the state—which means any company currently making, selling, or distributing them faces a hard deadline to pivot or exit those product lines entirely.
South Dakota's SB39, which revises industrial hemp provisions, contains a provision in Section 1 (Page 1) that narrows the statutory definition of what counts as a lawful "industrial hemp product." Specifically, it excludes five chemically derived cannabinoids: delta-8-THC, delta-10-THC, THC-O, HHC, and THCP.
This isn't a gray area or a guideline. By removing these compounds from the legal definition, the bill effectively bans their manufacture, distribution, and retail sale in South Dakota—even if they're derived from federally legal hemp.
The effective date is January 1, 2027 (Section 22, Page 4). That gives businesses roughly two years to make decisions.
Any South Dakota manufacturer, distributor, or retailer currently working with delta-8, delta-10, THC-O, HHC, or THCP products needs to pay attention. This includes:
If your product line includes any of these five cannabinoids, you have three realistic options: reformulate to use only compliant cannabinoids, write off existing inventory, or discontinue those product lines before the deadline.
January 1, 2027 isn't far away in manufacturing terms. Reformulation takes time—testing, regulatory review, supplier relationships, packaging changes, and marketing adjustments. Inventory sitting in warehouses or retail shelves will need to be liquidated or destroyed. Customer relationships built around these products will need to shift.
Waiting until late 2026 to act isn't a strategy. Businesses that start planning now have time to explore alternatives, test new formulations, and communicate changes to customers and retail partners.
If you manufacture, distribute, or retail hemp products in South Dakota, the first step is confirming whether your current product lines include any of the five banned cannabinoids. If they do, document your current inventory, review your supply chain, and begin evaluating reformulation options or exit strategies.
The text of SB39 is available through the South Dakota Legislature's official website. A detailed, business-specific resource on how this provision affects different types of hemp manufacturers is available for free.
Source: South Dakota SB39, Section 1 (Page 1) and Section 22 (Page 4).