Frequently Asked Questions About Hemp Beverages: How Federal and State Laws Are Reshaping the THC Drink Market
By Charles Alovisetti, Juliana Todeschi, Daniel Molina
Apr 29, 2025
Introduction: What Are Hemp Beverages and Why Are They Gaining Popularity?
What Are Hemp-Derived Beverages?
There is no universal definition, but generally, a hemp beverage is any drink, typically a seltzer, soda, or mocktail, containing hemp-derived cannabinoids or terpenes. Common cannabinoids in these beverages include CBD and THC, and other minor cannabinoids such as CBN and CBG. Some hemp beverage companies also offer versions of their drinks that do not contain cannabinoids, instead incorporating adaptogens, functional ingredients like lion's mane mushrooms, or similar ingredients.
Why Are Hemp Beverages Gaining Popularity?
Hemp beverages have expanded beyond the traditional dispensary and smoke shop sales channels and are now part of the mainstream retail market. The New York Times and other national outlets have spotlighted hemp beverages in recent coverage. Liquor stores like Total Wine prominently display them, and grocery chains are placing them alongside beer, wine, and spirits.
So, how did this occur?
In short, it is a confluence of a unique federal and state regulatory opportunity alongside social trends around health and wellness. There are other factors in play, but fundamentally, the hemp beverage trend is a result of these three features:
Federal Opportunity
The hemp beverage industry owes its existence to a major shift in federal policy: the Agriculture Improvement Act of 2018 (the "2018 Farm Bill"). This legislation removed hemp from the Controlled Substances Act (CSA) and reclassified it as an agricultural commodity under the oversight of the U.S. Department of Agriculture (USDA). The 2018 Farm Bill defined hemp as the plant Cannabis sativa L. and any part of that plant, including derivatives, extracts, and cannabinoids, with a delta-9 tetrahydrocannabinol (delta-9 THC) concentration of not more than 0.3% on a dry weight basis. For reasons that are discussed in detail below, this created the ability to sell intoxicating products that would qualify as federally legal hemp.
While the 2018 Farm Bill facilitated the growth of the hemp beverage market, the law primarily addressed hemp cultivation, not sales. Regulation of consumer products containing hemp-derived ingredients, such as beverages, was not discussed directly in the law and remains complex and varied across federal and state jurisdictions.
State Law Changes
While federal law changes opened the door for hemp-based products, state-level regulations—particularly Minnesota's innovative approach to the space in July 2022—launched the hemp beverage industry. Minnesota explicitly legalized hemp-derived THC products, including beverages containing up to 5 mg of THC per serving and 50 mg per package. This created a clear and unique legal pathway for federally compliant hemp products to enter the state market in ways distinct from traditional marijuana legalization.
Minnesota's regulatory framework also provided clear labeling standards, mandated quality testing, and restricted marketing. Most notably, the law allowed hemp beverages to be sold in general retail settings rather than exclusively in cannabis dispensaries, significantly reducing legal ambiguity for manufacturers. Following Minnesota's clear regulatory guidance, craft beverage producers, breweries, and startups quickly capitalized on the market opportunity. They developed hemp-infused seltzers, sodas, teas, mocktails, and other beverages to meet consumer demand for wellness-oriented alternatives to alcohol. This model has facilitated the development of a $180 million industry in Minnesota, with over 26 million cans sold annually.
Facing market saturation in traditional beverage sectors, many companies viewed hemp beverages as a lucrative opportunity for growth. The rapid success in Minnesota has inspired other states to adopt similar regulatory frameworks, further expanding the market for hemp-derived THC beverages state-by-state over the previous two to three years.
Social Changes
While hemp beverages have become a legal possibility, the U.S. alcohol industry is at a unique social crossroads. Americans are drinking less alcohol than they have in the past, while younger customers are drinking even less compared to older generations. In response to growing consumer interest in wellness and alcohol alternatives, the alcohol industry has actively marketed hemp beverages through its well-established distribution channels.
How Federal Law Shapes the Hemp Beverage Industry
What Impact Did the 2018 Farm Bill Have on Hemp Beverages?
