What a federal ban on THC-containing drinks and snacks means for the cannabis industry

Production lines at Indeed Brewing moved quickly, and the cans were being filled not with beer, but with THC-infused soda water. The product, which contains the compound that makes cannabis users high, has been a lifeline to Indeed and other craft breweries such as Alcohol sales declined In recent years.

But this boom seems to be coming to an abrupt halt. Bury it in the bill Ended the federal government shutdown This month was a provision to ban those drinks, along with other harmful cannabis-based drinks and snacks, which have proliferated across the country in recent years. Now the $24 billion cannabis industry is seeking to save itself before that ruling goes into effect in November 2026.

“It’s a big deal," said Ryan Bandy, Chief Business Officer, Indeed. "It would be a mess for our breweries, for our industry, and obviously for a lot of people who like this stuff.

Here’s what to know about the impending ban on impaired hemp-derived products.

Congress opened the door in 2018

Marijuana and hemp are the same type. Marijuana is grown for high levels of tetrahydrocannabinol (THC) in its flowers. Low-THC hemp is grown for its powerful fiber, edibles, or health products. “The rope, not the drug” has long been the slogan of farmers who have supported cannabis legalization.

After states began legalizing marijuana for adult use more than a decade ago, cannabis advocates saw an opportunity at the federal level. As part of the 2018 Farm Bill, Congress legalized the cultivation of industrial hemp to give farmers, including Republican Sen. Mitch McConnell’s home state of Kentucky, a new cash crop.

But the way the law defines hemp — as containing less than 0.3% of a certain form of tetrahydrocannabinol (THC), called delta-9 — It opened a huge loophole. Drinks or snack bags can reach this threshold and still contain enough THC to cause people’s blood sugar to spike. Companies can exploit the law further by extracting a non-inactivated compound, called CBD, and chemically converting it into other forms of tetrahydrocannabinol (THC), such as delta 8 or delta 10.

The result? E-cigarette oil, gummy candy, potato chips, cookies, soft drinks and other unregulated and untested products loaded with hemp-derived THC. It is spread throughout the country. In many places, they were available at gas stations or convenience stores, even for teenagers. And in legal marijuana states, it undermines heavily taxed and regulated products. In other cases, they have evaded bans on recreational use of weed.

Some states, including Indiana, Mutations have been reported In calls to poison control centers for childhood exposure to tetrahydrocannabinol (THC).

A patchwork of state regulations

Dozens of states have since taken steps to regulate or ban harmful cannabis products. In October, California Democratic Governor Gavin Newsom signed a bill banning the sale of intoxicating cannabis products outside of the state’s legal marijuana system.

Texas, which has a huge cannabis market, does as well Move to organize Poor cannabis sales, such as limiting it to people over the age of 21. In Nebraska, lawmakers instead considered the matter Bill to criminalize Selling and possessing hemp-based products containing tetrahydrocannabinol (THC).

Washington state has adopted a program to regulate hemp cultivation. But the number of licensed growers has declined since the state banned intoxicating cannabis products outside of the regulated cannabis market in 2023. Five years ago, there were 220, said Tricia Ehrlich, hemp program manager for the state Department of Agriculture. This year, there were 42, and with a federal ban looming, she expects that number to drop by about half next year.

Minnesota Make infused drinks and foods legal In 2022 for people aged 21 and over. The products, which must be derived from legally approved hemp, have become so popular that Target now offers THC drinks in some of its stores in the state.

It’s also been a boon for liquor stores and for microbreweries in Minneapolis like Indeed, where THC drinks make up nearly a quarter of the business, Pandey said. At Bauhaus Brew Labs, a few blocks away, THC beverages account for 26% of its revenue from distributed products and 11% of the brewery’s taproom revenue.

A powerful senator moves to close the loophole

None of that is what McConnell intended when he helped craft the 2018 farm bill. He finally closed the loophole by inserting a federal hemp ban into the measure Ending the 43-day federal government shutdownwhich was approved by the Senate on November 10.

“It will keep these dangerous products out of the hands of children, while keeping the hemp industry safe for farmers,” McConnell said. “Industrial hemp and CBD will remain legal for industrial applications.”

Some in the legal marijuana industry celebrated, because prohibition would end what they see as unfair competition.

She was The banned people joined her. “There’s really no good argument for allowing these dangerous products to be sold in our country,” said Kevin Sabbitt, president and CEO of Smart Approaches to Marijuana.

But the ban does not apply for a year. This has given the industry hope that there is still time to pass regulations that would improve the THC industry in hemp — such as banning synthetically derived THC, requiring age restrictions on sales, and banning its marketing to children — rather than eliminating it.

"We very much hope that cooler heads will prevail," said Jonathan Miller, general counsel for industry group US Hemp Roundtable. “If they really believed there was a health emergency, there wouldn’t be a one-year period.”

The federal ban would put more than 300,000 jobs at risk while costing states $1.5 billion in lost tax moneysays the group.

Drew Hurst, president and chief operating officer of Bauhaus Brew Labs, has no doubt that his company will be among the casualties.

“If this were carried out as currently written, I see no way at all for the Bauhaus to remain in business;" Hurst said.

What comes next?

A number of lawmakers say they will push for regulation of the cannabis industry. Kentucky’s No. 2 Sen. Rand Paul, Republican, introduced an amendment to remove McConnell’s cannabis language from a crucial government funding bill, but it failed by a vote of 76 to 24.

Minnesota’s two Democratic senators, Amy Klobuchar and Tina Smith, are among those laying out strategies to save the industry. Klobuchar noted in a recent press conference that the ban was included in an unrelated shutdown bill without a hearing. She suggested that the federal government could allow states to develop their own regulatory frameworks, or that Minnesota’s strict regulations could be used as a national model.

Kevin Hilliard, co-founder of Insight Brewing in Minneapolis, said the cannabis industry needs a solution before planting time next spring.

"“If a farmer has uncertainty, he won’t farm,” Hilliard said.