Hemp and low-dose delta-9 tetrahydrocannabinol (THC) beverages continue to flood the marketplace. Depending on the state, these products can be purchased in liquor stores, gas stations, grocery stores, bars, restaurants, and/or online. Despite their rise in popularity and presumed legality under the 2018 Farm Bill, some state agencies have recently made headlines with decisions to ban these products from being sold by alcohol-licensees in their states.

In this blog post, we walk through some recent examples of how different state alcohol agencies are handling the regulation of hemp and low-dose THC beverages.

Understanding Hemp and Low-Dose THC Beverages

As we mentioned in our previous blog post on this topic, hemp and low-dose THC beverages are nonalcoholic beverages infused with delta-9 THC derived from hemp, distinguishing them from traditional marijuana products. The 2018 Farm Bill legalized hemp and its derivatives, provided they contain no more than 0.3% THC on a dry weight basis. This legal gray area has led to a surge in products that can deliver psychoactive effects while being marketed alongside or as alternatives to alcohol.

State-by-State Overview

The rise of hemp and low-dose THC beverages in the market has prompted state alcohol, health, agriculture, and cannabis agencies to review their regulatory frameworks regarding the sale and distribution of these products. Each state approaches the issue differently, which has resulted in a patchwork of regulations across the country.

• California: The California Department of Alcoholic Beverage Control (ABC) has taken a strict stance on hemp beverages containing THC. On October 3, 2024, the ABC issued an industry advisory stating that alcohol licensed businesses may not carry, market, offer for sale, or sell any industrial hemp products intended for human consumption (including food, beverages, and dietary supplements) that contain a detectable amount of total THC or other intoxicating cannabinoids. Any businesses that do not comply will subject the licensee to disciplinary action. To date, the ABC has already begun enforcement efforts. Recently, ABC agents have been reported visiting licensed locations across the state and seizing hundreds of products from several licensees, removing them from shelves and preventing them from being sold.
• Massachusetts: On May 30, 2024, the Massachusetts Alcoholic Beverages Control Commission (ABCC) issued an advisory in connection with the joint notice issued by the Massachusetts Department of Public Health (MDPH) and the Massachusetts Department of Agricultural Resources (MDAR) regarding the sale of beverages and food with hemp-derived cannabinoid extracts (CBD) or THC. The ABCC made clear that it is unlawful to manufacture and/or sell food or beverages containing CBD and/or THC. This applies to alcoholic and nonalcoholic beverages. Under the advisory, the ABCC directed that products need to be removed immediately, and anyone found in violation faces potential revocation or suspension of its license. The joint notice and advisory each make clear that they only apply to hemp-derived CBD and THC products and are separate from marijuana products regulated by the Massachusetts Cannabis Control Commission.
• Minnesota: In contrast to California and Massachusetts, Minnesota explicitly allows the sale of hemp and low-dose THC beverages and provides a clear legal framework for businesses and consumers alike. Beverages can be sold in stores that register with the state prior to sale.
• Missouri: In August 2024, an executive order was entered banning intoxicating hemp products in the state. The order threatened penalties for any establishment with a Missouri liquor license or that sells food products if they sold hemp-derived THC beverages. The ban also extended to companies producing these beverages in the state. The hemp industry quickly challenged the order by arguing that it was an overreach, and as a result, the regulators went back and limited the scope of the ban. Instead of embargoing products because they contained hemp-THC, regulators have focused on identifying “misbranded” products.
• New Jersey: Recently, Senate Bill No. 3235 was signed temporarily banning the unlicensed sale of hemp products in New Jersey. The bill bans the sale of any hemp product containing more than 0.3% THC, including delta-9 THC. The bill also mandates that the products are regulated by the New Jersey Cannabis Regulatory Commission (NJCRC) and that manufacturers and retailers of these products must obtain a license from the NJCRC. Initially, the bill required that all intoxicating hemp products be pulled from store shelves until the NJCRC established new regulations. However, a federal judge recently issued a temporary reprieve, allowing these products to remain on shelves while the court reviews the case.
• Texas: The Texas Senate Committee on State Affairs has been evaluating state laws and regulations surrounding THC-infused beverages. Currently, it is legal to sell hemp-infused beverages in Texas with the proper licensing. Bars and other establishments with the proper licensing can also sell these drinks, either as packaged products or mixed with alcohol. However, the Texas Alcoholic Beverage Commission (TABC) has noted that there are no prepackaged, alcoholic THC-infused products on the market. Currently, the Senate Committee is considering potential legislation to address any ambiguities and ensure consumer safety related to the sale of hemp and low-dose THC beverages in the state.

Conclusion

State alcohol beverage agencies are playing a crucial role in regulating the expansion of hemp and low-dose THC beverages. While the popularity of these products continues to grow, the bans and regulations imposed by state agencies reflect a growing concern about the safety and legality of these products. For producers trying to develop a product line, complying with each state’s packaging, labeling, and advertising requirements will be challenging. Accordingly, it is essential for businesses to stay informed about the regulations in their specific states. We are confident that, as more states introduce legislation and agencies clarify their positions, navigating the complex world of hemp and low-dose THC beverages will become more straightforward for the industry and members alike.