The 2018 Farm Bill effectively permits the creation of intoxicating hemp products under federal law. While the bill explicitly preserved the U.S. Food and Drug Administration (FDA) authority to regulate hemp-derived products, the agency has primarily refrained from exercising this power. The FDA has stated that adding CBD or THC to food and beverages is unlawful, but has acknowledged that existing regulatory frameworks for foods and supplements are ill-suited for CBD. Without clear restrictions, the marketplace rapidly expanded with products based on a straightforward reading of the 2018 Farm Bill.
Producers rely on two primary pathways under the 2018 Farm Bill to create hemp-derived intoxicating products: one based on concentration limits, and the other leveraging the bill's silence on cannabinoids other than delta-9 THC.
The first pathway allows producers to create beverages with enough THC to produce noticeable effects while staying within legal limits. Consider the math: a 12 ounce soda containing 5 mg of THC, assuming a 10% dry weight, has a dry content of 35.49 grams, meaning its THC concentration on a dry-weight basis is approximately 0.0141%—well below the 0.3% threshold. Notably, 5 mg of THC is enough to intoxicate many infrequent users.
The second pathway hinges on the fact that the law only limits delta-9 THC, capping it at 0.3% on a dry-weight basis, while remaining silent on other psychoactive cannabinoids such as delta-8 THC, delta-10 THC and THCA. By extracting or converting these alternative THC variants from hemp, manufacturers have been able to produce intoxicating beverages while technically complying with federal law. This interpretation, combined with the ability to formulate intoxicating amounts of delta-9 THC without exceeding legal limits, has fueled the proliferation of hemp-derived THC products outside of the regulated cannabis market. As a result, these products are now widely available through convenience stores, liquor retailers, and online marketplaces. However, due to increasing state-level restrictions, many hemp beverage companies have ceased using delta-8 THC and now rely exclusively on hemp-derived delta-9 THC in their products.
What is the Role of the FDA and DEA in Hemp Beverage Regulation?
Despite its removal from the CSA, hemp remains subject to the Federal Food, Drug, and Cosmetic Act (FDCA), which the FDA enforces. The FDA's limited enforcement efforts, in collaboration with the Federal Trade Commission (FTC), have largely been restricted to issuing warning letters, particularly in instances involving health or medical claims and the marketing of products intended to appeal to children.
The Drug Enforcement Administration (DEA), however, views intoxicating hemp as a challenge to current regulations and has raised concerns regarding synthetically derived cannabinoids. According to the DEA, synthetic forms of THC remain Schedule I controlled substances under the CSA. The agency has stated that creating a THC isomer through a chemical reaction starting from CBD renders it synthetic and, therefore, not exempt under the 2018 Farm Bill.
The DEA has consistently pushed back against the hemp industry's claims that THC variants like delta-8 THC are legal under federal law. While the DEA has emphasized that the source of a product (chemical synthesis versus plant extraction) determines whether it is synthetic, its enforcement of these views has been inconsistent. The agency has also issued letters identifying various cannabinoids, including delta-8 THC, delta-9 THC-O, delta-8 THC-O, HHC, THC-hexyl, and H4-CBD, as controlled substances.
Despite the DEA's stance, its interpretations are not binding law or formal regulation. Federal courts have sometimes disagreed with the agency, as seen in decisions by the Fourth and Ninth Circuit Courts, which concluded that hemp-derived cannabinoids like THC-O and delta-8 THC, respectively, are not controlled substances under the 2018 Farm Bill, provided they originate from hemp containing no more than 0.3% delta-9 THC on a dry-weight basis. While the DEA has not consistently enforced its position on converted hemp-derived delta-9 THC, enforcement actions such as product seizures and warnings indicate that the government views many of these products as exceeding legal THC limits.
What are the TTB Policies on Hemp-Infused Alcoholic Beverages?
The Alcohol and Tobacco Tax and Trade Bureau's (TTB) predecessor agency was the Bureau of Alcohol, Tobacco, and Firearms (ATF). The ATF actually published statements in the year 2000 regarding policies toward combining hemp and alcohol. On April 3, 2000, the ATF implemented strict procedures for alcoholic beverages containing hemp or hemp components. These regulations required lab analysis of hemp ingredients, including THC levels and testing methods, ensuring no controlled substances were present. Imported hemp products must include a list of ingredients and manufacturing methods and undergo testing before approval. Labeling restrictions prohibit the use of the word "hemp" unless explicitly stated in an approved composition statement, and labels cannot imply psychoactive effects or reference-controlled substances.
