The Regulatory Chaos Surrounding Cannabis Drinks Retail

The Regulatory Chaos Surrounding Cannabis Drinks Retail

The cannabis drinks market is experiencing significant turmoil due to a lack of federal guidance on the sale and consumption of hemp-derived THC-infused beverages. As a result, states across the U.S. are scrambling to create their own regulations, leading to a confusing patchwork that retailers and distributors must navigate.

Art Nergaryan, who owns specialty wine and cheese shops in Massachusetts, initially found great success after introducing hemp-derived THC-infused beverages. He reported a remarkable business increase, with sales jumping by 25 to 35 percent. Customers began purchasing these drinks alongside their typical items, boosting overall store traffic.

However, this success was short-lived. In May 2024, Massachusetts regulators issued new guidance that prohibited the sale of cannabis-infused beverages in wine and liquor stores. Nergaryan noted a significant drop in sales following the announcement, as distributors informed him they could no longer sell the products. His once-thriving business faced challenges due to this sudden regulatory change, reflecting a broader issue faced by many retailers, distributors, and manufacturers in the cannabis beverage sector.

The sales of THC-infused beverages had surged dramatically, climbing from $102 million in 2023 to $382 million in 2024, according to research from Brightfield Group. This growth was partly attributed to states like Minnesota, which established a “quasi-legal” market for hemp beverages in 2022 and provided more regulatory clarity in 2023. Despite this growth, many in the industry are now anxiously seeking clearer regulations to navigate the complexities of selling hemp-derived THC-infused beverages.

The confusion stems from the legal definition of hemp, which was clarified by the 2018 Farm Bill. This legislation removed “hemp” from the definition of marijuana under the Controlled Substances Act, legalizing it at the federal level and designating it as an agricultural crop. According to federal law, hemp is defined as a variety of Cannabis sativa that contains less than 0.3 percent delta-9 THC by dry weight. This legal distinction has led to a surge in interest and demand for hemp-derived products, but it has also created uncertainty about the legality of various cannabis beverages.

As the industry continues to grow, stakeholders are left grappling with the ramifications of shifting regulations and the urgent need for a cohesive framework governing the sale of THC-infused drinks.

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