While major news outlets were focused on Democratic revolts, senatorial kickbacks, and Epstein emails, one provision in the deal to reopen the government slipped by on stealth mode.
The legislation to temporarily fund the government also reinstated a virtual ban on hemp-derived THC products, including beverages.
That prohibition is now law. But if there’s a silver lining for small breweries that have invested significant time and resources into launching THC beverage brands, it’s this: The ban won’t take effect for one year from enactment.
The provision took hemp advocates by surprise this week, as lawmakers fast-tracked the bill to end the government’s longest-ever shutdown. Once the Senate approved it November 10, calls to action barely had time to appear on websites and Instagram accounts before the House passed it and the president signed it two days later. (If journalists at major news outlets were aware that the government was about to shut down a fairly popular $30 billion industry, few mentioned it in their reporting.)
The ban effectively closes a loophole inadvertently opened by the 2018 Farm Bill, which legalized products derived from low-THC hemp—psychoactive or not. It took a few years for momentum around that loophole to build, and states reacted in different ways—with many finding ways to allow and regulate hemp-derived THC products, and others moving to ban them. The industry grew rapidly to be worth an estimated $28.3 billion by 2022, and many small breweries—looking to meet customers where they are while beer-drinking declines—joined the fray. The new federal ban overrides any permissive state laws.
Technically, the language prohibits any hemp-derived products with more than 0.4 milligrams of THC per container—a non-intoxicating quantity that represents the hemp-drink equivalent of near-beer. For context, most THC beverages on the shelves of stores such as Total Wine & More contain 5 or 10 mg of THC, while several producers make beverages that include 20 to 30 mg of THC, or more.
The one-year window before the ban takes effect means that many business operators who’ve invested significant time and resources into cannabis beverages will be reaching out to lawmakers—perhaps making the case for common-sense regulation—even while preparing to discontinue those products, pare back their businesses, or close altogether.
Some alcohol industry groups, including the Beer Institute and the Distilled Spirits Council, were lobbying for a ban “until a robust federal regulatory framework is established,” they say in a letter recently sent to congressional leaders. As alcohol consumption and sales have broadly declined over the past few years, many in the industry have cited the normalization of marijuana and hemp-derived THC products as a major factor in changing behaviors.
Meanwhile, with many independent breweries getting involved in producing THC beverages, the Brewers Association stayed on the sidelines. “We didn’t take an active position,” says Bart Watson, BA president and CEO. “We didn’t lobby for the ban or for the status quo.”
However, now that the prohibition is set to take effect, Watson says, “we do think there is an opportunity to communicate our primary position, which is that if this market exists, it should have clear and consistent regulations on par with beverage alcohol.” The BA published a statement to that effect in June, referring to the status quo as “chaotic and unsustainable,” calling for “clear and transparent regulatory structures that protect the public while offering a pathway for commerce in cannabis and hemp products.” The group also published guiding principles for these products, including the need for clear regulation, responsible labeling, excise taxes on par with alcoholic beverages, and opportunities for brewers to compete in that market.
The Hemp Beverage Alliance, an industry group that launched in 2023, lists “smart regulation, consumer education, transparency in manufacturing, and consistency in labeling” as its core principles. Once the provision to close the loophole appeared in the deal to end the shutdown, the HBA’s social media posts were urging followers to contact their representatives: “Speak up today and tell your lawmakers you support responsible hemp beverage regulation—not prohibition.”
Another industry group for hemp products, the U.S. Hemp Roundtable, published an Instagram post on November 13, after the ban became law. The title says, “Hemp’s future: 365 days to regulate, not ban.” In a video, Roundtable general counsel Jonathan Miller expresses optimism about the chances for regulations that would keep the door open for hemp-derived THC products.
“We will be able to get legislation passed that will robustly regulate hemp, keep these products out of the hands of kids, use good manufacturing practices, truth in labeling, and have reasonable THC limits,” Miller says. “But we’re going to need your help.”