On April 26, 2019, the TTB issued an industry circular deferring to the FDA in determining whether hemp ingredients like CBD could be used in food or alcohol. The FDA recently reaffirmed that federal law does not permit the use of CBD in food or dietary supplements.In addition to consulting with the FDA to determine the permissibility of hemp ingredients in alcoholic beverages, TTB has stated that "TTB will consult with the DEA where appropriate and defers to the DEA in its interpretation of the CSA." Recent rulings from multiple Courts of Appeals have found the DEA's position on several cannabinoids inconsistent with the plain language of the 2018 Farm Bill, highlighting why this approach warrants skepticism. None of TTB's statements have been made pursuant to an adjudication or a formal (or informal) rulemaking process. Arguably, TTB's statements are merely policy statements or interpretive rules, both of which lack enforcement authority. It does not appear that TTB has instituted proceedings against a single hemp beverage manufacturer or distributor for acting contrary to TTB's stated position.
In short, the legal status of intoxicating hemp products remains highly contested. With no federal consensus, individual states have implemented a patchwork of licensing requirements, potency limits, and tax structures, making compliance a moving target for businesses.
State Laws on Hemp Beverages
Which States Allow Hemp-Derived THC Beverages?
As of February 14, 2025, the regulatory landscape for hemp-derived THC beverages varies widely across the United States. Twenty-four states explicitly permit the sale of hemp-derived delta-9 THC beverages. Five states have no specific laws regulating their retail sales. Ten states impose strict THC content limits, and 11 states have outright prohibited their sale.
Some states have imposed strict potency caps while still allowing the sale of hemp beverages. Despite these positions, some states have recognized the economic potential of hemp beverages and established regulated markets to support industry growth.
It all started in Minnesota. It was one of the first states to develop a structured regulatory framework for hemp beverages, implementing age restrictions, THC potency limits, and precise labeling requirements. Similarly, Kentucky and Tennessee allow intoxicating hemp beverages if companies adhere to state-mandated testing, labeling, and retail compliance requirements.
While Texas may significantly alter the current status quo for hemp beverage sales in the state this year, it has historically been the state with the highest levels of consumption of hemp products, with multi-billion-dollar sales in recent years. Alcohol distributors and retailers have been happy to generate revenue from hemp beverages, as evidenced by the state's largest liquor chain, Spec's, decision to sell the products and to display them on prime shelf real estate in their stores. In total, the state has over 7,000 registered, licensed sales locations, but enforcement actions against non-compliant businesses are few and far between due to the low cost of licenses and the corresponding lack of funds to conduct enforcement actions. This is representative of many Texans' laissez-faire approach to the proliferation of intoxicating hemp products. The future of this market is uncertain as of the date of publication. As discussed below, there are separate bills in the legislature that would dramatically change the legal status of hemp in Texas.
Which States Ban or Restrict Hemp Beverages?
Other states have taken a more prohibitive stance, often citing consumer safety concerns, the lack of federal oversight, and lobbying pressure from the traditional marijuana industry. The marijuana sector views hemp beverages as an unregulated competitor that bypasses the stricter licensing system imposed on marijuana businesses.
New York and Connecticut, for example, have effectively eliminated many hemp beverage products from the market by imposing a strict 1 mg THC limit per serving, rendering most current formulations nonviable. California has gone even further by banning intoxicating hemp products outright, citing concerns over misleading marketing practices, child safety risks, and the absence of adequate product testing regulations. Idaho and Alaska have taken similarly stringent approaches, prohibiting all THC-containing hemp products, including those that comply with federal definitions of hemp under the 2018 Farm Bill.
Some local jurisdictions have taken independent action by enacting ordinances that prohibit or restrict the sale of hemp beverages even in states where they are otherwise legal. For businesses operating in multiple states, navigating this patchwork of local regulations is critical to ensuring compliance and avoiding legal risks.
State attorneys general, public safety advocates, and cannabis industry stakeholders are pushing for stricter regulations. They argue that intoxicating hemp beverages operate in a regulatory gray area that undermines consumer protections and state-level cannabis tax revenues. As legislative debates continue, many states may follow the lead of jurisdictions that have imposed limits or bans, making regulatory compliance an ongoing challenge for the industry.
