What You Need to Know About the Federal Ban Threatening the Market for THC-Infused Drinks and Snacks
MINNEAPOLIS — In recent years, THC-infused beverages and snacks have become a burgeoning market, especially in the wake of declining alcohol sales. At Indeed Brewing in Minneapolis, production lines that once produced beer now fill cans with THC-infused seltzer, a product that has proven popular with cannabis enthusiasts. But this boom may soon be stifled by a new federal ban on intoxicating products derived from hemp.
A provision tucked inside the bill that ended the U.S. federal government shutdown this month targets THC-infused beverages, gummies, and snacks. This could bring a halt to the rapid growth of the hemp industry, which has ballooned to $24 billion in recent years. Industry leaders, including craft brewers like Indeed, are now scrambling to understand the implications of this provision and how to protect the sector before the ban takes effect in November 2026.
“It’s a big deal,” said Ryan Bandy, Chief Business Officer at Indeed Brewing. “It would be a mess for our breweries, for our industry, and obviously for a lot of people who like these things.”
A History of Loopholes and Rapid Growth
The controversy surrounding hemp-derived THC products began with the 2018 farm bill, which legalized the cultivation of hemp with less than 0.3% of delta-9 THC. This legislation, which had the support of Kentucky’s Republican Senator Mitch McConnell, was intended to help farmers grow industrial hemp for non-psychoactive uses such as textiles, food, and wellness products. However, the law also inadvertently opened a loophole that allowed businesses to exploit the definition of hemp by producing intoxicating products.
Under the 2018 law, hemp could contain small amounts of THC, but not enough to impair users. However, this threshold was easily bypassed by extracting non-impairing compounds like CBD and chemically transforming them into psychoactive forms of THC, such as delta-8 and delta-10.
As a result, THC-infused products — including vape oils, candies, chips, cookies, sodas, and more — began popping up in convenience stores, gas stations, and even in states where marijuana remains illegal. These products were often unregulated and untested, and some critics voiced concern over their accessibility, particularly to younger consumers. In states where recreational marijuana was legal, hemp-derived products undercut heavily taxed cannabis products, creating further confusion and competition in the market.
States like Indiana reported increases in calls to poison control centers, particularly due to cases of pediatric exposure to THC.
State Regulations: A Patchwork of Responses
To address these concerns, several states have taken action to regulate or ban impairing hemp products. In October, California Governor Gavin Newsom signed a bill prohibiting the sale of intoxicating hemp products outside the state’s legal marijuana market. Texas, with its substantial hemp market, is considering regulations that would restrict hemp-derived THC products to consumers over 21. Meanwhile, Nebraska has proposed criminalizing the sale and possession of these products.
Washington State, which once boasted one of the most robust hemp industries, has seen a significant decline in licensed hemp growers after banning the sale of intoxicating hemp products in 2023. The number of licensed hemp growers in Washington has plummeted from 220 in 2018 to just 42 today.
In Minnesota, THC-infused beverages and foods were legalized for adults over 21 in 2022. The state’s legal cannabis market, particularly THC beverages, has since exploded in popularity, with even retail giants like Target offering THC drinks in some of their stores. For local breweries like Indeed Brewing, THC beverages now make up a significant portion of their sales — about one-quarter of the business. At nearby Bauhaus Brew Labs, THC drinks account for roughly 26% of their revenue from distributed products.
McConnell’s Federal Ban: A Step Too Far?
None of this was what Senator Mitch McConnell had in mind when he helped craft the 2018 farm bill. After years of inaction, McConnell has moved to close the loophole by including a federal ban on intoxicating hemp products in the legislation that ended the federal government shutdown this month.
“It will keep these dangerous products out of the hands of children, while preserving the hemp industry for farmers,” McConnell said in a statement. “Industrial hemp and CBD will remain legal for industrial applications.”
The move has garnered mixed reactions. Some in the legal marijuana industry, as well as prohibitionist groups like Smart Approaches to Marijuana, have applauded the ban, arguing that hemp-derived THC products have undermined legal cannabis markets and posed risks to public health.
But for many in the hemp industry, the ban represents a potential catastrophe. Jonathan Miller, General Counsel for the U.S. Hemp Roundtable, expressed hope that Congress would take a more measured approach, implementing regulation rather than a full ban.
“We are very hopeful that cooler heads will prevail,” Miller said. “If they really thought there was a health emergency, there would be no year-long period.”
The federal ban is expected to jeopardize over 300,000 jobs and cost states $1.5 billion in lost tax revenue. For breweries like Bauhaus Brew Labs, the financial impact could be devastating. Drew Hurst, the company’s President and COO, said he doesn’t see a way for his business to survive if the federal ban goes through as currently written.
What’s Next for the Hemp Industry?
While the ban does not take effect until November 2026, many lawmakers are already pushing to regulate rather than ban the hemp THC industry. Kentucky’s Senator Rand Paul introduced an amendment to remove McConnell’s hemp provision from the government shutdown bill, but it failed by a wide margin.
In Minnesota, U.S. Senators Amy Klobuchar and Tina Smith are working to save the industry, pointing out that the provision was inserted into the shutdown bill without the necessary hearings or deliberations. Klobuchar has suggested that states be allowed to craft their own regulatory frameworks or that Minnesota’s stringent regulations could be adopted nationwide.
Kevin Hilliard, co-founder of Insight Brewing in Minneapolis, expressed urgency, noting that farmers need certainty about the future of the hemp industry before planting season arrives next spring.
“If a farmer has uncertainty, they’re not going to plant,” Hilliard said.
