WASHINGTON – The American beer industry has taken aim at makers of THC-infused beverages and edibles in a campaign that could have reverberations in Minnesota, a state that sparked a national explosion in the sales of hemp-derived beverages.
The beer industry, which has seen sales drop — especially among younger consumers — has joined the marijuana industry in seeking federal regulation of THC-infused drinks, which are now only regulated by state laws.
Minnesota Attorney General Keith Ellison recently shocked the hemp and THC beverage industries by signing a letter with 38 other state attorneys general to congressional leaders that urged Congress to clarify the federal definition of hemp.
The letter said “bad actors” have exploited a “loophole” in the 2018 Farm Bill that allowed the sale of highly potent, unregulated THC products that pose a threat to the general public and especially to children.
Related: Cities test limits of Minnesota cannabis law, exposing legal gray areas
“Unless Congress acts, this gross distortion of the 2018 Farm Bill’s hemp provision will continue to fuel the rapid growth of an underregulated industry that threatens public health and safety and undermines law enforcement nationwide,” the letter said.
At a recent conference sponsored by Semafor, Brian Crawford, CEO of the Beer Institute, a trade association that lobbies for the industry, said beer has been heavily regulated by federal agencies. He said brewers are subject to marketing, advertising and label regulation and must seek federal approval for their formulas.
There are age restrictions as well that are strictly enforced, Crawford said, and beer sales are prohibited to anyone under 21.
Yet Crawford said there are no federal restrictions on THC-infused products. He said those “bad actors” in the THC beverage and gummy industries are packaging and marketing products in a way to appeal to children, including THC Nerd candies that are ultra-high potency THC edibles.
“You will never see a beer ad that features Santa Clause or the Easter Bunny,” Crawford said.
A ‘natural social tonic’
An amendment approved in the House Agriculture Committee as it considered a massive new farm bill last year would alter the federal definition of legal hemp “to only include naturally occurring, naturally derived and non-intoxicating cannabinoids.”
That means that any cannabinoid manufactured outside a hemp plant would be outlawed, criminalizing the production of hemp-based gummies, beverages and other edibles, as well as oils, soaps and other products made from hemp.
Approved in 2022, a Minnesota state law allows for the production and consumption of hemp-based edibles and other products. But the hemp amendment in the now-stalled House Farm Bill would make these products illegal under federal law.
Partisan gridlock in Congress has made it unlikely there would be a new Farm Bill this year. So, the fight over THC-infused products has shifted to the agriculture spending bill, one of the appropriations bills Congress is most likely to approve when the federal shutdown is over.
Jake Bullock, cofounder of Cann THC-beverages that market themselves as “all natural social tonics,” said he joins Ellison and the other state attorneys general in supporting regulations that prevent “bad actors” from making very potent synthetically derived products and the marketing of any THC-infused products to children.
But he also said overly broad regulations would hurt a $30 billion industry that employs 330,000 Americans.
“We would be dumping the baby out with the bathwater,” Cann told MinnPost.
Cann’s success exemplifies the exponential growth in the multi-billion-dollar market of intoxicating substances derived from hemp.
Bullock said he began his business in Venice Beach, California, then produced his drinks in Minnesota after the state passed its law allowing the sale of hemp-infused products.
He now sells his drinks in about 30 states and Cann products can be found in many liquor stores and other retail outlets in Minnesota. Recently that has included Target.
“The reason consumers like the products is that they work a lot like alcohol,” Bullock said. “If you like it you can have another one an hour later.”
Bullock said drinking several cans of Cann can become intoxicating, but there’s no morning-after hangover. He also said many heavy drinkers have cut back on their alcohol consumption in favor of his beverages.
Bullock also said Generation Z favored his drinks over alcohol because they socialize differently than older Americans and are less likely to spend money in bars.
A need to address ‘bad actors’
The potency in a THC-infused drink depends on how many milligrams of THC the product contains. State laws vary. In Minnesota, it’s limited to no more than 10 milligrams. Other states are stricter. Virginia and Connecticut cap it at 2 milligrams.
Yet Crawford said “bad actors” make drinks with as much as 200 milligrams of THC “in a 12 ounce can.”
“There is a need to address that,” he said.
Bullock, who also spoke at the Semafor event, told MinnPost he would agree to capping the THC levels nationally to about 5 milligrams. He also said he was OK with doing away with synthetic THC – lab-made chemicals designed to mimic the effects of delta-9 THC, the main psychoactive compound in natural cannabis.
He said he thinks Ellison “has been misled” into signing a letter that asked Congress to “act decisively to clarify the (2018) Farm Bill’s definition of hemp to ensure intoxicating THC products are taken off the market.”
Analysts say that would kill Minnesota’s THC-infused drink and edibles market.
Ellison attempted to clarify his position in a statement entitled “Protecting Minnesota’s THC Industry”. In it, Ellison said he did not want the ban of all THC-infused products but sought federal regulations to “help prevent out-of-state companies from ignoring Minnesota’s carefully crafted THC regulations and selling harmful products in our state.”
“Minnesota’s legalization of THC edibles was smart and safety-conscious, and unfortunately the loophole created by the federal government is anything but,” Ellison wrote. “As a result, there are highly potent THC products entering Minnesota that are being marketed to children, and I won’t stand by and let out-of-state businesses prey on young Minnesotans.”
Yet public comments on the attorney general’s statement pointed out that the letter he signed would also ban THC-infused products that are intoxicating and would outlaw a lucrative industry in Minnesota.
Related: Minnesota raises $10 million in first year from hemp-derived THC sales, but isn’t the industry bigger than that?
“The letter you signed explicitly calls for ‘prohibition on products containing intoxicating levels of THC — of any kind and no matter how it is derived,’” one commenter wrote.” Your letter would effectively unwind all of the good work Minnesota legislators have done over the last five years, recriminalize THC access for people looking to move past alcohol, and crush one of the few lifelines brewers have left.”
While the beer industry may seek a crackdown on THC beverages, small brewers, facing a shrinking market, are increasingly involved in the hemp beverage market, creating alcohol-free THC-infused drinks.
Meanwhile, Sen. Rand Paul, R-Kentucky, is urging Congress to delay any changes for 18 months to allow for a comprehensive study on the best ways to regulate the hemp industry.
It’s not clear how Paul’s colleagues in Congress will respond.
The post Beer industry joins renewed push for feds to rein in THC-infused drinks, threatening lucrative Minnesota industry appeared first on MinnPost.
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