What Upcoming State Legislation Can We Expect on Hemp Beverage Sales?
There are currently two competing bills addressing intoxicating hemp products: Senate Bill 3, filed by Senator Perry (a vocal opponent of these products), and House Bill 28, which bans hemp except for hemp beverages sold by liquor retailers. SB 3 has already passed the state Senate with strong support but faces a less certain path in the House.
Texas presents a more uncertain regulatory environment. While the state permits hemp beverages and has seen widespread distribution through major wholesalers such as Silver Eagle Houston, legislative efforts to ban these products are gaining traction. The outcome of the 2025 legislative session will determine whether Texas continues to be a key market for hemp-derived THC beverages or moves toward more restrictive regulations. As the nation's largest market for hemp-derived products by some measure, all eyes are on Texas now.
In addition to Texas, 2025 has been a busy year for other state legislatures. The details of the various bills that will impact hemp beverages are beyond the scope of this article. Across the country, lawmakers have introduced bills that could shape the future of intoxicating hemp, with each proposal carrying the potential to reshape its state's market. Several states have proposed total bans on hemp products, others have proposed banning only synthetic cannabinoids, and others have specifically carved out exceptions for hemp beverages while severely restricting other forms of hemp products.
State legislatures have become key battlegrounds this session, with alcohol lobbyists pushing bills to legitimize hemp beverages while conservative groups, including law enforcement associations, back measures to ban or severely restrict hemp products. Many proposals fall between these two extremes.
How is the Alcohol Industry Influencing Hemp Beverage Policy?
In many states, liquor regulators have ignored alcohol-free hemp beverages—an approach consistent with TTB's guidance. Meanwhile, other states' liquor regulators have expressly allowed hemp beverages to be sold through traditional alcohol sales channels.
The alcohol industry is hitching its horse to the hemp beverage wagon. With the number of regular alcohol consumers falling, the industry is eager to see revenues from hemp beverages added to its bottom line. In response, trade organizations for some portions of the alcohol industry have hit the public policy trail. The American Beverage Licensees released a policy memo urging that intoxicating THC products be limited to businesses licensed to sell beverage alcohol. Meanwhile, the Wine and Spirits Wholesalers of America (WSWA) met with Members of Congress to advocate for federal hemp regulation.
What Opportunities and Challenges Does the Patchwork of Hemp Beverage Laws Pose for Businesses?
When the 2018 Farm Bill legalized hemp and its derivatives at the federal level, its language noted that the legislation did not preempt or limit any state law regulating hemp production. However, the 2018 Farm Bill does prohibit states from stopping the transportation of federally legal hemp across state lines. This ambiguity, alongside dormant commerce clause arguments, has fueled ongoing litigation and regulatory uncertainty.
Courts across the country are assessing state efforts to regulate the sale of intoxicating hemp products. In some states, legal challenges have secured preliminary injunctions that temporarily block the enforcement of new restrictions. In other cases, courts have allowed these regulations to remain in effect during ongoing litigation.
For instance, the Fourth Circuit Court of Appeals in Virginia upheld a state law restricting the sale of hemp products with high THC levels, reinforcing the state's right to regulate intoxicating substances for public health reasons. Meanwhile, a Maryland Circuit Court judge granted a preliminary injunction against a state ban on intoxicating hemp products, allowing sales to continue while the case moves through the courts. This ruling is in contrast to California, where industry stakeholders challenged new regulations prohibiting hemp products containing detectable levels of intoxicating cannabinoids, seeking a temporary restraining order to halt enforcement, though no preliminary injunction was issued. These cases underscore the ongoing conflict between state governments, the hemp industry, and the judiciary as lawmakers attempt to regulate an industry evolving faster than existing legislation.
As these legal battles unfold, the regulatory landscape remains fragmented. Some states have welcomed hemp-derived THC beverages, while others have imposed strict regulations or outright bans, creating a patchwork of policies that complicate business operations. However, this uncertainty may be short-lived. Many advocates are pushing for the next version of the Farm Bill to explicitly grant states the authority to impose restrictive regulations, potentially resolving the current ambiguity and reshaping the industry's legal framework.
How Can Hemp Beverage Companies Navigate Changing State Regulations?
