Minnesota Beverage Manufacturers Sound Alarm Over Federal THC Ban
Minnesota’s thriving THC beverage and edible market is facing an existential threat from a recent federal legislation that bans products containing more than 0.4 milligrams of hemp-derived THC. The provision, tucked into a bill that ended the federal government shutdown, has sparked widespread concern among beverage producers and retailers, who warn that the ban would effectively shut down their businesses.
A ban on THC products would not only impact beverage manufacturers but also have a ripple effect on other businesses in the supply chain, including can manufacturers, distributors, and liquor stores. Matt Kenevan, owner of Dabbler Depot in St. Paul, emphasized that the ban would be devastating for his business, saying, “All we can do is hope there’s going to be a change that will allow us to do business as usual… Why wouldn’t you freak out if someone said you’ve got 12 months to live? That’s what this is.”
A variety of hemp-based-THC-infused beverages are sold at Dabbler Depot in St. Paul. Most are made in Minnesota. (Jess Fleming / Pioneer Press)
Impact on Local Breweries
For local breweries, producing THC beverages has been a vital lifeline to remain operational, especially as beer sales continue to decline. Surly Brewing founder Omar Ansari noted, “For a lot of us, these are the things we’re filling our tanks with; these are the things we’re keeping people employed with… We’ve put millions of dollars into an original facility that probably would’ve closed if not for THC beverages.” Drew Hurst, president and chief operating officer of Bauhaus Brew Labs, echoed this sentiment, saying, “If this goes through as it’s currently worded, there’s no chance we stay in business past that one-year mark.”
While the ban is set to take effect in one year, consumers should be aware that there is no change to the existing legal status of producing or purchasing hemp-derived THC beverages, according to Christopher Lackner, president and CEO of the national Hemp Beverage Alliance. The state Office of Cannabis Management will continue to license businesses, verify safety, and oversee all THC products, including beverages, during this interim period.
Regulations vs. Bans
The restriction on hemp-derived THC was a last-minute addition to the federal shutdown bill by Sen. Mitch McConnell, who claimed that unregulated THC products put children at risk. However, hemp industry leaders argue that a comprehensive regulatory structure, like the one in Minnesota, is a more effective solution than wholesale bans. Matt Schwandt, an attorney focusing on regulatory compliance at Maslon LLP, noted, “Minnesota has shown that with a proper regulatory scheme in place, hemp businesses can operate responsibly and keep products manufactured by bad actors out of the marketplace.”
Cole Huschied hoists another case of Bauhaus Brew Labs’ tetra, a hemp-based-THC-infused sparkling water, onto a pallet at the company’s Minneapolis brewhouse on Thursday, July 27, 2023. (Pioneer Press)
Next Steps
Following the ban, producers and retailers are rallying to build public awareness and push for hemp-derived THC products to be re-legalized before the provision takes effect in a year. To allow hemp-derived THC beverages to remain legal in the long term, federal legislation would be necessary to undo the ban. As Hurst emphasized, “At the end of the day, if people want these beverages to stay available and accessible, it takes the emails and calls to representatives… As doom and gloom as a lot of this is, there’s still a lot that can happen within the next year to change course.”
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