Comparative Analysis: Three States’ Tackle the Hemp Beverage Question, & the Results Diverge Dramatically
The increasingly popular hemp-infused beverage industry has found itself at the forefront of a wave of legislative changes and challenges across the United States. A patchwork of regulation has set the stage for an open economic laboratory.
In this piece, we’ll examine the latest developments in Louisiana, Iowa, and Minnesota, focusing on how these new laws impact hemp beverage product offerings for local businesses and comparing their economic impacts. We’ll highlight the challenges faced by companies in Iowa and Louisiana and celebrate the forward-thinking regulations in Minnesota.
Louisiana
Good Ole Boys & Grandfathers
In Louisiana, new legislation has significantly tightened the reins on the sale and distribution of hemp-infused beverages. The recently passed House Bill 952 introduces several restrictions aimed at curbing the growth of the hemp beverage industry.
The move gatekeeps the permit process for hemp drink sales in bars and restaurants seems to be a protectionist maneuver by the alcohol industry, which views the rising demand for hemp beverages as a threat to their bottom line. However, this isn’t just about business competition; it’s a fight for the survival of over 2,000 hemp-related businesses in the state. Joe Gerrity, CEO of Crescent Canna, expresses mixed feelings, considering the legislation a partial win but lamenting the additional hurdles it imposes on the industry.
Louisiana: A Stifled Market
Banning Sales in Gas Stations
Hemp beverages can no longer be sold in gas stations, significantly reducing their accessibility to consumers.
Restricting New Establishments
New restaurants and bars are barred from selling these beverages unless they have been grandfathered in with a permit obtained by June 17.
Portion Size Reductions
The allowable THC content has been reduced from 8 milligrams per serving to 5 milligrams, with a maximum of 40 milligrams per package.
Sales Limits
Drinks are now considered a single serving, and only four bottles or cans can be sold together.
Iowa
Legal Battles & Uncertainty
Iowa’s hemp beverage companies are facing their own set of challenges, having recently filed a lawsuit against the state over new restrictive laws. The crux of their argument is that the new regulations, derived from House Files 2605 and 2641, are overly vague and conflict with federal law.
Field Day Brewing Co. and other plaintiffs argue that the state’s own Department of Health and Human Services (DHHS) has historically approved beverages with varying serving sizes, adding to the confusion. As the lawsuit unfolds, the hemp beverage industry in Iowa have had to adapt their product offerings to maintain compliance while they fight for fairer regulations.
Iowa: Troubled Waters
THC Limits and Serving Sizes
The new law limits THC in consumable hemp products to 4 milligrams per serving, but fails to clearly define what constitutes a serving.
Inventory Seizures
Local beverage companies reported that under the new guidelines, 80% of their current inventory is non-compliant. Businesses had until July 17th to sell their remaining inventory, otherwise it would be seized and destroyed.
Federal Precedent
The companies argue that the state law is preempted by federal regulations that already dictate serving sizes and THC content standards.
Minnesota
A Model for Progressive Regulation
In stark contrast, Minnesota has adopted a more progressive approach, fostering a thriving hemp beverage market. The state’s new law, effective July 1, allows breweries to sell hemp-derived THC-infused drinks on tap, provided they display the necessary information otherwise required on a label.
Dan Schnabel, taproom manager at Headflyer Brewing, notes the positive impact on business, with growing interest from both local and national retailers. As Minnesota gears up for legal marijuana sales, the state’s robust hemp program positions it well for a future of continued growth and innovation in the cannabis industry.
Minnesota: Ideal Conditions?
Reasonable Dosage Caps
Local beverage companies reported that under the new guidelines, 80% of their current inventory is non-compliant. Businesses had until July 17th to sell their remaining inventory, otherwise it would be seized and destroyed.
Economic Boom
The state has seen significant economic benefits, with over $11.5 million in revenue from hemp products in just 11 months. This success is attributed to the fair and well-regulated market that encourages innovation and growth.
Consumer Accessibility
Allowing these beverages to be sold on tap in breweries makes them more approachable and integrates them seamlessly into the existing beverage market.
Call to Action: Stay Engaged!
The legislative landscape for hemp-infused beverages is rapidly evolving, with states like Louisiana and Iowa imposing stricter regulations that challenge the industry, while Minnesota serves as a glorious example of balanced and beneficial regulation. For hemp business owners, staying informed and adaptable is key. As we continue to advocate for fair and supportive laws, the successes and setbacks in different states provide valuable lessons and opportunities for the future.