With little federal enforcement beyond occasional actions related to misleading medical claims or child-appealing packaging, most hemp beverage regulation falls to state authorities. As a result, businesses in this industry must navigate a complex and rapidly evolving legal landscape.
Compliance requirements vary widely, with states imposing different THC milligram limits, testing, labeling, packaging, licensing, and distribution restrictions. Companies operating in multiple states must stay vigilant and continuously adapt to shifting regulations to avoid enforcement actions, fines or product seizures. The complex patchwork of state hemp and cannabinoid laws and regulations is constantly evolving, and tracking new developments can be confusing and time-consuming for even the most sophisticated industry participant. With that said, the consequences of non-compliance can be costly. Vicente LLP attorneys have created and maintained our State-by-State Hemp and Cannabinoid Compliance Guide for this very reason. We continuously search, monitor, and analyze hemp laws and regulations to ensure these materials stay up-to-date even during the most tumultuous legislative sessions.
The next few years will be critical in determining whether the hemp beverage industry can establish a stable regulatory framework or if mounting legal and legislative pressures will force significant market contractions. Businesses must stay proactive in ensuring compliance, push for balanced regulation, and remain ready to adapt as new laws take effect.
How and Where Hemp Beverages Are Sold
What is the Role of Alcohol Distributors in Hemp Beverage Market Growth?
A key driver of the expansion of hemp beverages is their adoption by alcohol distributors. As beer and liquor wholesalers face declining alcohol sales, many have embraced hemp-derived THC beverages as an emerging revenue stream. These distributors, with well-established relationships with retail and hospitality businesses, have played a crucial role in normalizing and expanding the presence of hemp beverages in the market.
For instance, Silver Eagle Houston, one of Texas's largest alcohol distributors, has partnered with Bayou City Hemp Co. to place hemp beverages in over 1,000 retail locations. Similarly, Sarene Craft Beer Distributors, a Connecticut-based wholesaler, has reported strong sales growth in hemp-derived THC beverages, offsetting declining beer sales. These strategic shifts demonstrate how alcohol distributors capitalize on the legal and commercial advantages of hemp beverages, further integrating them into mainstream retail outlets.
Where Can Consumers Buy Hemp Beverages?
Hemp beverages fall under federal hemp laws rather than state cannabis regulations, allowing them to be sold through mainstream retail outlets that typically carry alcohol. As a result, their legal status has allowed them to gain traction across multiple distribution channels:
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Liquor Stores and Alcohol Retailers – Large chains such as Spec's Wine, Spirits & Finer Foods, the second-largest liquor retailer in the U.S., prominently stock hemp-derived THC beverages next to beer and wine.
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Bars and Restaurants – Establishments like Moe's Original BBQ in Alabama and Sevy's Grill in Texas now serve THC-infused cocktails, appealing to consumers interested in alternatives to alcohol, particularly within the growing "sober-curious" movement.
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Convenience and Grocery Stores – In select states, including Minnesota, Kentucky, and Tennessee, hemp beverages have entered grocery chains and convenience stores, increasing accessibility for consumers.
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E-Commerce and Direct-to-Consumer Sales – Unlike marijuana products, hemp-derived THC beverages can be legally shipped across state lines, allowing online retailers to offer nationwide delivery.
Why May Hemp Beverages Have a Competitive Advantage Over Cannabis Drinks?
While both hemp-derived THC beverages and cannabis beverages offer an alternative to alcohol, the regulatory landscape has given hemp beverages a significant competitive edge. Cannabis drinks, which are sold exclusively in licensed dispensaries, face substantial restrictions: prohibitions on interstate commerce, heavy taxation due to marijuana's Schedule I classification, the requirement to store bulky drinks in vaults (in some states), and banking limitations that make it difficult for businesses to process credit card transactions. These barriers have constrained the growth of the cannabis beverage market and limited its accessibility to consumers.
Hemp beverages, on the other hand, benefit from fewer regulatory restrictions. They can be sold through mainstream retail and hospitality channels, marketed alongside conventional functional drinks, and shipped directly to consumers across state lines. This regulatory flexibility has allowed hemp-derived THC beverages to reach a broader audience, positioning them as a more scalable and commercially viable alternative to cannabis drinks.
The Future of Hemp Beverages
What's Next for Hemp Beverage Sales in the U.S.?
