MINNEAPOLIS (AP) — Indeed Brewing has shifted its focus from beer to producing THC-infused seltzer. This new direction has been a crucial support for Indeed and other craft breweries as they’ve faced a decline in traditional alcohol sales over the past years.
But, this unexpected success may soon be cut short. A provision in the bill that recently ended the federal government shutdown seeks to ban THC-infused beverages and other hemp-based products that have seen a rise in popularity. As the cannabis industry, valued at $24 billion, prepares for this upcoming regulation set for November 2026, many in the sector are anxious about its impact.
“This is a big deal,” remarked Ryan Bundy, Indeed’s chief business officer. “It’s going to disrupt our breweries and the broader industry, not to mention the consumers who enjoy these products.”
Understanding the Origins of the Issue
Hemp and marijuana are essentially the same plant species, but differ mainly in their THC concentrations. Marijuana is cultivated to produce flowers with high THC levels, while low-THC hemp offers durable materials for products like ropes. The mantra from hemp advocates has long been “Rope, not drugs.” Since states began legalizing adult-use marijuana over ten years ago, there have been initiatives at the federal level based on the potential of hemp.
The 2018 Farm Bill allowed farmers to grow industrial hemp, effectively creating a new source of income, especially in states like Kentucky where Senate Majority Leader Mitch McConnell hails from.
The law’s definition of hemp, limited to less than 0.3% THC, has created a loophole. Even compliant products can contain enough THC to affect users. Furthermore, some companies have cleverly transformed non-intoxicating compounds like CBD into forms of THC that can get people high, often marketed in the form of gummy candies, chips, and various beverages that lack regulation. These items have become accessible, with many available at convenience stores, which sometimes even sell to minors.
A Tangle of State Responses
In response, several states have begun to enact regulations or outright bans on harmful hemp products. California’s Democratic Governor Gavin Newsom recently enforced a ban on the sale of intoxicating hemp products unless they fall under the state’s legal marijuana framework. Similarly, Texas is on a path to control sales, likely restricting them to individuals over 21. Meanwhile, Nebraska is considering harsher measures, such as criminalizing possession of hemp-derived THC products.
It’s not just a Southern or West Coast issue. Minnesota legalized THC-infused drinks and edibles for adults in 2022, and they’ve gained considerable traction. Local retailers, including major chain Target, have started offering these drinks.
Bundy observed that THC beverages have become significant for liquor stores and small breweries, contributing notably to their revenue.
Legislative Moves to Address Concerns
This unintended consequence is not what McConnell envisioned when he supported the 2018 farm bill. In light of growing concerns, he pushed for a federal ban to be included in the recent government funding bill to keep harmful products out of young people’s hands while allowing for legal hemp cultivation and CBD use.
Some industry insiders view this as an opportunity to level the playing field. Advocates from both sides, including prohibitionists, argue against allowing such products to remain in the market.
Fortunately for the industry, the ban won’t take effect for another year, leaving space for potential regulations that could enhance safety in the hemp THC market, such as age limitations on sales and stricter marketing rules.
“We remain optimistic that there’s time for reasonable regulations to take shape,” shared Jonathan Miller with the US Hemp Roundtable, pointing out that a health crisis wouldn’t allow for such a timeframe.
However, a federal ban could jeopardize over 300,000 jobs and significantly affect state revenues, with estimates suggesting potential losses of $1.5 billion in taxes.
Drew Hurst from Bauhaus Brewing expressed concern over the future of his business amidst this looming legislation. “If things go as written at this point, I don’t see any way Bauhaus can continue to operate,” he stated.
Looking Ahead
Several legislators have voiced intentions to pursue new regulations for the hemp THC industry. A proposed amendment by Republican Sen. Rand Paul aiming to dilute McConnell’s stipulations failed significantly in the Senate.
Democratic Senators Amy Klobuchar and Tina Smith from Minnesota are exploring possible avenues to benefit the industry. Klobuchar criticized the hasty integration of the ban into a sweeping legislative package, suggesting it could be beneficial for states to develop their regulatory systems, possibly inspired by Minnesota’s framework.
Kevin Hilliard from Insight Brewing stressed the urgency of finding solutions before the next planting season. “If farmers are hesitant, they might opt out of planting,” he warned.