Hemp beverages, much like hard seltzers and non-alcoholic beer, are on track to become a staple in the U.S. beverage market. Consumer demand continues to rise, with online searches for THC-infused drinks reaching record highs in 2024, signaling a mainstream shift. In response, alcohol distributors are increasingly incorporating hemp beverages into their portfolios, leading to greater availability in liquor stores, bars and supermarkets. However, the regulatory landscape remains uncertain. The 2025 Farm Bill could reshape the legal framework for hemp beverages, influencing their future in mainstream retail.
The intersection of alcohol and cannabis is evolving rapidly, with hemp beverages emerging as a key player in this transformation. Whether this momentum continues or faces significant legal roadblocks will depend on the direction of federal and state regulations.
How Could the 2025 Farm Bill Reshape the Hemp Beverage Industry?
The definition of hemp established by the 2018 Farm Bill is now codified in federal law and does not require reauthorization to remain in effect. Even without a new Farm Bill, the hemp beverage industry can continue operating under the existing legal framework.
New legislative developments at both the federal and state levels will shape the future of the hemp beverage industry. Although the 2018 Farm Bill was originally set to expire after five years, it remains in effect through September 30, 2025, due to a one-year extension included in the Full-Year Continuing Appropriations and Extensions Act, 2025 (H.R. 1968) (commonly referred to as a continuing resolution) which was signed into law on March 15, 2025. This follows an earlier short-term extension enacted through a prior continuing resolution. While the current continuing resolution preserves the existing regulatory framework, the long-term future of the hemp beverage industry may depend on the final language of the next Farm Bill.
Federally, the 2025 Farm Bill, if passed this year, could prove decisive by either closing or cementing the regulatory loopholes that have allowed intoxicating hemp products to flourish. However, it's worth noting that hemp is far from the primary focus of this sweeping legislation, which also addresses food assistance and broader agricultural policy.
Two competing drafts propose vastly different regulatory frameworks, each with significant implications for the industry:
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The House version of the draft 2024 Farm Bill, with an amendment introduced by Representative Mary Miller, seeks to ban hemp-derived THC entirely. It does so by redefining hemp to include only "naturally occurring, naturally derived, and non-intoxicating cannabinoids." If enacted, the amendment would effectively wipe out the market for intoxicating hemp-derived beverages and other THC-infused products by reclassifying them as marijuana, subjecting them to far stricter regulation.
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The Senate draft of the 2024 Farm Bill, introduced by Senator Debbie Stabenow, took a more moderate stance. This version redefines hemp to include a total THC cap of 0.3%, encompassing all psychoactive THC variants. While this approach would still eliminate the proliferation of alternative THC products such as delta-8 and delta-10 THC, it does not impose an outright ban. Instead, it allows states to regulate hemp within federal guidelines, granting them more authority to determine the legality of intoxicating hemp beverages within their jurisdictions. Sen. Stabenow retired at the end of 2024, so the Senate draft going forward will be handled by new committee leadership, likely Sen. Boozman or Sen. Welch.
Regardless of which version passes, both proposals pose significant challenges for the intoxicating hemp industry. The most consequential change is the redefinition of hemp to account for "total THC," which includes all psychoactive variants such as delta-8, delta-10, and THCA. By maintaining the 0.3% THC threshold while expanding its scope to all cannabinoids, the bill would effectively eliminate many of the intoxicating hemp products currently available on the market. This shift could force hemp beverage companies to reformulate their products or significantly limit their distribution.
What are the Three Main Possible Scenarios for the Future of the Hemp Beverage Market?
The final version of the 2025 Farm Bill will pivotally shape the regulatory landscape for hemp beverages. As of the date of publication, drafts of the 2025 Farm Bill have not yet been formally introduced in Congress, and the scenarios below assume that similar versions of the 2024 Farm Bill will be introduced this year. Although the exact language is still unknown, if a new version of either draft is enacted, one of two significant outcomes is likely, though a third scenario could emerge if the bill fails to pass.
Scenario 1: Complete Ban on Hemp THC Beverages (Unlikely)
If enacted, a new version of the Miller Amendment would reclassify hemp-derived THC drinks as marijuana, severely restricting their availability and subjecting them to stricter regulations. Sales would be limited to dispensaries, eliminating the existing hemp beverage retail market. However, the likelihood of this amendment passing as drafted is low for two reasons. First, the hemp industry has grown into a multibillion-dollar market with strong lobbying efforts from both cannabis advocates and alcohol distributors, many of whom now include hemp beverages in their product portfolios. Second, reclassifying hemp-derived THC as a marijuana product would trigger a massive regulatory overhaul at both the federal and state levels, creating significant legal and logistical challenges and disrupting businesses that have operated under the framework established by the 2018 Farm Bill.
Scenario 2: State-Level Control with THC Limits
If adopted in its current form, a 2025 version of the Senate draft would allow the hemp beverage industry to continue operating but under tighter regulations. States would gain apparent authority to regulate or ban hemp beverages, further fragmenting the legal landscape. While some states may continue to allow sales, others will likely impose strict limits or outright bans. The bill would also prohibit psychoactive cannabinoids other than delta-9 THC, curbing the spread of unregulated variants while preserving a controlled market for compliant products.
Scenario 3: No Changes, Status Quo Continues
If no new Farm Bill is passed in 2025, the 2018 version will likely be extended for another year, as has been the case for the previous two years. In this scenario, the current regulatory framework would remain in place, allowing the hemp beverage industry to continue operating under the existing rules.
Either of the first two scenarios would have significant implications for businesses, regulators, and consumers, making the 2025 Farm Bill a pivotal moment for the future of the hemp beverage market.
What are the Key State-Level Hemp Beverage Regulations to Watch?
Beyond federal legislation, state-level decisions will be crucial in shaping the hemp beverage industry. The final text of the 2025 Farm Bill could determine whether states have explicit authority to regulate hemp beverages. Irrespective of that legislation, some states are already considering legislation permitting or restricting sales, leading to increased uncertainty for businesses operating in multiple jurisdictions. States will likely pass more hemp-specific legislation if the 2025 Farm Bill explicitly grants regulatory authority.
Expanded state control is likely to fragment the hemp beverage market further. In permissive states, the industry may continue to thrive under strict labeling, testing and potency regulations. In contrast, businesses operating in more restrictive states may need to pivot their strategies or relocate to more favorable jurisdictions. Ultimately, the industry's trajectory will depend on the evolving interaction between federal law, state legislation, and ongoing litigation.
How Are Hemp Beverage Companies Preparing for Changes in State Regulations?
In anticipation of regulatory shifts, businesses in the hemp beverage industry are implementing strategies to protect their operations. Many companies actively lobby for balanced regulations, allowing continued sales while ensuring consumer safety. The Hemp Beverage Alliance, along with significant alcohol distributors, is advocating for a structured federal framework that preserves market access without imposing an outright ban.
To mitigate risks, companies expand into states with favorable regulatory environments where hemp beverages are permitted, such as Minnesota, Kentucky, and Tennessee. Some producers are developing reformulated products with lower THC concentrations to align with potential new federal and state limits, ensuring continued viability under evolving regulations. One example of this is the "Lo Boy" hemp beverages already being sold by Cann in Colorado; the Lo Boy beverages comply with Colorado's strict regulations on hemp products, making them a good candidate for import into other similarly restrictive jurisdictions.
Conclusion: The Hemp Beverage Market is at a Crossroads
The hemp beverage industry is at a critical juncture, with its future hinged on the outcome of the 2025 Farm Bill and evolving state-level regulations. While consumer demand and industry support continue to grow, the new Farm Bill could either solidify hemp beverages as a mainstream product or significantly restrict their availability. Whether through federal oversight, state control, or industry adaptation, the coming year will be a defining moment for hemp beverages in the United States.
As lawmakers debate the industry's fate, businesses and consumers should stay vigilant, as new policies will dramatically impact the future of hemp beverages in the United States
Questions About Entering or Navigating the Hemp Beverage Industry?
Whether you're a distributor interested in entering this new market, a retailer looking to expand your intoxicating hemp beverage lineup across multiple states, or a manufacturer in need of a new compliance strategy, Vicente LLP is ready to support you.
Our team has helped shape cannabis and hemp policy nationwide and offers tailored legal and regulatory guidance to navigate today's fragmented market. With deep knowledge of both state-level policy shifts and federal legislative developments, we'll help you stay compliant.
Contact us today to schedule a consultation and learn how we can support your growth in the evolving hemp beverage industry.
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